Wall Street sign outside the New York Stock Exchange
by Laetitia Volga
PARIS (Reuters) – Wall Street is expected to open in disarray on Wednesday, but the European indices did not stop moving up mid-session, buoyed by the publication of solid US statistics that eased fears of a major economic slowdown. The “futures” on New York indices signal a gain of 0.03% for the Dow Jones, a decline of 0.12% for the Standard & Poor’s-500 and 0.28% for the Nasdaq.
The expected decline in tech stocks is expected to weigh on the Nasdaq following a Wall Street Journal report that Washington is considering new restrictions on exports of artificial intelligence (AI) chips to China over security concerns. In pre-market transactions, Advanced Micro Devices and Nvidia lost nearly 4%.
Wall Street ended in the green on Tuesday on a string of data suggesting the US economy was holding up better than expected to the Federal Reserve’s rate hike.
New durable goods orders rose unexpectedly in May, new home sales jumped to their February 2022 high while US consumer confidence hit a near year-and-a-half high in June.
“The U.S. economy continues to defy expectations and it’s a good thing that it’s doing so quietly,” said Jennifer Lee, chief economist at BMO Markets. In Paris, the CAC 40 gained 0.87% to 7,278.54 points around 11:00 GMT. In Frankfurt, the Dax rose by 0.83% and in London, the FTSE by 0.61%.
The pan-European FTSEurofirst 300 index gains 0.63%, the EuroStoxx 50 in the euro zone advances by 0.83% and the Stoxx 600 by 0.64%.
The markets will be attentive to declarations coming from Sintra, in Portugal, where the presidents of the Fed, the European Central Bank (ECB) or even the Bank of England will intervene from 12:30 GMT for the last day of the annual forum. .
WALL STREET VALUES TO FOLLOW
VALUES IN EUROPE
The specter of a restriction on US AI chip exports to China benefits European semiconductor makers: ASML gains 1.09% and STMicroelectronics 1.92%. The Stoxx technology index takes 1.15%.
Carrefour, supported by advice from Morgan Stanley to “overweight”, wins 3.13% and takes the lead in the SBF 120.
RATES After being supported the day before by Christine Lagarde’s “hawkish” tone and better-than-expected US statistics, government bond yields are starting to fall again, especially as the preliminary Italian inflation figures show a slowdown to 6.7% in June, against 8% in May and 6.8% for the consensus.
The yield on the ten-year German Bund, the benchmark for the euro zone, fell to 2.321%.
“The drop in headline inflation and core inflation in Italy in June is encouraging,” said Franziska Palmas, senior economist at Capital Economics. “That said, the ECB is likely to remain in a hawkish mood. Officials … are clearly concerned about the tightening labor market leading to inflation stickiness in the services sector.”
In the United States, the yield on ten-year Treasuries dropped two basis points to 3.7446%.
CHANGES
The dollar is almost stable against a basket of reference currencies and the euro appears at 1.0953 dollars.
The yen is stabilizing after hitting a seven-month low against the dollar and a 15-year low against the euro. Japanese authorities have said they will respond appropriately if the variations become excessive.
OIL
The American Petroleum Institute’s announcement of a sharper-than-expected decline in US crude inventories pushed Brent prices up 0.32% to $72.49 a barrel and US light crude (West Texas Intermediate , WTI) 0.38% to $67.96.
MORE ECONOMIC INDICATOR ON TODAY’S AGENDA
(Laetitia Volga, edited by Blandine Hénault)