by Pauline Foret
(Reuters) – Wall Street is expected to fall sharply on Friday, like the European stock markets which widened their losses mid-session, investors showing concern about the possibility of a “shutdown” in the United States and the impact of today’s indicators on the monetary policy of the Federal Reserve.
Futures on New York indices signal a sharp decline on Wall Street, indicating a decline of 0.58% for the Dow Jones, 0.92% for the Standard & Poor’s-500 and 1.43% for the Nasdaq.
In Paris, the CAC 40 lost 1.07% to 7,216.23 points around 1:22 p.m. GMT. In Frankfurt, the Dax fell by 1.32% and in London, the FTSE 100 lost 0.95%.
The EuroStoxx 50 index is down 1.30%, the FTSEurofirst 300 is down 1.82% and the Stoxx 600 is down 1.75%.
The prospect of a “shutdown” in the United States worries the markets after the bipartisan financing bill was criticized by Donald Trump and rejected by parliamentarians.
An agreement must be reached before midnight on Friday, otherwise part of the American administration would close the next day.
Europe is reacting to future US President Donald Trump’s threat to impose customs duties on any country or entity with trade surpluses with the United States.
These promises to impose customs duties have somewhat cooled the Federal Reserve, which is now more cautious about its monetary policy. Markets expect fewer than two rate cuts next year.
PCE inflation figures for November will help influence the market outlook, with a higher figure than the 0.2% expected by analysts likely to ward off the prospect of further rate cuts and put pressure on assets risky and American sovereigns.
“I won’t go on vacation leaving big bets open at the moment – there is clearly a big risk of volatility in the markets,” said Eren Osman, director of wealth management at Arbuthnot Latham.
VALUES TO FOLLOW AT WALL STREET
CagriSema, Novo Nordisk’s obesity drug, disappointed the Danish group’s expectations during a trial, allowing a weight reduction of 22.7% against an estimate of 25%. The title of its American rival, Eli Lilly, gained 7.6% before the opening.
Nike on Thursday presented a pessimistic forecast for the third quarter, predicting a decline in revenue in the low double-digit percentage range. The stock lost 3.8% before the opening.
RATE
Long-term US bond yields are weakening somewhat after surpassing the 4.5% mark ahead of PCE inflation figures.
The yield on ten-year Treasuries fell 2.8 basis points to 4.5422%, and two-year Treasuries fell 4.1 basis points to 4.2784%.
The yield on the ten-year German Bund fell by 0.7 basis points to 2.2990%, the two-year by 4.1 basis points to 2.0160%.
CHANGES
The dollar fell on Friday in the face of the latest decisions by global central banks and the possibility of a “shutdown” in the United States.
The dollar lost 0.29% against a basket of reference currencies.
The euro gained 0.34% to 1.0397 dollars.
OIL
Oil prices fell Friday amid concerns about demand growth in 2025, particularly in China, the world’s top oil importer.
Brent fell 0.59% to $72.47 per barrel and American light crude (West Texas Intermediate, WTI) fell 0.66% to $68.92.
(Written by Pauline Foret)
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