by Claude Chendjou
PARIS (Reuters) – The main European stock markets are expected to see slight variations on Monday in the absence of major catalysts for the day’s session and pending the publication of indicators such as inflation in the euro zone and retail sales in the United States, as well as new company results.
According to the first available indications, the Parisian CAC 40 should gain 0.41% at the opening, the Dax in Frankfurt 0.49% and the FTSE 100 in London 0.14%. The EuroStoxx 50 index is expected to increase by 0.42%.
While awaiting the publication on Wednesday of monthly consumer prices in the euro zone and retail sales in the United States, the main indicators of the week, investors only have at their disposal this Monday the figures for industrial production in the euro zone for the month of November and data on German gross domestic product (GDP) for 2023 while an economic slowdown remains feared.
Last week, two officials from the European Central Bank (ECB), Luis de Guindos and Isabel Schnabel, estimated that the euro zone could have slipped into recession in the last quarter of 2023, while the short-term economic outlook remains gloomy.
On the microeconomic side, after the publications on Friday from JPMorgan Chase, Bank of America, Citigroup and Wells Fargo, the results season will continue with Goldman Sachs and Morgan Stanley on Tuesday in the United States, while in Europe, Renault, Richemont and even Burberry are expected, the latter having already issued a warning last week on its profit forecast.
This Monday also marks the start of the World Economic Forum in Davos, Switzerland, which will end on January 19.
A WALL STREET
The New York Stock Exchange ended Friday in scattered order and with slight variations, shared between the mixed results of the major American banks and an inflation indicator reinforcing the hypothesis of an upcoming reduction in interest rates from the Federal Reserve (Fed).
The Dow Jones index lost 0.31%, or 118.04 points, to 37,592.98 points.
The broader S&P-500 gained 3.59 points, or 0.08%, to 4,783.83 points.
The Nasdaq Composite finished almost stable with a gain of 2.58 points (0.02%) to 14,972.76 points.
Over the week, the S&P-500 achieved its best weekly performance since mid-December with a gain of 1.84% while the Dow for its part increased by 0.34% and the Nasdaq by 3.09%, its sharpest increase since the beginning of November.
The big banks on Wall Street kicked off the corporate results season on Friday and their publications were marked by a drop in profits in the fourth quarter.
JPMorgan ended down 0.73%, Bank of America 1.06% and Wells Fargo 3.34%. Citigroup, which announced the elimination of 20,000 jobs, or around 8% of its workforce, over the next two years, stood out with a gain of 1.04%.
The Dow Jones index was especially penalized by the 3.37% decline in UnitedHealth shares, the health insurer having announced higher costs than expected. The airline Delta Air Lines fell 8.97% after a profit warning.
IN ASIA
On the Tokyo Stock Exchange, the Nikkei index ended with a gain of 0.91% to 35,901.79 points, while the broader Topix gained 1.22% to 2,524.6 points. The Nikkei reached a new 34-year high, driven by banks and shipping companies.
The MSCI index bringing together stocks from Asia and the Pacific (excluding Japan), on the other hand, lost 0.21%, after having fallen by 0.8% last week.
In China, the Shanghai SSE Composite gained 0.09%, while the CSI 300 lost 0.17%.
The Chinese central bank increased its liquidity injections (89 billion yuan via seven-day reverse repos) but surprised the markets by leaving its MLF (medium-term loan facilities) rate unchanged at 2.5% while economists polled by Reuters expected a cut to support the economy.
VALUES TO FOLLOW IN EUROPE:
EXCHANGES/RATES
The dollar fell 0.12% against a basket of reference currencies, with future contracts showing with a 75% probability that the Fed will lower its rates in March, producer price growth (PPI) in the United States having emerged less strong than expected in December.
The euro advanced 0.14%, to $1.0964, while the pound sterling was stable, at $1.2751.
In the bond market, the yield on ten-year US Treasury bonds is virtually unchanged at 3.939%, after falling to a one-week low of 3.916% on Friday.
OIL
The oil market rises slightly as investors monitor the situation in the Middle East and the Red Sea where tensions are worsening: Brent nibbles 0.08% to 78.35 dollars per barrel and American light crude (West Texas Intermediate , WTI) gains 0.04% to 72.65 dollars.
(Writing by Claude Chendjou, edited by Kate Entringer)
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