by Claude Chendjou
PARIS (Reuters) – Wall Street is expected to see slight variations on Friday before the publication of American employment figures, while the European stock markets are up cautiously at mid-session thanks in particular to the luxury sector. New York index futures signal a stable opening on Wall Street for the Dow Jones (+0.03%) and the Standard & Poor’s 500 (-0.04%), while the Nasdaq could fall by 0.19 % on profit taking. In Paris, the CAC 40 advanced 0.77% to 7,485.66 around 11:40 GMT. In Frankfurt, the Dax gained 0.23% and in London, the FTSE increased by 0.34%.
The pan-European FTSEurofirst 300 index gained 0.48%, the EuroStoxx 50 of the euro zone 0.53% and the Stoxx 600 0.39%.
Over the week as a whole, the CAC 40 gained 1.90% at this stage and the Stoxx 600 0.96%, the fourth week in a row of increases.
Since the start of the year, the flagship pan-European index has gained almost 11%, with a gain of around 20% for the German Dax, while the S&P-500 has jumped over the same period by 19%.
Equity markets have generally been in euphoria since November with the prospect of a rapid rate cut by the major central banks which are meeting next week.
This hope is fueled by data which shows a slowdown in the economy, without recession, and an ebbing of tensions in the labor market.
The US Department of Labor will release its monthly employment report at 1:30 p.m. GMT. The Reuters consensus forecasts an increase in job creation to 180,000, but a stable unemployment rate at 3.9% and a deceleration in wage growth to 4.0% over one year.
Before this report, the indicators published during the week, namely weekly unemployment registrations, the ADP survey on private employment and job offers from the Jolts survey, all showed an easing on the market of American labor.
Money markets are currently pricing in a 140 basis point cut in European Central Bank (ECB) rates and a 120 bps cut in US Federal Reserve (Fed) rates by the end of 2024.
VALUES TO FOLLOW AT WALL STREET
Broadcom fell 1.1% in pre-market trading, as the semiconductor manufacturer published quarterly revenue below expectations in a context of intensifying competition.
Qualcomm lost 1.3% in pre-market trading after Morgan Stanley lowered its advice from “overweight” to “line weighting”.
VALUES IN EUROPE
The luxury sector on the Stoxx 600, up 1.7%, supports the positive trend in Europe, with the yield on the ten-year German Bund, benchmark for the euro zone, being on track to record its biggest drop (-44 basis points) over two weeks since mid-March.
In Paris, LVMH and Hermès gained 2.20% and 1.09% respectively, while the Swiss Richemont took 1.73% and the Italian groups Salvatore Ferragamo and Moncler respectively 3.47% and 2.48%.
The announcement of the return of Vivendi (+2.53%) to the CAC 40 to replace Worldline (+0.06%) is welcomed by the market.
Sainsbury, for its part, is benefiting from the raising of Goldman Sachs’ advice from “neutral” to “buy”.
On the downside, Anglo American plunged 8.092%, the mining group having reduced its production target for 2024 and announced its intention to reduce its investment spending by $1.8 billion by 2026.
RATE The yield on the ten-year German Bund rose by around four basis points, to 2.243%, after having touched 2.166% during the session the day before, the lowest since April 6.
Its American equivalent of the same maturity is displayed at 4.1835%, up about five points, against a 16-year high reached on October 23, at 5.021%.
EXCHANGES The dollar rose 0.22% against a basket of reference currencies and is heading towards a gain over the whole week after three consecutive weekly declines.
The euro is trading at $1.078 (-0.11%) and the pound sterling at $1.258 (-0.08%). Over the week as a whole, the European currency is expected to contract by around 0.9% and the British currency by around 1%.
OIL
Oil prices are up on Friday but are expected to show their seventh consecutive weekly decline over the whole week due to fears of excess supply combined with weak Chinese demand.
The market was driven on Friday by Russia and Saudi Arabia who called on OPEC+ member countries to reduce their production.
Brent rose 2% to $75.53 per barrel and American light crude (West Texas Intermediate, WTI) rose 1.99% to $70.72.
(Writing by Claude Chendjou, edited by Kate Entringer)
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