by Laetitia Volga
PARIS (Reuters) – Wall Street is expected to rise and European stocks rose sharply mid-session on Friday, as reports that China may ease its anti-COVID-19 measures allow investors to return to risky assets after the disappointment prompted by the Federal Reserve. Futures contracts are signaling a gain of 0.54% for the Dow Jones, 0.84% for the Standard & Poor’s-500 and 0.83% for the Nasdaq.
This trend could change after the publication at 12:30 GMT of the US employment report, the evolution of the labor market constituting a key data for the trajectory of monetary policy of the Fed.
In Paris, the CAC 40 gained 2.48% to 6,397.91 around 11:55 GMT. In Frankfurt, the Dax took 1.9% and in London, the FTSE rose by 1.3%.
The pan-European FTSEurofirst 300 index gains 1.38%, the EuroStoxx 50 in the euro zone advances by 2.15% and the Stoxx 600 by 1.63%.
China will soon make significant changes to its “dynamic zero COVID-19” strategy to fight the spread of the SARS-CoV-2 coronavirus, a former senior Chinese health official said at a Citi-hosted conference, according to a recording. of his intervention that Reuters was able to listen to.
“China’s policy so far has clearly held back growth, not just in China but elsewhere as well…but if China now changes its strategy, then that’s a positive development,” said Stuart Cole, macroeconomist at Equiti Capital.
Robert Carnell, head of research at ING, believes that a drastic change in COVID policy should not be expected before at least the annual session of the National People’s Assembly in March, but these rumors offer a good entry point for investors.
Stocks have suffered in the past two sessions from comments by Fed Chairman Jerome Powell about the likely higher-than-expected spike in the fed funds target in an effort to stem inflation.
Investors are now awaiting the release of the official US jobs report in October. Economists polled by Reuters on average expect a slowdown in job creation to 200,000, with an unemployment rate of 3.6% and an increase in the average hourly wage of 0.3% over one month and 4.7% over a year. WALL STREET VALUES TO FOLLOW
VALUES IN EUROPE
All the major European sectors are on the rise with a very marked increase for the commodity compartment. Its Stoxx index climbed 5.47%.
In Paris, ArcelorMittal leads the CAC 40 with a gain of 6.36%.
Luxury stocks, very dependent on the Chinese market, also stand out: Hermès, LVMH and Kering gain from 4.51% to 5.66%.
The latter also benefits from information from the Wall Street Journal on possible discussions for the acquisition of the Tom Ford brand.
In the news of the results, Societe Generale (+4.47%) published quarterly performance above expectations thanks to its trading activities.
JCDecaux shares rose 10.23% as the outdoor advertising specialist reported quarterly revenue growth above expectations.
RATES/EXCHANGES
The prospect of lasting monetary tightening in the United States continues to drive up Treasury yields. That of the ten takes more than three basis points to 4.1563%.
In Europe, its German equivalent gains four points to 2.284%.
Christine Lagarde and Luis de Guindos, the President and Vice-President of the European Central Bank respectively, underlined that the Frankfurt institution continued to give priority to slowing inflation in the euro zone to prevent it takes root.
Side currencies, the euro takes 0.5% to 0.98 dollar. The greenback fell 0.5% against a basket of benchmark currencies.
OIL
Information on COVID in China and the drop in the dollar allow the barrel of Brent to gain 3.16% to 97.66 dollars and that of American light crude (West Texas Intermediate, WTI) to gain 3.48% to 91 ,24.
(Written by Laetitia Volga, Editing by Kate Entringer)