by Claude Chendjou
PARIS (Reuters) – Wall Street is expected to fall slightly at the opening on Friday, while European stocks rebound slightly mid-session from a three-month low before the publication of the official monthly US employment report.
Futures on New York indices signal an opening on Wall Street down 0.04% for the Dow Jones, 0.08% for the Standard & Poor’s 500 and 0.17% for the Nasdaq.
In Paris, the CAC 40 advances by 0.55% to 7,121.27 points around 11:40 GMT. In Frankfurt, the Dax takes 0.56%. In London, however, the FTSE fell by 0.19%, penalized mainly by “utilities”.
The pan-European FTSEurofirst 300 index gained 0.16% and the eurozone’s EuroStoxx 50 0.41%. The Stoxx 600 gained 0.17% after losing 0.3% at the start of the session, posting its worst weekly performance since March in mid-March.
Over the week as a whole, the CAC 40 lost 3.78% at this stage and the Stoxx 600 3.03%.
The equity markets, which were heckled on Thursday by the ADP survey on American employment showing job creations almost twice as high as expected, are undecided on Friday, alternating one foot in the red, another in green, on bargain purchases.
However, the underlying trend remains one of caution as the US Department of Labor is due to publish its official employment report for the month of June at 12:30 GMT. The Reuters consensus forecasts a slowdown in job creations to 225,000, an unemployment rate reduced from 3.7% to 3.6% and a deceleration in the increase in the average hourly wage to 4.2% over one year.
“One thing is certain: given yesterday’s movements, a slight upside surprise (in employment) is already priced into (stock) prices,” said Julien Lafargue, chief market strategist at Barclays Private Bank. .
“If the NFP (the non-farm payroll report) sends a similar message to the ADP, the market will gain confidence that the anticipated recession is pushed back and the Fed may need to be more aggressive.” , he added.
CME Group’s Fedwatch Barometer sees Fed rates hitting at least 5.25%-5.5% this year, despite the pause decided in June, while a cut is not expected before 2024.
In the eurozone, European Central Bank (ECB) Vice-President Luis de Guindos said on Friday that underlying inflationary pressures were starting to ease but that the central bank’s work was not yet not finished. Money markets are anticipating another rate hike from the ECB this month and another in September.
WALL STREET VALUES TO FOLLOW
Tesla fell 0.7% in pre-market after the announcement of a further drop in the price of its electric vehicles in China.
Alibaba took 2.6% ahead of the stock market, sources having reported that the Chinese authorities could announce this Friday the end of the investigation into its payment subsidiary Ant Group.
Levi Strauss fell 8.2% after lowering its annual profit forecast.
VALUES IN EUROPE
The rebound in Europe was led by Basic Resources (+1.13%) and Chemicals (+1.29%), while Utilities (-0.73%) and Media (-0.89 %) show the largest declines.
In the news of listed companies, SES Imagotag shares climbed nearly 40% on the Paris Stock Exchange after a new report from Gotham City, deemed less negative than feared, according to analysts.
Elsewhere in Europe, Clariant jumped 4.61% after the publication of its quarterly results and annual outlook, while Just Eat Takeaway lost 3.35% on a lowering of the Exane board to “neutral”.
CHANGES
The dollar is virtually stable (-0.11%) on Friday ahead of US employment.
The euro is displayed at 1.0893 dollars (+0.06%).
The pound is trading at $1.2768 (+0.22%) after hitting a two-week high of $1.278 on Thursday as markets believe the Bank of England will need to raise interest rates to 6.5% at the start of next year, compared to a previous forecast of 6.25%.
RATE
Bond yields in Europe remain Friday close to their March peak reached the day before on expectations of rate hikes.
The ten-year German Bund yield takes about a basis point, to 2.635%.
In the United States, that of Treasury bills of the same maturity is up by about two points, at 4.0596%.
OIL
Oil market heads for second straight week of gains, amid resilient demand despite rising interest rates: Brent rises 0.43% to $76.85 a barrel and light crude American (West Texas Intermediate, WTI) from 0.54% to 72.19 dollars.
(Written by Claude Chendjou, edited by Kate Entringer)
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