by Claude Chendjou
PARIS (Reuters) – Wall Street is expected to rise on Friday and the main European stock markets, apart from London, are also in the green at mid-session, investors continuing to show optimism after a week marked by central bank decisions , including the US Federal Reserve (Fed), which have paved the way for lower interest rates in 2024.
New York index futures signal Wall Street opening up 0.26% for the Dow Jones, 0.15% for the Standard & Poor’s 500 and 0.25% for the Nasdaq.
In Paris, the CAC 40, which set a session record on Thursday, rose 0.43% to 7,608.31 points around 1:00 p.m. GMT. In Frankfurt, the Dax, which also reached a historic peak on Thursday, advanced 0.13%. In London, the FTSE, weighed down by the health sector (-2.01%) including AstraZeneca (-2.29%), fell by 0.54%.
The pan-European FTSEurofirst 300 index is up 0.15%, the eurozone’s EuroStoxx 50 is up 0.33% and the Stoxx 600 is up 0.16%.
Over the week as a whole, the CAC gained 1.08% at this stage and the Stoxx 600 1.10%.
Fed Chairman Jerome Powell indicated Wednesday that the central bank’s key rates were approaching if not already peaking and that it was becoming appropriate to question the timing of a cut.
Money markets are now counting on a Fed rate cut in March with a probability of 79% compared to a probability of around 50% before Wednesday’s announcements, according to the CME Group’s Fedwatch barometer.
In the wake of the Fed’s decisions, which kept the Fed funds rate target unchanged at 5.25%-5.50%, the European Central Bank (ECB) and the Bank of England also opted Thursday for the status quo on borrowing costs.
On Friday, the governor of the Bank of France, François Villeroy de Galhau, affirmed that the next major decision of the ECB will be, barring any surprises, a reduction in the cost of money.
Deutsche Bank expects the ECB to cut rates by 150 basis points by the end of 2024, while Barclays forecasts an initial cut of 25 basis points in April, followed by further cuts at each meeting until January 2025 .
As for today’s economic indicators, the decline in activity in December in the euro zone with a preliminary composite PMI at 47.0 compared to 47.6 in November is relegated to the background. In Britain, the composite PMI index rose to 51.7 in December, its highest level in six months.
In the United States, industrial production data will be released at 2:15 p.m. GMT.
VALUES TO FOLLOW AT WALL STREET
Costco Wholesale rose 1.7% in pre-market trading after posting quarterly sales above consensus, as the growing number of customers turning to its stores to buy cheaper groceries offset slowing demand for everyday consumer products.
VALUES IN EUROPE
In Europe, the technology compartment (+0.85%) is in demand with the fall in bond yields. STMicroelectronics and Worldline take 2.71% and 2.04% respectively.
Basic resources (+2.31%) and cyclical consumption (+0.67%) are also trending well.
In the news of listed companies, Antin Infrastructure Partners jumped 6.19% thanks to the increase in JPMorgan’s recommendation to “overweight”.
Atos soars 19.45%, the group being in “advanced” discussions with Airbus (-0.64%) for its cybersecurity division.
Munich Re takes 0.13%, the German reinsurer having declared that it is targeting a net profit of 5 billion euros in 2024.
On the downside, Campari lost 2.81% after the announcement of the Italian spirits group’s purchase of the French cognac company Courvoisier for $1.2 billion, its largest acquisition.
RATE
The yield on the ten-year German Bund lost almost ten basis points, to 2.037%, to a nine-month low.
Its American equivalent drops a little more than three points, to 3.9073%.
CHANGES
On the foreign exchange market, the dollar strengthened by 0.14% against a basket of reference currencies, but remains close to more than four months.
The greenback is heading for its worst weekly performance since mid-July amid expectations of a Fed rate cut.
The euro lost 0.45% to $1.0942, and the pound sterling lost 0.16% to $1.2746.
OIL
Oil prices rose on Friday and were heading towards their first weekly gain in two months, as the International Energy Agency (IEA) revised upwards its forecast for growth in crude demand for 2024, to 1.1 million barrels per day.
Brent gained 0.73% to $77.17 per barrel and American light crude (West Texas Intermediate, WTI) gained 0.82% to $72.17.
(Written by Claude Chendjou, edited by Jean-Stéphane Brosse)
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