by Claude Chendjou
PARIS (Reuters) – Wall Street is expected to see no big change at the opening on Wednesday and the European stock markets, apart from Paris, are slightly in the green at mid-session, the context being mainly one of wait-and-see before the publication of a new inflation indicator in the United States.
New York index futures signal Wall Street opening up 0.04% for the Dow Jones and 0.05% for the Standard & Poor’s 500 but down 0.01% for the Nasdaq.
In Paris, the CAC 40 fell by 0.16% to 8,212.76 points around 10:10 GMT, penalized by the luxury sector in the wake of Burberry’s results. In Frankfurt, the Dax advances by 0.48% and in London, the FTSE gains 0.24%.
The pan-European FTSEurofirst 300 index rose by 0.27% and the eurozone’s EuroStoxx 50 by 0.03%. The Stoxx 600 advanced 0.30% after setting a record 523.81 points during the session.
The good mood of investors in Europe is fueled by the results of companies which have notably enabled the Stoxx 600 to gain more than 9% since the start of the year, compared to a jump of almost 10% for the S&P 500 index.
Among Stoxx 600 companies that reported first-quarter results, 60.7% beat expectations, compared to a historical average of 54%, according to LSEG data.
Monetary policy and expectations about the trajectory of rates, however, remain the main concerns of the markets. The latter will take note at 12:30 p.m. GMT of several economic indicators in the United States, including retail sales, the Empire State activity index and especially monthly data on consumer prices (CPI) the day after the publication of producer price figures (PPI).
The PPI posted a surprise month-on-month resurgence of 0.5% in April, but US Federal Reserve (Fed) Chairman Jerome Powell said the statistic did not reflect “overheating”. ” and that he still expected inflation to ease this year.
For the CPI, the Reuters consensus forecasts stagnation at 0.4% month-on-month in April and a slowdown to 3.4% year-on-year.
VALUES IN EUROPE
Carrefour fell 3.95%, penalized by the lowering of JPMorgan’s recommendation to “underweight” from “neutral”.
Trigano fell 7.89%, with analysts deeming the motorhome manufacturer’s cash generation “disappointing”.
CGG soars 18.94% after a 30% jump in turnover from its activities in the first quarter.
Burberry loses 4.12% as the luxury group reports a 34% drop in annual operating profit
Thyssenkrupp drops 2.39% after a further lowering of its annual forecasts.
Merck KGaA rose 3.95% after better than expected adjusted profit.
Commerzbank gained 5.51%, as the bank recorded its highest quarterly profit in ten years, above expectations.
ABN Amro declines 3.95% due to a drop in its capital ratio in the first quarter, overshadowing a better-than-expected net profit.
The Finnish biofuels group Neste plunged 13.21%, at the bottom of the Stoxx 600, after lowering its margin outlook for 2024 on renewable products.
RATE
The yield on ten-year US Treasury bonds fell by around three basis points, to 4.4198%, before the publication of consumer prices in the United States.
That of the German Bund of the same maturity yielded more than six basis points, to 2.479% while Olli Rehn, a member of the European Central Bank (ECB), declared on Wednesday that the institution could reduce its rates if confidence in inflation around 2% persists.
Monthly data on inflation in the euro zone will be published on Friday.
CHANGES
The dollar, down 0.2% against a basket of reference currencies, hit a one and a half week low on Wednesday.
The single European currency advanced 0.09%, to 1.0828 dollars, after a peak at 1.0835 dollars, a first since April 10.
OIL
Oil prices rise on Wednesday with the weakening of the dollar and the prospect of an increase in demand for crude. Sources cite a report from the American Petroleum Institute that says U.S. crude inventories declined last week.
Brent gained 0.19% to $82.54 per barrel and American light crude (West Texas Intermediate, WTI) gained 0.22% to $78.19.
(Writing by Claude Chendjou, edited by Kate Entringer)
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