PARIS (Reuters) – Wall Street is expected to be mixed at the opening on Friday, while European stock markets are progressing at mid-session, with markets welcoming a burst of encouraging data for the trajectory of rates published this week.
Futures on New York indices suggest a hesitant opening on Wall Street, with the Dow Jones gaining 0.26%, while the Standard & Poor’s 500 takes 0.24% and the Nasdaq does not show any clear direction.
In Paris, the CAC 40 advanced 0.89% to 7,231.93 points around 12:14 GMT, compared to 0.82% for the FTSE in London, and 0.84% for the Dax in Frankfurt.
The pan-European FTSEurofirst 300 index gained 0.87%, compared to 0.81% for the EuroStoxx 50 and 0.94% for the Stoxx 600.
Numerous indicators published this week in the United States, Great Britain and, to a lesser extent, in the euro zone, have reassured the markets in the perspective of the end of a rise in central bank rates.
Across the Atlantic, inflation, published on Tuesday, was lower than expected by the consensus, growing by 3.2% over one year compared to 3.3% expected. Activity is also slowing down, after having been resilient, supported by consumers and the volumes of accumulated savings.
However, retail sales showed a decline, like industrial production and imports, an indication that the economy is finally cooling under the effect of rate increases by the Federal Reserve.
Finally, jobless claims, the Empire State indicator, and the Philly Fed indicator all showed softening in labor markets, one of the main drivers of inflation in recent months, providing further relief more investors.
All these elements give investors hope that the American central bank has reached its peak of interest rates, and that it will be forced to ease them before the economy sinks too deeply into recession.
In the United Kingdom, wages slowed more than expected in October, according to data released on Tuesday, while inflation also fell.
Euro zone inflation was confirmed at 2.9% year-on-year in October, while the European Commission on Wednesday lowered its outlook for the bloc’s growth in 2023 – but estimates it will rebound in 2024.
VALUES TO FOLLOW IN WALL STREET
Gap on Thursday reported adjusted earnings of 59 cents per share, compared to estimates of 19 cents, and net sales of $3.78 billion, compared to consensus of $3.60 billion.
Semiconductor equipment maker Applied Materials is under U.S. criminal investigation for potentially evading export restrictions imposed on Chinese chipmaker SMIC.
VALUES TO FOLLOW IN EUROPE
Eiffage advances by 4.01%, after announcing on Thursday that it had signed a contract worth more than 4 billion euros with EDF to carry out the civil engineering work for the first two EPR2 type reactors at Penly.
Volvo Cars fell 10.7% to a historic low, after the decision of its parent company, Geely, to sell shares in the car manufacturer at a steep discount.
The health sector rose by 1.22%, with Novo Nordisk and Sanofi gaining 2.39% and 1.24% respectively.
RATE
Yields are falling, after the activity indicators published this week which made the markets hope for a faster than expected drop in key rates.
The ten-year Treasury yield fell 3.3 bps to 4.4121%, while the two-year fell 2.2 bps to 4.8197%, and could post their best weekly performance since March.
The German ten-year yield fell by 3.2 bp to 2.556%, that of the two-year rate fell by 3 bp to 2.92%.
CHANGES
The dollar is falling as markets reassess the Fed’s monetary policy path.
The dollar fell 0.19% against a basket of reference currencies, the euro gained 0.13% to 1.0864 dollars and the pound sterling gained 0.19% to 1.2429 dollars.
OIL
Crude is recovering after a selling movement considered excessive on Thursday, but is nevertheless heading towards its fourth weekly loss in a row.
Brent nibbles 1.5% to $78.58 per barrel, American light crude (West Texas Intermediate, WTI) rises 1.39% to $73.91.
MORE MAJOR ECONOMIC INDICATORS ON THE AGENDA FOR NOVEMBER 17
(Written by Corentin Chappron, edited by Jean-Stéphane Brosse)
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