by Claude Chendjou
PARIS (Reuters) – Wall Street is expected to rise slightly on Monday at the opening and European stock markets also rebound cautiously at mid-session, investors momentarily putting aside fears linked to geopolitical tensions in the Middle East to focus on results from several American behemoths expected this week and decisions from the American Federal Reserve (Fed).
New York index futures signal Wall Street opening up 0.58% for the Dow Jones, 0.60% for the Standard & Poor’s 500 and 0.72% for the Nasdaq after an orderly session dispersed Friday marked by a decline in the first two indices.
In Paris, the CAC 40 rose 0.66% to 6,840.47 points around 11:20 GMT. In Frankfurt, the Dax gained 0.56% and in London, the FTSE gained 0.83%.
The pan-European FTSEurofirst 300 index rose by 0.74% and the eurozone’s EuroStoxx 50 by 0.72%. The Stoxx 600, which has lost more than 4% over the last two weeks, rebounded by 0.62%.
The latest developments from the Gaza Strip, where the Israeli army says it is moving forward “in accordance with the planned plan”, appear to have no impact on the financial markets.
“The ground offensive in Gaza will still raise concerns, but it is widely expected and that is why, I think, we have not seen a particularly negative reaction on the markets today,” notes Susannah Streeter, head of foreign exchange and financial markets at Hargreaves Lansdown.
The ebbing of geopolitical fears comes as the Fed begins a two-day monetary policy meeting on Tuesday that is expected to result in a status quo on interest rates, according to CME Group’s Fedwatch barometer.
The day after the Fed’s decision, the Bank of England (BoE) will make its decision, while in the euro zone the European Central Bank (ECB) opted last week for a pause after ten successive increases in its rates.
The governor of the Lithuanian central bank Gediminas Simkus estimated on Monday that the ECB will not need to raise its rates in December, barring a major surprise.
On the bond market in Europe, yields are falling slightly while data on inflation in Spain and in certain Landër in Germany show stagnation, or even a slowdown in the rise in prices, pending the publication at 12:00 GMT of the figures in this area at the national level of Europe’s largest economy.
On the microeconomic level, investors are awaiting quarterly results this week from Apple, McDonald’s, Pfizer and Eli Lilly. Among S&P 500 companies that have already published their quarterly results, 78% have exceeded analysts’ expectations.
VALUES TO FOLLOW AT WALL STREET
Apple, which is holding a conference to present new products in the evening, is in the green, while growth stocks like Amazon and Tesla are up 0.9% to 1.6%.
VALUES IN EUROPE
ArcelorMittal lost 4.51%, the group having confirmed discussions with a view to nationalizing its subsidiary in Kazakhstan following a deadly fire in a coal mine over the weekend.
Dassault Systemes takes 3.13% thanks to JPMorgan’s decision to move from “underweighting” to “overweighting” on the value.
Siemens Energy continues its recovery (+5.61%), concerns regarding the group’s ability to provide guarantees for large industrial projects having eased in a context of continuing negotiations with the German state.
On a sectoral level, the health sector (+0.93%) posted one of the best gains in the Stoxx 600, driven in particular by Novo Nordisk (+2.86%) and Sanofi (+1.63%), which the latter regaining part of the ground lost on Friday after the announcement of the abandonment of its margin objective for 2025.
RATE
US bond yields remain higher as investors digest the latest economic data and its impact on the long-term trajectory of Fed rates.
The American ten-year rose five basis points on Monday, to 4.9006%, but it had crossed the 5% threshold at the beginning of the month.
In the euro zone, the yield on the German Bund of the same maturity fell by a little more than one basis point, to 2.836%.
CHANGES
The dollar fell 0.11% against a basket of reference currencies, including the euro which gained 0.26% to 1.0591 dollars.
The Japanese currency, on the other hand, is trading at 149.77 yen per dollar, down 0.11% as the Bank of Japan (BoJ) began a two-day monetary policy meeting on Monday. Currency traders remain divided on a possible change in BoJ policy.
OIL
The oil market starts the week in decline after gaining 3% on Friday against a backdrop of tensions in the Middle East: Brent fell by 1.05% to 89.53 dollars per barrel and American light crude (West Texas Intermediate, WTI) fell 1.31% to 84.42 dollars.
(Written by Claude Chendjou, edited by Blandine Hénault)
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