by Claude Chendjou
The main European stock markets are expected to rebound at the opening on Thursday after two consecutive sessions in the red but the imminent publication of monthly inflation figures in the United States could limit gains as investors reassess the timetable for the fall in rates of the major central banks a little more than two weeks before their respective meetings.
According to the first available indications, the Parisian CAC 40 should gain 0.67% at the opening, the Dax in Frankfurt 0.58% and the FTSE 100 in London 0.30%. The EuroStoxx 50 index is expected to increase by 0.65%.
While the US Federal Reserve (Fed) will hold its next monetary policy meeting on January 30 and 31, while those of the Bank of England (BoE) and the European Central Bank (ECB) are expected on February 1, the Investors will see consumer price data (CPI) for the month of December in the United States at 1:30 p.m. GMT.
The Reuters consensus forecasts a reacceleration of the CPI last month to 0.2% month-on-month and 3.2% year-on-year, after an increase of 0.1% and 3.1% respectively in November.
“The risk is that markets will opt for a sell-off in the event of high numbers,” warns Ben Bennett, strategist at Legal and General Investment Management (LGIM). “The reaction could be more muted if we got a moderate number,” he adds.
Traders now expect the Fed to cut rates by 140 basis points this year compared to 160 basis points expected at the end of 2023.
A WALL STREET
The New York Stock Exchange ended higher on Wednesday, benefiting from gains recorded by high-growth stocks, led by technology giants.
The Dow Jones index gained 0.45%, or 170.57 points, to 37,695.73 points.
The broader S&P-500 gained 26.95 points, or 0.57%, to 4,783.45 points.
The Nasdaq Composite advanced 111.94 points (0.75%) to 14,969.65 points.
After a solid end to 2023, the main Wall Street indices are struggling to register a positive dynamic due to mixed economic data and comments from Fed officials having caused doubts among investors about the calendar and the the extent of a potential shift in the monetary policy of the American central bank.
John Williams, president of the New York Fed, said Wednesday that it was premature to call for rate cuts, citing the road ahead to bring inflation back toward the 2 percent target.
Among the major sectors of the S&P-500, communication services recorded the largest increase, driven by the 3.65% jump in Meta Platforms which reached a session peak since September 2021 after Mizuho raised its target of course.
Other technology stocks, such as Microsoft and Nvidia, also contributed to the performance of the S&P-500. Nvidia gained 2.28% to climb to a closing record after semiconductor maker TSMC reported better-than-expected quarterly results.
IN ASIA
On the Tokyo Stock Exchange, the Nikkei index ended with a gain of 1.77% to 35,049.86 points, exceeding the threshold of 35,000 points for the first time since February 1990. The broader Topix gained 1.57% to 2,482.87 points at the close.
The MSCI index bringing together stocks from Asia and the Pacific (excluding Japan) gained 0.80%.
In China, the Shanghai SSE Composite gained 0.17% and the CSI 300 increased by 0.44%.
EXCHANGES/RATES
The dollar fell 0.12% against a basket of reference currencies before the American inflation figures.
The euro advanced 0.09%, to $1.0981, while the pound sterling stood at $1.2765 (+0.20%).
Among the cryptocurrencies, bitcoin lost 0.36%, to 45,781.64 dollars after the officialization by the SEC, the stock market watchdog, of the authorization of traded funds (ETFs) backed by this electronic currency, which took more than 70 % since October.
On the bond market, the yield on ten-year US Treasury bonds fell by a little more than one basis point, to 4.015% but remained above the 4% threshold.
OIL
The oil market is impacted by fears of an escalation in the Middle East due to the conflict between Hamas and Israel, while tensions in the Red Sea are increasing.
Brent advanced 0.66% to $77.31 per barrel and American light crude (West Texas Intermediate, WTI) rose 0.63% to $71.82.
(Writing by Claude Chendjou, edited by Kate Entringer)
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