by Claude Chendjou
PARIS (Reuters) – Wall Street is expected to be almost stable on Monday and European stock markets show slight variations mid-session at the start of a week which will be marked by new monetary policy decisions in the wake of the European Central Bank (ECB).
New York index futures signal a virtually unchanged opening for the Dow Jones (-0.01%) and the Standard & Poor’s 500 (+0.09%), while the Nasdaq should rebound by 0.26% after a Wall Street closed Friday in disorganized order where Intel (11.9%) weighed on technology stocks following a warning on its forecasts.
In Paris, the CAC 40 lost 0.04% to 7,631.05 points around 12:40 GMT after a euphoric session on Friday, driven in particular by luxury following the results of LVMH. In Frankfurt, the Dax dropped 0.51%, weighed down in particular by Bayer. In London, the FTSE gained 0.14%.
The pan-European FTSEurofirst 300 index gained 0.11%, while the eurozone’s EuroStoxx 50 fell 0.16%. The Stoxx 600, which hit a two-year high on Friday and achieved its best weekly performance in three months, is stable.
The day’s positive trend in Europe is supported by energy (+1.33%) which benefits from tensions in the Middle East, while finance (-0.28%) limits the potential gain.
However, the market remains fundamentally in a wait-and-see position while technological behemoths (Microsoft, Alphabet, Apple, Meta Platforms, Qualcomm and even Amazon) and oil and industrial giants (Exxon Mobil, Chevron, Merck, Pfizer or Boeing) must publish their quarterly accounts starting Tuesday.
In Europe, pharmaceutical giant Novo Nordisk and several banks, including BNP Paribas, are due to publish their results this week. Goldman Sachs lowered its forecast for earnings growth for Stoxx 600 companies from 7% to 3% for this year, citing headwinds from falling oil prices and inflation.
Investors are also awaiting decisions from the US Federal Reserve (Fed), which meets for two days on Tuesday, while the Bank of England (BoE) must communicate its monetary policy announcements on Thursday after the ECB which decided last week to observe a new status quo on its key rates.
VALUES IN EUROPE
Eutelsat fell by 13.68% after lowering its annual outlook, taking the SES satellite group in its wake (-4.17%).
Philips lost 7.01% after the announcement of an agreement with the FDA, the American health authority, concerning the ban in the United States on the sale of new respiratory devices.
Ryanair, which revised its annual profit forecast downwards after the withdrawal of its flights from certain online sites, dropped 0.53%, while the transport and leisure index fell by 0.06%.
Bayer plunges 5.79%, the German chemical and pharmaceutical group having been ordered to pay $2.25 billion in a lawsuit linked to Roundup.
On the upside, Holcim gained 4.11%, the Swiss construction giant having announced its intention to split its activities in North America and list them on the New York Stock Exchange.
RATE
The yield on the ten-year German Bund, benchmark for the entire euro zone, fell by more than five basis points, to 2.246% while the markets are counting on a reduction in ECB rates of 150 basis points this year, including a first reduction of 25 points from April.
Several ECB officials also suggested on Monday that the institution’s next major decision would be a reduction in its key rates, without however specifying the exact timetable for this measure.
The yield on ten-year Treasuries also fell by more than five basis points, to 4.1046%, continuing to benefit from Friday’s publication of the basic PCE inflation index in the United States (+2.9% on one year), which posted its lowest increase in December since March 2021.
CHANGES
The dollar is stable (-0.03%) against a basket of reference currencies, pending economic data expected this week. The index measuring the banknote’s fluctuations is close to a six-week peak hit last week.
The euro stands at 1.0833 dollars, down 0.18%.
The pound sterling is trading at $1.2708 (+0.08%).
OIL
Oil prices were in the green on Monday as a deadly drone attack on US forces in Jordan heightened concerns over supply risks in the Middle East, while Yemen’s Houthi rebels stepped up their attacks in the Red Sea.
Brent gained 0.02% to $83.57 per barrel, American light crude (West Texas Intermediate, WTI) gained 0.04% to $78.04.
(Writing by Claude Chendjou, edited by Kate Entringer)
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