by Claude Chendjou
PARIS (Reuters) – Wall Street is expected to rise slightly on Thursday and European stocks are trading green mid-session amid cautious optimism over the prospect of an imminent end to the U.S. Federal Reserve’s monetary tightening (Fed), after the publication the day before of the figures for consumer prices in the United States, while those of production are expected before the opening of the session in New York.
The positive trend is also supported by the first quarterly results of companies, particularly in the luxury sector where LVMH reported a better quarter than expected. Futures on New York indices signal an opening on Wall Street up 0.03% for the Dow Jones, 0.13% for the Standard & Poor’s 500 and 0.31% for the Nasdaq.
Around 11:30 GMT, the Parisian CAC 40 rose 1.06% to 7,475.52 points after hitting a historic high of 7,481.86. In Frankfurt, the Dax gleans 0.06% and in London, the FTSE takes 0.01%.
The pan-European FTSEurofirst 300 index gained 0.25%, the euro zone EuroStoxx 50 0.44% and the Stoxx 600 0.38%.
After the monthly consumer price statistics (CPI) in the United States, which showed a more marked slowdown than expected over one month (+0.1%) and at an annual rate (+5.0%), investors will take knowledge at 12:30 GMT of US producer prices (PPI). The Reuters consensus forecasts a deceleration of the PPI to 3.0% over one year in March after +4.6% in February and zero growth over one month after a contraction of 0.1% previously.
The weekly jobless claims will offer new elements on the evolution of the American economy, while the monthly report on employment showed a still sustained pace of job creations in the United States.
The minutes of the last Fed meeting, published on Wednesday, showed that several bank officials in March considered a pause in the rise in interest rates after the detachment of two regional banks in the United States.
With the major Wall Street banks set to kick off the US earnings season on Friday, money markets are currently pricing in a high probability of a limited 25 basis point Fed rate hike next month. before a decline by the end of the year. WALL STREET VALUES TO FOLLOW
Delta Air Lines advanced 3% after a better-than-expected second-quarter profit forecast.
Alibaba fell 1.3% in out-of-hours trading on Wall Street in response to news that Japanese conglomerate SoftBank Group has decided to withdraw almost entirely from the Chinese e-commerce giant.
Harley-Davidson sold 4% ahead of the stock market, the motorcycle manufacturer having announced on Wednesday that its chief financial officer Gina Goetter would leave the group at the end of the month to join the toy manufacturer Hasbro.
VALUES IN EUROPE
LVMH, which achieved sales growth twice as high as expected in the first quarter thanks in particular to China, jumped 4.47% after hitting a historic peak of 878.2 points. The world number one in luxury, which represents nearly 14% of the CAC 40 index, is pulling its entire sector, allowing Kering to gain 1.61%, Hermès 2.51%, Moncler 3.68% and Burberry 2.24%.
“We’re likely to see a few surprises like this this year, especially with companies exposed to China’s middle class and consumer spending which was obviously held back last year by lockdowns,” Andrew said. Bell, managing director of Witan Investment Trust.
The consumer discretionary sector leads the Stoxx 600 with a gain of 2.86%.
The British supermarket chain Tesco takes 1.83% on the back of the announcement of a stable annual profit forecast after a drop of 6.3% in 2022-2023 linked to high inflation.
CHANGES
The dollar fell 0.18% against a basket of benchmark currencies, to a two-month low after the US consumer price data.
The euro is trading at 1.1017 dollars (+0.25%).
The pound sterling is displayed at 1.25075 dollars (+0.18%), despite the stagnation of the British economy in February.
RATE
Bond yields are generally stable: that of ten-year US Treasury bills stands at 3.4243% and that of the German Bund at 2.367%.
The gap between these two maturities narrowed on Thursday to its lowest level in two years, while expectations of further rate hikes in the euro zone strengthened further.
Money markets are pricing in an additional 75 basis point rate hikes from the European Central Bank (ECB) by the end of the year. Christine Lagarde, the president of the institute, must speak during the day at meetings of the World Bank and the International Monetary Fund (IMF).
OIL
Oil prices fell amid fears of a possible recession in the United States which could weigh on demand: Brent fell 0.55% to 86.85 dollars a barrel and American light crude (West Texas Intermediate, WTI) 0 .5% to $82.84.
(Written by Claude Chendjou, edited by Kate Entringer)
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