by CORENTIN CHAPRON
PARIS (Reuters) – Wall Street is expected to be hesitant at the opening on Friday, while European stock markets advance at mid-session after activity indicators showing signs of improvement in November and inflation falling on both sides of the Atlantic.
Futures on New York indices suggest a mixed opening on Wall Street, with the Dow Jones gaining 0.13%, while the Standard & Poor’s 500 and the Nasdaq are hesitant.
In Paris, the CAC 40 advanced 0.36% to 7,336.87 points around 11:41 GMT, compared to an increase of 0.69% for the FTSE in London and 0.7% for the Dax in Frankfurt.
The pan-European FTSEurofirst 300 index gained 0.52%, compared to a gain of 0.64% for the EuroStoxx 50 and 0.39% for the Stoxx 600.
The final PMI activity indicators for the euro zone and Britain were published on Friday, and were revised slightly higher than the first estimates, indicating that the contraction in activity was less marked than expected in November .
Furthermore, inflation in the euro zone fell more sharply than expected by the consensus on Thursday, while PCE inflation in the United States also showed a decline.
This removes the risks of a further rise in central bank rates in December, and pushes markets to bet that monetary policies will be eased more quickly than the European Central Bank (ECB) and the Federal Reserve admit.
“Markets are celebrating the stronger-than-expected slowdown in inflation in the Eurozone and the United States since the end of summer, while at the same time economic growth is not collapsing,” write the strategists of LBPAM, who estimate that the slowdown in inflation in the euro zone will allow price dynamics to reach the 2% target in the second part of 2024, a year before the ECB’s projections.
Markets await the ISM manufacturing in the United States on Friday at 3:00 p.m. GMT, as well as comments from Fed Chairman Jerome Powell at 4:00 p.m. GMT and 7:00 p.m. GMT.
The “blackout” period, during which American monetary policy makers are prohibited from speaking, and which precedes the Fed’s next monetary policy meeting, begins on Saturday.
VALUES TO FOLLOW IN EUROPE
Societe Generale fell 0.89% after Goldman Sachs lowered its recommendation to “sell” and the announcement of an increase in its capital requirements by the European Central Bank (ECB).
Casino lost 6.38% after confirmation on Thursday by the distributor of the receipt of several offers for its hypermarkets and supermarkets in France.
Worldline soars 6.08%, Bloomberg reporting that Crédit Agricole is considering taking a stake in the payments group.
Viaplay plunges 73.82% as the Swedish streaming group announced plans to raise new capital and restructure its debt as part of a rescue plan.
Anglo American jumped 6.91%, among the best performances of the Stoxx 600, after UBS raised its recommendation from “neutral” to “buy”.
RATE
European yields are declining, in the wake of better-than-expected inflation data and Eurozone PMI indicators showing slight improvement.
The German ten-year yield lost 1 basis point (bp) to 2.439%, that of the two-year rate fell by 3.2 bp to 2.784%.
The ten-year Treasury yield is stable at 4.3417%, while the two-year yield drops 3 bp to 4.6854%.
CHANGES
The upward revision of the British PMI indicator supports the pound, which advances against a sluggish dollar before Powell’s comments.
The dollar fell 0.11% against a basket of reference currencies, the euro remained at 1.0884 dollars, and the pound sterling gained 0.15% to 1.2641 dollars.
OIL
Crude is hesitating after declining on Thursday, following an OPEC+ meeting that concluded without a joint press release.
Brent is stationary at $80.86 per barrel, American light crude (West Texas Intermediate, WTI) is standing still at $75.98.
(Written by Corentin Chappron, edited by Blandine Hénault)
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