Stocks stable pending statements from central bankers


by Claude Chendjou

PARIS (Reuters) – Wall Street is expected to be broadly stable on Tuesday at the opening and European stock markets are moving in small mid-session variations pending statements from several central bankers, including the chairman of the Federal Reserve. American, Jerome Powell. Futures on New York indices signal an opening of Wall Street down 0.07% for the Dow Jones, but an increase of 0.07% for the Standard & Poor’s 500 and 0.28% for the Nasdaq. In Paris, the CAC 40 gained 0.1% to 7,144.24 around 12:35 GMT. In Frankfurt, the Dax, on the other hand, fell by 0.07%. In London, the FTSE advanced by 0.55%, thanks in particular to basic resources (+1.25%), better sector performance in Europe.

The pan-European FTSEurofirst 300 index gained 0.25%, the Eurozone EuroStoxx 50 0.12% and the Stoxx 600 0.24%.

Since the publication of monthly job creation figures in the United States, clearly above expectations, which has called into question the scenario defended by the markets of a soft landing of the economy and a lull in the recovery of the cost of credit, investors are awaiting new reactions from central bankers on the path of interest rates.

“The Fed must first see the beginnings of a lull in both the labor market and inflation to be able to justify a change in rate strategy,” said Russ Mould, chief investment officer at AJ Bell. .

Jerome Powell is due to speak at 5:40 p.m. GMT at an event hosted by the Economic Club of Washington, while statements from three Bank of England (BoE) officials, including its chief economist Huw Pill, and members of the European Central Bank (ECB), including Isabel Schnabel, are also scheduled separately during the day.

At an event organized by several German media, the Governor of the Banque de France, François Villeroy de Galhau, also a member of the ECB, said on Tuesday that there was no need to choose between the fight against inflation and the risk of a recession.

The latest ECB survey, published on Tuesday, shows that consumer inflation expectations in the euro zone were revised slightly upwards in December, a sign that fears in this area are struggling to subside.

In terms of economic indicators of the day, France’s trade deficit widened in 2022 with the energy bill, while in Germany industrial production fell more than expected in December. WALL STREET VALUES TO FOLLOW

Several corporate publications should once again punctuate trading on Wall Street as among the 254 S&P-500 companies that have already released their results, 69.3% have exceeded expectations in terms of quarterly profit, according to Refinitiv data. Analysts, however, still expect a 2.8% decline in earnings for S&P-500 companies year on year in the fourth quarter.

VALUES IN EUROPE In Europe, corporate results are also driving the trend, with BNP Paribas in particular gaining 3.17% after raising its targets for 2025 and announcing a €5 billion share buyback program euros this year. The Stoxx 600 banking index advances by 1.33%.

The British oil group BP, for its part, jumped 5.69% thanks to a record profit of 27.6 billion dollars (25.72 billion euros) in 2022 and a rise of 10% of the dividend paid to shareholders.

On the downside, Danish brewer Carlsberg lost 1.92% after quarterly sales below expectations and Siemens Energy gave up 2.07% after a near doubling of its net loss in the first quarter, while Osram plunged 21.37% to having suspended the payment of the 2022 dividend after results and forecasts deemed disappointing.

RATES Benchmark bond yields continue to rise in anticipation of interest rates that could peak in the United States at 5.1% by July, according to the FedWatch barometer.

The yield on ten-year Treasuries stands at 3.63% and its German equivalent of the same maturity is up around three basis points at 2.31%.

EXCHANGES The dollar paused (+0.04%) against a basket of international currencies but remained well above its recent low of 101.55 points reached on 3 February.

The euro, down 0.26%, is trading at $1.0702.

The Aussie dollar, for its part, gained as much as 1% intraday to US$0.6952 after Australia’s central bank hiked rates by 25 basis points, while hinting that further hikes were to be expected.

OIL

The oil market is being driven by both signs of rising Chinese demand and the shutdown of a major export terminal in Turkey following the powerful earthquakes that hit the country and Syria.

Brent rose 1.37% to 82.1 dollars a barrel and American light crude (West Texas Intermediate, WTI) 1.61% to 75.3 dollars.

NO MORE ECONOMIC INDICATOR ON TODAY’S AGENDA

(Written by Claude Chendjou, edited by Kate Entringer)

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