NERVOUSNESS SHOULD DOMINATE BEFORE AN EXTREMELY BUSY WEEK
by Laetitia Volga
PARIS (Reuters) – The main European stock markets are expected to fall on Monday at the opening, the fears of recession should again prevail before the key economic and monetary appointments of the days to come, starting with the meeting of the US Federal Reserve (Fed).
Futures contracts suggest a decline of 0.48% for the Paris CAC 40, 0.72% for the Dax in Frankfurt, 0.36% for the FTSE in London and 0.64% for the EuroStoxx 50 .
The Fed wraps up its two-day meeting on Wednesday and markets are widely expecting another 75 basis point rate hike, with only about a 9% chance of a one percentage point hike.
“There is additional downside risk to risky assets as recession fears mount and central banks remain committed to fighting inflation at the expense of growth,” Standard Chartered strategists said in a statement. note.
The week will also be driven by the first figures for US GDP in the second quarter, expected to rise by 0.4% by the Reuters consensus after a contraction of 1.6% over the January-March period. In the meantime, investors will be watching at 08:00 GMT the Ifo business climate index in Germany.
The week is the busiest in terms of corporate results and observers will be attentive to the impact of the strong dollar on the major American groups. Among the expected publications, those of Meta, Alphabet, Apple, or even Pfizer and Boeing will be very popular.
In Europe, Volkswagen, Nestlé, Deutsche Bank are expected as well as Airbus, TotalEnergies, LVMH and BNP Paribas in Paris.
AT WALL STREET
The New York Stock Exchange ended lower on Friday as disappointing results from Snap weighed on other social media and tech companies.
The Dow Jones index fell 0.43% to 31,899.29 points, the broader S&P-500 lost 0.93% to 3,961.63 points and the Nasdaq Composite fell 1.87% to 11,834, 11 stitches.
Snap, owner of the Snapchat app, fell nearly 40% to $9.96, its lowest level since March 2020, after posting the weakest quarterly revenue growth since going public.
Other companies heavily dependent on advertising, such as tech giants Meta Platforms and Alphabet, fell 7.6% and 5.6% respectively.
Among the eleven main sectors of the S&P-500, those of communication services (-4.3%) and technology (-1.4%) suffered the largest declines.
Futures are signaling a decline of around 0.2% at the open.
IN ASIA
After seven sessions of gains in a row, the Nikkei on the Tokyo Stock Exchange fell 0.77%, penalized by the heavyweights of the technology sector in the wake of Wall Street.
Concerns over COVID-19 and the struggling real estate sector are weighing on Chinese markets: the Shanghai Stock Exchange composite index fell 0.57% and the mainland China large-cap CSI 300 0.6%.
EXCHANGES/RATES
The dollar is stable against other major values (-0.02%) and the euro is trading at 1.0196 dollars
On the bond side, the ten-year American is up slightly to 2.7977%.
It fell Friday in session to its lowest level in two months, at 2.732%, after the contraction, for the first time since June 2020, of the PMI composite and services indices, according to the preliminary results of the S&P survey.
In early trade, the German 10-year Bund yield rallied around 4.5 basis points to 1.065% after falling on Friday on recessionary fears fueled by European PMI indices below expectations.
OIL
Oil is down on concerns that a further rise in US interest rates could limit demand for crude.
Brent lost 0.59% to 102.59 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.78% to 93.96 dollars.
(edited by Kate Entringer)