by Claude Chendjou
PARIS (Reuters) – Wall Street is expected to be in disarray on Wednesday and European stock markets also moved irregularly mid-session, with investors torn between caution and hope for an easing of the restrictive policy at the end of the year. US Federal Reserve (Fed) nears the conclusion of its two-day meeting. New York index futures are signaling a Wall Street open down 0.08% for the Dow Jones, while the Standard & Poor’s 500 could gain 0.06% and the Nasdaq 0.2%. In Paris, the CAC 40 fell 0.21% to 6,314.97 around 11:40 GMT. In Frankfurt, the Dax lost 0.01% and in London, the FTSE lost 0.4%.
The pan-European FTSEurofirst 300 index, on the other hand, rose by 0.01% and the Stoxx 600 by 0.03%. The EuroStoxx 50 of the euro zone fell by 0.09%.
The Fed’s monetary policy statement will be released at 6:00 p.m. GMT and will be followed half an hour later by a press conference by its chairman, Jerome Powell.
“The Fed is likely to proceed with another large rate hike of 75 basis points, but that’s already priced in (by the markets),” said Susannah Streeter, investment and market analyst at Hargreaves Lansdown.
According to her, it is the words chosen by Jerome Powell and his remarks on the economic outlook that will be at the center of the concerns.
“There are high hopes that it indicates there may be some easing in the US central bank’s aggressive approach to tackling inflation,” she said.
Traders expect a rise of just 50 basis points in December, after three consecutive increases of 75 points.
In Europe, the rise in unemployment in Germany and the publication of the final monthly figures for the PMI indicators in the manufacturing sector in the euro zone, which confirm a worsening of the economic situation, did not have a major impact on equities.
These are mainly supported by the luxury sector and the health sector thanks to speculation on an easing of health restrictions in China and the solid results of Novo Nordisk.
WALL STREET VALUES TO FOLLOW
Advanced Micro Devices jumped 4.2% in pre-market trading as the semiconductor maker said it expected revenue growth from its data center business and vowed to be cautious about expenses.
In addition, of the 307 S&P 500 companies that have already published their third quarter results, 72.3% have exceeded analysts’ earnings expectations, according to IBES data from Refinitiv, against 66% in usual for such a quarter. .
VALUES IN EUROPE
The major European stocks in the luxury sector, very exposed to China, continue to benefit from the hope of an easing of anti-COVID-19 measures in the country: LVMH takes 0.92%, Hermès 0.3%.
In health (+1.18%), the biggest rise in the Stoxx 600, Novo Nordisk jumped 4.61%. The Danish pharmaceutical group has announced that it has revised upwards its forecasts for the whole of the year after a growth in its turnover of 16% at constant exchange rates over the first nine months of the financial year.
GSK, up 1.25%, is also supported by the increase in its annual forecast after a third quarter better than expected.
On the downside, Sodexo dropped 2.41% after the presentation of its strategic plan for 2025.
CHANGES
The dollar fell 0.18% against a basket of international currencies before the Fed’s decisions and the publication of the survey by private firm ADP on employment in the United States. However, the US currency remains close to its October 25 peak hit on Tuesday.
The euro took the opportunity to rise to 0.9889 dollars (+0.15%).
The pound is trading at $1.15025, up 0.15% against the greenback. The Bank of England will announce its monetary policy decisions on Thursday and a 75 basis point rate hike is expected.
RATE
Bond yields in Europe are practically stable: those of the ten-year and two-year German Bund stand at 2.135% and 1.977% respectively.
In the United States, the yields of ten-year and two-year US Treasury bonds are also treading water, at 4.046% and 4.528% respectively.
OIL
Oil prices are broadly stable pending the Fed. A possible drop in crude inventories in the United States, the upcoming European sanctions against Russia and speculation of an easing of sanitary restrictions in China offer some support, however.
Brent rose 0.05% to 94.70 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.03% to 88.40 dollars.
(Written by Claude Chendjou, edited by Jean-Stéphane Brosse)
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