by Claude Chendjou
PARIS (Reuters) – The main European stock markets are expected to be on a positive note on Friday at the start of December, continuing with the previous month, with investors continuing to count on a rate cut by the major central banks next year after the latest reassuring figures on the ebb of inflationary pressures in the euro zone and the United States.
According to the first available indications, the Parisian CAC 40, which gained 6.17% over the whole month of November, should increase by 0.26% at the opening on Friday. The Dax in Frankfurt could advance by 0.36% and the FTSE 100 in London by 0.54%. The EuroStoxx 50 index is expected to increase by 0.41% while the Stoxx 600 recorded (+6.41%) in November, its best month since January.
Data published Thursday by Eurostat showed that the slowdown in inflation in the euro zone over one year increased in November, to 2.4%, after +2.9% in October, while in the United States The PCE price index, the preferred indicator of inflation by the American Federal Reserve, remained unchanged in October over one month after increasing by 0.4% in September.
This supports market expectations, which are betting that the Fed is done with rate hikes and that it will begin to ease them quickly, with a first cut of 25 basis points being planned for May, or even March, according to the Fedwatch barometer. of CME Group.
On the economic side, the markets are forecasting a soft landing for the American economy, while the risk of a recession in the euro zone is receding. The figures for manufacturing indices on both sides of the Atlantic expected this Friday will help confirm or not this hope, less than two weeks before the meetings of the European Central Bank (ECB), the Bank of England (BoE) and the Fed.
Before that, Fed Chairman Jerome Powell is expected to speak from 16:00 GMT.
A WALL STREET
The New York Stock Exchange ended mixed on Thursday, with the Nasdaq in the red but the Dow Jones at its highest level since January 2022, as Fed officials tried to temper market optimism on rates .
The Dow Jones index gained 1.47%, or 520.47 points, to 35,950.89 points.
The broader S&P-500 gained 17.22 points, or 0.38%, to 4,567.80 points.
The Nasdaq Composite, on the other hand, lost 32.27 points (-0.23%) to 14,226.22 points.
Over the entire month of November, the Nasdaq posted the strongest increase of the three New York indices (nearly +11%), its best monthly performance since the summer of 2022. The Dow Jones and the S&P-500 taken around 9%.
Inflation indicators have reinforced market expectations, which are betting that the American central bank will begin to quickly ease its rates, but the President of the New York Fed, John Williams, did not rule out a further rate hike on Thursday if inflation rebounds.
In terms of values, Ford lost 3.1% after estimating the cost of its new social agreement in the United States at $8.8 billion and lowering its profit forecasts for the whole year.
The pharmaceutical laboratory Immunogen soared 82.6% after the announcement of its takeover, for $10.1 billion, by Abbvie (+2.8%).
IN ASIA
On the Tokyo Stock Exchange, the Nikkei index, which gained 8.5% in November, begins the last month of the year practically stable. It fell by 0.17%, to 33,431.51 points, while the broader Topix held up more, gaining 0.32%, to 2,382.52 points.
“We have the feeling that a lot of the good news is already priced in. A bit of profit taking and rebalancing probably played a role,” comments Rodrigo Catril, currency strategist at National Australia Bank.
In today’s Japanese indicators, manufacturing activity contracted in November (index at 48.3) at a faster pace than in October due to a fall in orders, while the unemployment rate fell slightly to 2.5% in October after 2.6% the previous month.
The MSCI index bringing together stocks from Asia and the Pacific (excluding Japan) lost 0.40% after gaining 7.3% over the whole month of November, its best monthly performance since January.
In China, the Shanghai SSE Composite gained 0.06%, but the CSI 300 lost 0.38%.
The Caixin Manufacturing PMI in China shows that activity grew against expectations in November, to 50.7, with new orders coming out at their fastest pace since June.
EXCHANGES/RATES
The dollar, which lost 3% over the whole month of November, its biggest drop in a year, lost another 0.08% against a basket of reference currencies.
The euro advanced by 0.16%, to $1.0903 after a decline of 0.7% the day before, while the pound sterling stood at $1.2638 (+0.13%).
On the bond market, the yield on ten-year US Treasury bonds fell by around 2.5 basis points, to 4.3262%, after a decline of 52.2 points over the entire month of November.
The yield on the German Bund is virtually unchanged, at 2.45% after a decline of 34 basis points over the month of November, the strongest on a monthly basis since July 2022.
OIL
The oil market is in slight decline, the OPEC+ meeting having concluded without a joint decision on production reductions: Brent fell by 0.32% to 80.60 dollars per barrel and American light crude (West Texas Intermediate, WTI) by 0.17% to $75.83.
(Writing by Claude Chendjou, editing by Zhifan Liu and Kate Entringer)
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