by CORENTIN CHAPRON
PARIS (Reuters) – Wall Street is expected to fall on Friday, while European stock markets fall mid-session, under pressure from geopolitical tensions, the posture of the Federal Reserve and the latest results from the semiconductor sector.
Futures on New York indices suggest Wall Street opening in the red, with the Dow Jones falling 0.22%, while the Standard & Poor’s 500 gains 0.4% and the Nasdaq 0.62%.
In Paris, the CAC 40 lost 0.41% to 7,990.75 points around 11:14 GMT. The Dax in Frankfurt fell by 0.65%, compared to 0.55% for the FTSE in London.
Read also…
The pan-European FTSEurofirst 300 index declined by 0.4%, compared to 0.59% for the EuroStoxx 50 and 0.54% for the Stoxx 600.
Israel reportedly responded on Friday to the large-scale attack carried out by Iran last Saturday, with three drones being shot down over Isfahan.
Investors took refuge in safe haven assets after the attack was announced, although Iran, which did not mention Israel, downplayed the incident and indicated that it did not want to retaliate.
These developments nevertheless deteriorate sentiment on the markets, while the Federal Reserve has warned that its rates will remain higher than expected by the markets in a context of persistent inflation.
On Wednesday, Fed Chairman Jerome Powell said it was “appropriate to give restrictive monetary policy a little more time to act.”
“The markets seem to be recovering after a week dominated by the anxiety aroused, on the one hand, by the tensions in the Middle East and, above all, on the other hand, by the adoption by the market of a scenario where the relaxation of monetary policies could take more time,” note LBPAM strategists.
Separately, TSMC’s decision to leave its capital spending unchanged disappointed investors, while enthusiasm around semiconductor demand for AI applications was one of the major themes in equity markets in 2024 .
The results of ASML, the lithography specialist, were also less good than expected by investors, which contributes to putting pressure on the sector.
VALUES TO FOLLOW IN WALL STREET
Netflix unexpectedly announced that it would no longer publish its subscriber numbers, while its revenue forecast for the second quarter disappointed expectations.
Sony Pictures Entertainment and Apollo Global Management were discussing a joint bid to acquire Paramount Global.
VALUES TO FOLLOW IN EUROPE
L’Oreal reported on Thursday a 9.4% increase in its turnover on a comparable basis in the first quarter, and is up 4%.
Renault lost 3.07% after Nissan Motor, partner of the French group, reduced its annual operating profit forecast by 14.5% on Friday.
Sodexo said on Friday it expects organic revenue growth for 2024 at the high end of the range of 6% to 8%, which pushes the price up 3.88%.
Schneider Electric fell 2.35% after announcing discussions with Bentley Systems regarding a potential transaction.
Pluxee on Friday raised its organic sales growth and Ebitda margin targets for 2024 and jumped 8.36%.
Ipsos reported Thursday a turnover of 557.5 million euros in the first quarter, compared to 532 million a year ago, and a fall of 8.48%.
RATE
The search for safe assets supports sovereign bonds, whose yields are declining in the United States and Europe.
The yield on the German ten-year rate weakened by 3.2 bp to 2.462%, that of the two-year rate lost 1 bp to 2.974%.
The yield on the ten-year Treasury declined by 5.7 bps to 4.5899%, while the two-year fell by 2.8 bps to 4.9622%.
CHANGES
Currencies vary little in a wait-and-see environment.
The dollar is stable against a basket of reference currencies, the euro is standing still at $1.0641, and the pound sterling is losing 0.06% to $1.2428.
OIL
Crude prices are declining as markets believe that Israel’s reported response to Iran’s large-scale attack on Saturday appears limited, reducing the risk of a conflagration in the Middle East. Tehran has in fact declared that it does not plan to respond to the attack.
Brent eroded by 0.76% to $86.45 per barrel and American light crude (West Texas Intermediate, WTI) lost 0.75% to $82.11.
(Written by Corentin Chappron, edited by Blandine Hénault)
©2024 Thomson Reuters, all rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. “Reuters” and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.