by Claude Chendjou
PARIS (Reuters) – The main European stock markets are expected to rebound cautiously on Friday on the eve of the start of the quarterly results season in the United States which will be given by the major Wall Street banks, while data on inflation in the euro zone and the United States is tempering expectations of a drop in interest rates.
According to the first available indications, the Parisian CAC 40 should gain 0.72% at the opening following a decline of 0.52%. The Dax in Frankfurt could rebound by 0.71% after a fall of 0.86% and the FTSE 100 in London should rise by 0.40% after a decline of 0.98%. The EuroStoxx 50 index is expected to rise by 0.78% compared to a fall of 0.60% the day before.
The final figures for consumer prices in France for the month of December will be published this Friday at 07:45 GMT while awaiting those for the entire euro zone next Wednesday while the preliminary indicator showed that inflation in the bloc started to rise again last month year-on-year (+2.9%).
Speaking on France 2, the President of the European Central Bank (ECB), Christine Lagarde, declared Thursday evening that rates will only fall if it becomes certain that inflation will return towards 2%, while estimating that the The price of money had probably reached its peak.
In the United States, where producer prices (PPI) will be known at 1:30 p.m. GMT after Thursday’s publication of consumer prices (CPI), the CPI accelerated in December by 0.3% over one month and by 3. 4% over one year, above expectations, reviving concerns about the evolution of interest rates.
Richmond Federal Reserve President Thomas Barkin said he was waiting to be convinced that inflation was heading toward the central bank’s 2% target, while his branch colleague of Cleveland, Loretta Mester, judged a drop in the cost of credit as “probably” premature as of March.
In addition to questions about inflation, there are fears about company results and forecasts, while the major American banks are expected to report this Friday a drop in their profits for the fourth quarter against a backdrop of an increase in provisions.
A WALL STREET
The New York Stock Exchange ended in mixed order on Thursday, without major changes, while data indicating a more marked acceleration than expected in consumer prices and a solidity of the employment market in the United States attenuated the optimism about an imminent drop in interest rates.
The Dow Jones index gained 0.04%, or 15.29 points, to 37,711.02 points.
The broader S&P-500 lost 3.21 points, or 0.07%, to 4,780.24 points.
The Nasdaq Composite advanced 0.54 points to 14,970.19 points.
Today’s indicators “reinforce the idea that the market has gotten a little carried away with the timing of rate cuts,” commented Seema Shah, chief strategist at Principal Asset Management in London.
For the most part, the major sectors of the S&P-500 ended the session in the red, with only energy and technology seeing an increase.
Microsoft briefly dethroned Apple as the world’s largest capitalization, while the iPhone maker’s stock has lost nearly 4% since the start of the year amid concerns about slowing demand. Microsoft finished at +0.49% and Apple at -0.32%.
IN ASIA
On the Tokyo Stock Exchange, the Nikkei index gained 1.5% to 35,577.11 points, reaching a new 34-year high during the session, thanks to the weakness of the yen. The broader Topix rose 0.46% to 2,494.23 points at the close.
The MSCI index bringing together stocks from Asia and the Pacific (excluding Japan) rose 0.1%.
In China, the Shanghai SSE Composite lost 0.16% and the CSI 300 lost 0.35%.
In terms of indicators, China’s exports and imports increased in December, respectively by 2.3% and 0.2% year-on-year, while consumer prices fell in December (0.3% year-on-year). ) for the third consecutive month, a sign of persistent deflationary pressures in the world’s second largest economy.
CHANGES
The dollar rose 0.10% against a basket of benchmark currencies, remaining well above the five-month low of 100.61 points reached in December.
The euro is stable (-0.02%) at 1.0968 dollars, while the pound sterling stands at 1.2765 dollars (+0.04%) after a stronger than expected rebound in British GDP in November (+0.3%).
RATE
On the bond market, the yield on ten-year US Treasury bonds is almost stable, at 3.9861%, after a decline of 4.9 points the day before.
The yield on the German Bund of the same maturity stands at 2.161%, down more than four basis points.
OIL
The oil market is rising as the United States and Britain carried out strikes against the Houthis in Yemen for the first time since the group launched attacks in the Red Sea.
Brent rose 2.23% to $79.14 per barrel and American light crude (West Texas Intermediate, WTI) rose 2.3% to $73.68.
(Written by Claude Chendjou, edited by Nicolas Delame and Kate Entringer)
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