PARIS (Reuters) – Wall Street is expected to fall at the opening on Tuesday, as corporate earnings take precedence over optimism about the Federal Reserve, and European stocks are moving lower at mid-session, held back in particular by the caution of put before the decisions of the European Central Bank (ECB).
Futures contracts on the main New York indices are signaling a decline of 0.33% for the Dow Jones, 0.26% for the Standard & Poor’s-500 and 0.39% for the Nasdaq.
Wall Street ended sharply higher in the previous session, with the Nasdaq gaining 2%, driven by big tech stocks, as markets expect the pace of the Federal Reserve’s rate hike to slow to 25 basis points. .
But before the Fed’s decisions next week, investors are bracing for a succession of corporate results, including those of Microsoft – the second largest market capitalization in the United States – after the close of US markets.
“We will finally have the opportunity to see how much the fall in consumer confidence and the reduction in discretionary spending have affected the results of the global behemoths, whether it is the old or the new guard”, points out the AJ Bell company in a note.
In Paris, the CAC 40 is stable at 7,032.09 at 12:23 GMT. In Frankfurt, the Dax dropped 0.27% and in London, the FTSE lost 0.22%.
The pan-European FTSEurofirst 300 index fell 0.27%, the Eurozone EuroStoxx 50 fell 0.17% and the Stoxx 600 fell 0.3%.
In the euro zone, the first results of the S&P Global PMI surveys show an unexpected return of activity to the growth zone in January, enough to fuel hopes of a less severe economic slowdown but also to confirm the monetary tightening strategy of the ECB.
“For the ECB, this should seal the decision for a 50 basis point rate hike next week,” ING economists said in a note.
Christine Lagarde, the institution’s president, said on Monday evening that interest rates should still “rise substantially at a steady pace to reach sufficiently restrictive levels and remain at these levels for as long as necessary” in order to slow the inflation, which is still far too high.
WALL STREET VALUES TO FOLLOW
In pre-market trading, 3M lost 2.5% after posting lower quarterly profit and General Electric lost 2.6% as the industrial conglomerate forecast lower-than-expected adjusted profit for 2023.
Johnson & Johnson shares were listed up 2.2% as the pharmaceutical giant expected full-year profit to beat analysts’ expectations on demand and a recovery in its medical equipment business.
VALUES IN EUROPE
In Europe, Dassault Aviation fell 3.68%, penalized by the lowering of the board of Exane BNP Paribas to “neutral”.
Swatch Group takes 1.24%, the watchmaking group saying it is optimistic about the recovery of the Chinese market after an increase in its overall sales of 2.5% in 2022.
British conglomerate AB Foods, which owns Primark, dropped 1.87% after warning that headwinds could impact consumer spending in 2023.
RATE
On the bond markets, the yields on US Treasury bonds lost some ground in the face of the prospect of a moderation in monetary tightening by the Fed: that of the two-year, the most sensitive to expectations of changes in key rates, lost two basis points to 4.2188% and the ten-year fell in the same proportions below 3.5%.
The European market is relatively stable, with a decline of less than a basis point for the ten-year German, to 2.188%.
CHANGES
The dollar depreciated by 0.06% against a basket of reference currencies and the euro was unchanged at 1.0867 dollars.
The pound is down almost 0.5% against the euro and the dollar, as UK PMI results showed economic activity weakened further this month, falling to the lowest since two years.
OIL
Oil prices changed little, with concerns about the slowdown in the global economy and the expected increase in inventories in the United States being offset by hopes of a recovery in demand in China.
Brent gained 0.19% to 88.36 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.28% to 81.85 dollars.
(Laetitia Volga, edited by Tangi Salaün)
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