Traders work in IG index trading room
by Blandine Henault
PARIS (Reuters) – Wall Street is expected to fall on Friday, like the decline in European stock markets at midday, in a market context weighed down by fears about the trajectory of rates in the United States and on the Chinese economy.
Futures on New York indices signal an opening on Wall Street down 0.14% for the Dow Jones, 0.23% for the S&P 500 and 0.46% for the Nasdaq.
In Paris, the CAC 40 dropped 0.76% to 7,137.04 points around 10:40 GMT. In Frankfurt, the Dax lost 0.61% and in London, the FTSE dropped 0.73%.
The pan-European FTSEurofirst 300 index fell by 0.67%, the euro zone’s EuroStoxx 50 by 0.52% and the Stoxx 600 by 0.72%.
Recent statistics in the United States have shown a clear resilience of the American economy to the tightening of monetary conditions, which is fueling expectations of a high interest rate environment for an extended period.
Conversely, indicators from China point to a weakness in the world’s second-largest economy, which is struggling in particular to cope with a persistent real estate crisis. Chinese property developer Evergrande filed for bankruptcy protection in the United States on Thursday.
Investors are still waiting for major support measures from the Chinese authorities. In the United States, the speech of the Chairman of the Federal Reserve (Fed), Jerome Powell, scheduled for next Friday at the symposium in Jackson Hole (Texas) will be followed with great attention.
RATE
Risk aversion is pushing investors to take refuge in sovereign debt, which is weighing on yields which had climbed the day before with expectations of prolonged high rates.
The yield on ten-year Treasuries dropped nearly nine basis points to 4.223% after peaking at 4.328% the day before, the highest since last October.
Investors are watching October’s high of 4.338%, which, if breached, would bring the US 10-year rate back to 2007 levels.
In Europe, the yield of the ten-year German Bund, the benchmark for the region, fell by almost ten basis points, to 2.602%.
CHANGES
The dollar retreated (-0.14%) against a basket of benchmark currencies in the wake of falling US bond yields.
The greenback is nonetheless on track to post its fifth straight weekly increase, its longest series in 15 months, favored by its quality as a safe haven asset.
The euro is changing little against the dollar, at 1.0873.
VALUES IN EUROPE
No respite for Adyen, who, after his historic plunge of 39% on Thursday, lost another 2.5% on the Amsterdam Stock Exchange. In the process, the competitor Worldline fell by 1.8% in Paris.
The prospect of high rates for a longer period than expected weighs on the real estate sector (-1.17%). In Paris, Unibail-Rodamco-Westfield is the red lantern of the CAC 40, with a decline of 2.6%.
Only the technology (+0.1%) and community services (+0.67%) compartments are doing well.
OIL
Crude prices could end a seven-week winning streak as fears over Chinese growth and further U.S. interest rate hikes – two drags on demand – offset signs of oil price cuts. the offer.
The barrel of Brent from the North Sea lost 0.2% to 83.94 dollars and that of American light crude (WTI) lost 0.1% to 80.29 dollars.
(Written by Blandine Hénault)