A trader at the New York Stock Exchange
by CORENTIN CHAPPRON
PARIS (Reuters) – Wall Street is expected to rise slightly on Monday, while European stocks retreat mid-session after a mixed U.S. jobs report, and ahead of the release of U.S. and Chinese inflation data this week . New York index futures suggest a higher opening on Wall Street, with the Dow Jones nibbling 0.13%, while the Standard & Poor’s 500 rose 0.24% and the Nasdaq 0.36%. In Paris, the CAC 40 dropped 0.60% to 7,270.83 points around 10:45 GMT, while the FTSE in London lost 0.73% and the Dax in Frankfurt 0.76%. The pan-European FTSEurofirst 300 index fell 0.50%, compared to 0.61% for the EuroStoxx 50 and 0.53% for the Stoxx 600. The official US jobs report, released on Friday, showed growth higher than consensus, reviving fears of more persistent than expected inflation, despite weaker than expected job creations in July. The publication of inflation data in the United States on Thursday will therefore be essential to judge this persistence, as the markets continue to be divided on the Federal Reserve’s next monetary policy decision. “The last three US inflation figures in April, May and June showed a marked slowdown in underlying inflation, (…) and if this slowdown is confirmed in July, this will further strengthen expectations that the Fed can end its cycle of rate hikes”, summarize the strategists of MUFG. In addition, the Chinese inflation indicator is expected on Wednesday and will be scrutinized by investors who will seek confirmation that the world’s second largest economy is on the verge of deflation, the country’s activity remaining disappointing. STOCKS TO WATCH ON WALL STREET Berkshire Hathaway reported record quarterly earnings on Saturday, while stock gains helped deliver an overall profit of nearly $36 billion. Icahn Enterprises said Friday it was contacted by the Securities and Exchange Commission, America’s stock market watchdog, which is seeking information about the company. VALUES TO FOLLOW IN EUROPE In France, Teleperformance stumbles 2.33% at the bottom of the CAC 40 after Goldman Sachs lowered its recommendation from “buy” to “neutral”. OHB climbed 31.68% to 42.4 euros, the group having announced a takeover bid from the KKR investment fund to buy back all the shares in circulation for 44 euros per share. Siemens Energy lost 5.79% in a volatile session after announcing that problems with its wind turbines would cost it 2.2 billion euros, which should lead to a net loss of 4.5 billion euros for 2023.
The basic resources sector was at the bottom of the Stoxx 600 sectors, down 1.43%, led by the drop in Aurubis, which fell 6.7% after announcing that it expected a drop in the activity in Europe this year. RATES Rates are rising on both sides of the Atlantic after tumbling on Friday, and as the United States is due to issue $103 billion in debt this week. The German ten-year yield gained 6.3 bp to 2.601%, while that of the two-year rate remained stable at 3.172%. The ten-year Treasury yield rose 5.7 bp to 4.1189%, against a rise also of 5.7 bp to 4.8478% for the two-year. EXCHANGES The dollar strengthened by 0.32% against a basket of reference currencies, after having fallen sharply on Friday after the publication of official data on employment. The euro dropped 0.39% to 1.0969 dollars, data on German industrial activity published Monday having surprised on the downside and worried about the state of the European economy. The pound sterling fell 0.21% to 1.2721 dollars. OIL Crude prices are consolidating after hitting their highest level in almost four months on Friday, as Saudi Arabia and Russia pleaded for an extension in September of previously announced production cuts. Brent fell 1.02% to 85.36 dollars a barrel and US light crude (West Texas Intermediate, WTI) fell 1.09% to 81.92 dollars a barrel.
(Report Corentin Chapron, edited by Blandine Hénault)