- Wall Street expected to retreat, Walmart warns about its profits
- The CAC 40 lost 0.3% at mid-session
- Russian gas fears hurt stocks, boost oil
- The results of the major US technology groups in the crosshairs
by Laetitia Volga
PARIS, July 26 (Reuters) – Wall Street is expected to open lower on Tuesday while European stocks, except London, are in the red at mid-session on fears over Russian gas and a mixed reception reserved for several results businesses on the eve of a new monetary tightening by the Federal Reserve.
Futures contracts are signaling a decline of -0.38% for the Dow Jones .DJI , -0.36% for the Standard & Poor’s-500 .SPX and -0.45% for the Nasdaq.
In Paris, the CAC 40 .FCHI fell -0.27% to 6,220.84 around 11:50 GMT. In Frankfurt, the Dax .GDAXI lost -0.66% and in London, the FTSE .FTSE gained 0.53%.
The pan-European index FTSEurofirst 300 .FTEU3 gained 0.23%, the Eurozone EuroStoxx 50 .STOXX50E fell -0.41% and the Stoxx 600 .STOXX rose 0.12%.
Caution has dominated the markets since the beginning of the week, pending monetary policy decisions from the Federal Reserve, which is expected to raise its rates against inflation again on Wednesday.
The renewed uncertainties concerning Russian gas flows to Europe, which have led the EU-27 to agree to reduce their consumption next winter, are also encouraging investors to abandon risky assets.
➦ EU countries agree to reduce gas consumption
“The idea that the price to pay for supporting Ukraine against Russia will be gas rationing is increasingly widespread,” said Lyn Graham-Taylor, senior strategist at Rabobank. “All of this fuels concerns about recession and inflation.”
The publications of the results and forecasts of the major listed companies continue in the meantime. Those of Alphabet GOOGL.O and Microsoft MSFT.O will open the ball for the giants of the technology sector after the close of Wall Street.
USA-Values to follow on Wall Street (updated)
In pre-market trading, Walmart WMT.N caught the eye with a -9.8% drop, the number one retailer in the United States having lowered its annual and quarterly profit forecasts due to the inflation on the purchasing behavior of its customers.
➦ STOCK MARKET-Walmart lowers its forecasts with inflation, European distributors down
Investors are also aware of the results of General Motors GM.N, McDonald’s MCD.N and Coca-Cola KO.N.
➦ McDonald’s-Rising prices weigh on Q2 earnings despite demand
3M MMM.N reported lower adjusted earnings due to zero COVID strategy in China and announced the spin-off of its healthcare business.
VALUES IN EUROPE
The Stoxx distribution index .SXRP (-2.57%) posted the strongest sector decline after the downward revision of profit forecasts for the American Walmart WMT.N.
H&M HMb.ST, Marks & Spencer MKS.L and Zalando ZALG.DE lost between -3.26% and -5.69%.
At the CAC 40, Veolia VIE.PA lost -4.49% after advice from JPMorgan to “underweight” while Rémy Cointreau RCOP.PA fell -2.29% after its results.
➦ Rémy Cointreau shows his confidence after the rebound in China
Dassault Systèmes DAST.PA takes 0.75% after raising its diluted earnings per share target for 2022.
➦ Dassault Systèmes raises its annual objectives after a Q2 above expectations
UBS UBSG.S tumbled -7.15% after posting lower-than-expected second-quarter net profit as its investment banking and wealth management businesses suffered from tough market conditions.
➦ UBS posts lower-than-expected increase in Q2 net profit
The progress of the compartments of basic resources .SXPP (0.6%) and energy .SXEP (+1.36%) benefit the FTSE 100, as well as the rise of Unilever (+2.41%) and Compass CPG.L (+2.1%).
➦ Unilever raises sales forecast after better than expected H1 Compass raises growth forecast on post-COVID recovery
RATE
The yield of the Bund and that of the ten-year OAT evolve in two months at most, the announcement by Gazprom of an upcoming drop in its gas deliveries to Europe fueling fears of a sharp economic slowdown and of an energy crisis.
➦ Gazprom maintains pressure on gas flows to Europe
Deutsche Bank says Germany could get through the winter if Nord Stream 1 gas pipeline capacity is cut to 40%, but at just 20% heavy rationing is likely to be needed.
The ten-year German rate lost more than eight basis points to 0.923% and its French equivalent lost more than nine points to 1.515.
In their wake, the yield on US 10-year Treasury bills US10YT=RR stands at 2.7485%, down more than six basis points.
CHANGES
Fears around Russian gas also weigh on the euro, down -0.86% to 1.0132 dollars.
The dollar gains 0.68% against a benchmark basket .DXY .
OIL
Oil prices are up for the second consecutive session due to supply concerns in Europe.
Brent LCOc1 gained 1.61% to $106.84 a barrel and US light crude (West Texas Intermediate, WTI) CLc1 1.83% to $98.47.
PRINCIPAUX INDICATEURS ÉCONOMIQUES À L'AGENDA DU 26 JUILLET :
PAYS GMT INDICATEUR PÉRIODE CONSENSUS PRÉCÉDENT
USA 14h00 Ventes de logements neufs juin 660.000 696.000
(Rédigé par Laetitia Volga, édité par)
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