The Frankfurt Stock Exchange, Germany
PARIS (Reuters) – Wall Street is expected to rise moderately on Monday, while European stocks rose slightly in a context of caution after worrying developments in the Chinese real estate sector and in a context of geopolitical uncertainty.
Futures on New York indices suggest an opening on Wall Street in weak progress, the Dow Jones nibbling 0.17%, while the Standard & Poor’s 500 rose by 0.21% and the Nasdaq by 0.37%.
In Paris, the CAC 40 rose by 0.35% to 7,365.85 points around 10:45 GMT, against an advance of 0.57% for the Dax in Frankfurt. The FTSE in London fell 0.27% as the index was more exposed to commodities and China.
The pan-European FTSEurofirst 300 index gains 0.19%, against 0.41% for the EuroStoxx 50 and 0.27% for the Stoxx 600.
Country Garden, China’s largest private developer, is seeking a payment extension for one of its foreign-currency bonds, a development that has worried investors so far considering the developer one of the strongest.
Two investment funds also declared this weekend that they had not received the expected payments on certain assets linked to the insurer Zhongrong International Trust, exposed to the real estate market.
“A crisis in China’s real estate sector is a story the market has heard before and one that usually doesn’t end well for stocks,” said Russ Mould, chief investment officer at AJ Bell.
Adding to market concerns, Russia announced on Sunday that it had fired a warning shot to stop a cargo ship heading for Ukraine.
THE VALUES TO FOLLOW IN WALL STREET
United States Steel launched a formal review of its strategic options on Sunday, after rejecting a takeover bid from rival steelmaker Cleveland-Cliffs, which valued it at $7.3 billion. VALUES TO FOLLOW IN EUROPE
The energy sector and the raw materials sector posted the worst performances of the Stoxx 600 sectors, down 0.57% and 0.33% respectively. Concerns about the state of the Chinese economy are weighing on both sectors.
Philips posted one of the best performances of the Stoxx 600, up 4.9%, after announcing that the investment fund Exor would take a 15% stake in its capital.
Valneva fell 10.93% after the FDA’s decision to postpone the target date for regulatory review of its Chikungunya vaccine.
RATE
Rates are stable on both sides of the Atlantic in the absence of major economic indicators and in a context of weak trade.
The yield on the ten-year Treasury is stable at 4.1542%, against 4.8927% for the two-year. The ten-year German yield lost 1.5 bp to 2.606%, that of the two-year rate fell by 1.2 bp to 3.026%. CHANGES
Like interest rates, exchange rates are stable in the absence of a major indicator. The dollar is treading water against a basket of benchmark currencies, the euro nibbling 0.05% to 1.0949 dollars, while the pound sterling advances 0.13% to 1.2711 dollars.
OIL
Oil is eroding moderately with fears about the Chinese economic situation. Brent fell 0.44% to $86.43 a barrel, with US light crude (West Texas Intermediate, WTI) falling 0.49% to $82.78.
NO INDICATOR EXPECTED ON THE AGENDA
(Writing by Corentin Chapron, editing by Kate Entringer)