by Claude Chendjou
PARIS (Reuters) – Wall Street is expected to fall slightly on Tuesday, while the European stock markets, with the exception of London, are progressing timidly halfway through a session marked by wait-and-see behavior and profit-taking before the publication at the end of the week of the monthly report on American employment, which could influence the decisions of the American Federal Reserve (Fed).
In Paris, the CAC 40 gained 0.39% to 7,361.41 points around 1:00 p.m. GMT and in Frankfurt, the Dax advanced 0.32%. The FTSE fell by 0.54%, penalized by mining stocks, while the London Stock Exchange was briefly affected by a technical incident in the morning on small caps.
The pan-European FTSEurofirst 300 index nibbles 0.02%, the EuroStoxx 50 of the euro zone takes 0.38% and the Stoxx 600 0.15%.
New York index futures signal Wall Street opening down 0.25% for the Dow Jones, 0.36% for the Standard & Poor’s 500 and 0.54% for the Nasdaq.
After a strong series of gains in November which propelled the S&P 500 to its closing high of the year, investors are now more cautious as the week will be marked by numerous economic indicators, including the publication of the report on Friday monthly on job creations, the unemployment rate and wages in the United States.
These data could weigh on the decisions of the Fed which meets on December 12 and 13, even if the monetary markets continue to count with a probability of 61% on a reduction in interest rates from the American central bank in March and with an 87% probability of a reduction in May, according to the CME Group’s Fedwatch barometer.
The outlook for economic growth is also being monitored by market participants, while the ISM services index in the United States will be published at 15:00 GMT.
In the euro zone, the decline in activity was confirmed in November with a composite PMI index coming out at 47.6 compared to 46.5 in October, suggesting a possible contraction of the bloc’s economy this quarter.
In Great Britain, however, activity in the services sector increased in November after three months of decline, but this growth could revive fears about rising prices.
Concerning inflation, a survey by the European Central Bank (ECB) shows that consumer expectations in this area are stable in November. Producer prices in the euro zone, on the other hand, increased in October, by 0.2% over one month, even if they showed a decline of 9.4% over one year.
VALUES TO FOLLOW AT WALL STREET
Take-Two Interactive fell 5.4% in pre-market trading after the presentation of the trailer for the latest part of its video game “Grand Theft Auto VI”, which will be released in 2025.
VALUES IN EUROPE
On the European stock market, the basic resources compartment (-0.82%) is weighing on the trend with the decline in metal prices. In London, Anglo American, Glencore and Rio Tinto fell from 0.56% to 2.9%.
In the news of listed companies, Carmat climbs 32.98% after the announcement of a new production site for its artificial heart which should allow it to achieve its objectives.
Nokia fell by 9.57% and Ericsson jumped by 3.5%, the American telecoms operator AT&T having announced that it had chosen the Swedish group for its ORAN network to the detriment of the Finnish equipment manufacturer.
The banks HSBC and Prudential, exposed to China, fell by 0.49% and 1.82% respectively after the Moody’s agency lowered the outlook for China’s rating from “stable” to “negative” in due to the country’s debt.
RATE
The yield on the ten-year German Bund, a benchmark for the entire euro zone, fell by around six basis points, to 2.29%, with Isabel Schnabel, member of the ECB’s governing council, having judged it “unlikely ” a new rate increase in view of the decline in inflation. The 10-year Bund rate fell during the session to 2.27%, its lowest level since the beginning of June.
In the United States, the yield on ten-year Treasuries also fell by around six basis points, to 4.2279%.
CHANGES
The dollar is stable (+0.06%) against a basket of reference currencies, but it progresses against the euro which stands at 1.0815 dollars (-0.19%) and the pound sterling which is trades at 1.2617 dollars (-0.12%).
The Australian dollar is losing ground (-0.89%) against the American currency, at 0.656, after the decision of the RBA, the central bank of Australia, to opt for the status quo on its rates.
In cryptocurrencies, bitcoin, which ended Monday at its highest since April 2022, above $42,000, dropped 0.22% on Tuesday, to 41,891.
OIL
Oil prices are volatile due to uncertainty surrounding voluntary production cuts by some OPEC+ countries after the latest statements by the Saudi Minister of Energy:
Brent fell 0.05% to $77.99 per barrel and American light crude (West Texas Intermediate, WTI) fell 0.03% to $73.02.
(Writing by Claude Chendjou, edited by Kate Entringer)
Copyright © 2023 Thomson Reuters