PARIS (Reuters) – The main European stock markets are expected to rise on Tuesday after Wall Street closed in positive territory, pending new indications on the health of the global economy and the evolution of American monetary policy.
Futures contracts on indices suggest an increase of 0.29% for the CAC 40 in Paris, 0.18% for the Dax in Frankfurt, 0.31% for the FTSE 100 in London and 0.26% for the EuroStoxx 50.
All ended in the green Monday a hesitant session and on Wall Street, the day ended in a rise while the major indices had opened lower.
Optimism therefore prevails for the moment over the signs of deterioration in the economic situation and over questions about the extent of the rate hikes to come in the United States.
After Monday’s unpleasant surprises in China (industrial production and retail sales below expectations and an unexpected rate cut), US indicators on Monday did little to reassure: the NAHB index of homebuilder confidence fell for the eighth consecutive month, the lowest since 2014, and the “Empire State” activity index fell more than 42 points in one month, suggesting a contraction in the manufacturing sector in the New York area.
But the fall in bond yields was enough to restore momentum to US growth stocks, the engine of the rebound which enabled the Standard & Poor’s 500 index to gain more than 17% in less than two months.
Equities are paradoxically benefiting from speculation on the Federal Reserve’s monetary policy, with economic indicators encouraging some investors to count on a less marked tightening than initially anticipated, or even on a drop in rates as of next year.
In the immediate future, the markets will watch at 09:00 GMT the ZEW index of investor sentiment in Germany, then the results of the American giants of distribution Walmart and Home Depot.
AT WALL STREET
The New York Stock Exchange ended higher on Monday, driven by the rise in growth stocks, as optimism about the Federal Reserve’s ability to ensure a soft landing for the US economy took precedence over concerns over the China.
The Dow Jones Index gained 0.45%, or 151.39 points, to 33,912.44, the Standard & Poor’s 500 gained 16.99 points (+0.39%) to 4,297.14 and the Nasdaq Composite rose. advanced by 80.86 points (+0.62%) to 13,128.05.
Apple (+0.63%) and Microsoft (+0.53%) were among the main contributors to the advance of the S&P 500 and the Nasdaq. Tesla won its side 3.1%.
The S&P 500 “value” (+0.25%) thus underperformed that of growth stocks (+0.55%).
Futures on major indices suggest a slightly lower open for now.
IN ASIA
On the Tokyo Stock Exchange, the Nikkei index closed virtually unchanged (-0.01%) after spending much of the session in the red, as the energy and shipping sectors suffered from concerns for the growth in both China and the United States.
SoftBank also lost 2.56% after a Financial Times article according to which the activist fund Elliott Management sold almost all of its stake.
In China, the Shanghai SSE Composite gained 0.11% while the CSI 300 dropped 0.1%.
EXCHANGES/RATES
The dollar is down slightly against the other major currencies (-0.06%) but remains close to its recent highs, supported by its safe haven status in the context of doubts about the risks of recession.
The euro is trading at $1.016 after hitting a 10-day low at 1.0146.
On the government bond market, US Treasury bond yields widened their losses on Monday, to 2.7878% for the ten-year and 3.1823% for the two-year.
In Europe, the German 10-year rose slightly in early trading, at 0.918%.
OIL
The oil market is deepening its losses, still weighed down by the latest Chinese economic indicators, which have revived fears of a lasting deterioration in global demand for crude.
Brent fell 1.07% to 94.08 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.79% to 88.70 dollars. They have already lost 3.1% and 2.9% respectively on Monday, with WTI returning in session to its lowest level since early February.
(Written by Marc Angrand)
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