EQUITIES CONTINUE TO REBOUND AFTER THE FED
by Claude Chendjou
PARIS (Reuters) – Wall Street is expected to rise on Thursday and European stock markets except for London are moving in the green mid-session the day after the rebound in equity markets, which seemed reassured by the unsurprising report of the last monetary policy meeting of the US Federal Reserve (Fed). Futures on New York indices signal an opening on Wall Street up 0.61% for the Dow Jones, 0.76% for the Standard & Poor’s 500 and 0.58% for the Nasdaq. In Paris, the CAC 40 took 0.84% to 6,351.78 around 11:20 GMT. In Frankfurt, the Dax advances by 0.81%. But in London, the FTSE lost 0.02%, penalized by mining stocks down 0.4%.
The pan-European FTSEurofirst 300 index advanced by 0.22%, the EuroStoxx 50 of the euro zone by 0.78% and the Stoxx 600 by 0.38%.
The “minutes” of the Fed’s May meeting, which decided on a half-point interest rate hike, indicate that the majority of U.S. central bank officials deemed it “likely appropriate “Further increases in the cost of credit in June and July in the face of galloping inflation.
“Investors seem to have been reassured that (Fed) minutes did not point to an even more aggressive course of monetary tightening despite (inflation) remaining at elevated levels,” said macroeconomist Stuart Cole. at Equiti Capital.
The prospect of a sharp rate hike that could push the economy into recession was feared by some investors, but according to Paul Donovan, chief economist at UBS Global Wealth Management, the Fed’s minutes suggest that “a a slower pace of tightening seems the most likely route.”
The second estimate of US gross domestic product (GDP) for the first quarter will be released at 12:30 GMT and the Reuters consensus is for a contraction of 1.3% after a first estimate showed a surprise drop of 1.4%. on an annualized basis.
In Europe, where inflation is also moving to record levels as activity shows signs of slowing according to the first results of S&P Global’s PMI surveys for the month of May, the President of the European Central Bank, Christine Lagarde, also said this week that rates would move back into positive territory by the end of September.
WALL STREET VALUES TO FOLLOW
The American manufacturer of semiconductors Broadcom, takes 1.5% in pre-market after the announcement Thursday of the acquisition of the service provider in cloud computing VMware for 61 billion dollars (56.9 billion euros).
Nvidia, for its part, fell 6.1% in pre-market after the publication on Wednesday of a quarterly sales forecast below expectations.
VALUES IN EUROPE
In Europe, where trading is limited on Thursday due to Ascension, most of the main sectors of the Stoxx 600 are moving in the green, energy (+1.52%) and cyclical consumption (+0.91%). ) displaying among the best performers. On the other hand, the defensive compartment of real estate (-0.57%) shows the biggest drop.
TotalEnergies takes 1.2%, while in the luxury sector LVMH, Hermès and Kering advance from 1.6% to 2.1%.
In corporate news, steel tube maker Vallourec, down 9.5%, suffered from a stock placement by several investors at a 12.5% discount to its closing price of Wednesday.
Semiconductor specialist STMicroelectronics suffered from Nvidia’s outlook and lost 1.3%, while BE Semiconductor and ASM International were also in the red.
Elsewhere in Europe, the telecom operator BT, which announced Thursday that the British government would launch an investigation into the participation of Patrick Drahi, the founder of Altice, in its capital, gave up 3.7%.
RATE
Bond yields in Europe are falling slightly as the prospect of a 50 basis point European Central Bank rate hike in July seems to be receding. Several ECB officials, including Klaas Knot, president of the Dutch central bank, and Olli Rehn, member of the Governing Council, said on Wednesday that they supported the strategy of a gradual increase in rates mentioned by Christine Lagarde, the president of the ECB.
“We expect the ECB to raise rates by 25 basis points at the July meeting,” Unicredit analysts wrote in a note.
The yield on the ten-year German Bund, which fell in the session as much as six basis points to 0.893%, its lowest level since May 13, cut its losses to 0.935%.
In the United States, the yield of ten-year Tresuries, which hit a three-and-a-half-year high in early May, fell slightly to 2.7380%.
FOREIGN EXCHANGES The dollar fell 0.26% against a basket of benchmark currencies, with the Fed minutes presenting no surprises. The dollar index is nearing the one-month low hit on Tuesday.
The euro for its part advanced 0.31% to 1.0715 dollars.
OIL
The oil market is once again supported by fears over supply in the run-up to a European embargo on Russian hydrocarbons.
The barrel of Brent rose 0.74% to 114.90 dollars a barrel and that of American light crude (West Texas Intermediate, WTI) 1.02% to 111.35 dollars.
MAIN ECONOMIC INDICATORS ON THE AGENDA FOR MAY 26
COUNTRY GMT INDICATOR PERIOD PREVIOUS CONSENSUS
USA 12:30 p.m. GDP (2nd estimate) Q1 -1.3% -1.4%*
USA 12:30 p.m. Unemployment claims week at 215,000 218,000
May 21st
* first estimate
THE MARKET SITUATION
WALL STREET
Indices Last Var. Var. %
points
Dow Jones 32288.00 +212.00 +0.66%
S&P-500 4006.50 +29.75 +0.75%
Nasdaq-100 12008.50 +66.25 +0.55%
“The Day Ahead” – Update on the
next session on Wall Street
[DAY/US]
The session
former :
Closing Indices Var. Var. %YTD
points
Dow Jones 32120.28 +191.66 +0.60% -11.61%
S&P-500 3978.73 +37.25 +0.95% -16.52%
Nasdaq 11434.74 +170.29 +1.51% -26.91%
Nasdaq 100 11943.93 +174.09 +1.48% -26.81%
MARKETS
EUROPEANS
Indices Last Var. Var. %YTD
points
Eurofirst 300 1,707.64 +4.67 +0.27% -9.66%
Eurostoxx 50 3,707.72 +30.62 +0.83% -13.74%
CAC 40 6,353.95 +55.31 +0.88% -11.17%
Dax 30 14,137.03 +129.10 +0.92% -11.00%
FTSE 7526.34 +3.59 +0.05% +1.92%
SMI 11491.80 +8.24 +0.07% -10.75%
The values to follow
Paris and Europe:
[WATCH/LFR]
CHANGES
Standby Price Var.% YTD
Euro/Dlr 1.0709 1.0680 +0.27% -5.80%
DLR/Yen 127.04 127.31 -0.21% +10.43%
Euro/Yen 136.07 135.92 +0.11% +4.41%
Dlr/CHF 0.9603 0.9615 -0.12% +5.26%
Euro/CHF 1.0283 1.0271 +0.12% -0.83%
Stg/Dlr 1.2607 1.2564 +0.34% -6.82%
Index $ 101.8490 102.0560 -0.20% +5.90%
RATE
Last Var. Spread/B
and
(pts)
Future Bunds 153.5300 -0.3900
10-year bunds 0.9800 +0.0330
2-year Bunds 0.3210 -0.0100
10-year OAT 1.5000 +0.0180 +52.00
Treasury 10 2.7649 +0.0180
years
Treasury 2 years 2.4798 -0.0220
OIL
(in dollars) Previous Price Var Var. %YTD
you
US light crude 111.23 110.33 +0.90 +0.82% +81.72%
Brent 114.84 114.03 +0.81 +0.71% +73.92%
(Some data may show a slight shift)
(Report Claude Chendjou, edited by)