PARIS (Reuters) – Wall Street is expected to fall at the opening on Tuesday, while the European stock markets hesitate at mid-session in a context of caution ahead of numerous indicators and results, and in the uncertainty of the evolution of the conflict in the Middle East.
Futures on New York indices suggest Wall Street opening in the red, with the Dow Jones dropping 0.24%, while the Standard & Poor’s 500 is expected to drop 0.25% and the Nasdaq 0.26%.
In Paris, the CAC 40 declined by 0.13% to 7,012.94 points around 10:28 GMT, compared to an increase of 0.35% for the FTSE in London, and a decline of 0.29% for the Dax in Frankfurt.
The pan-European FTSEurofirst 300 index lost 0.18%, compared to 0.25% for the EuroStoxx 50 and 0.14% for the Stoxx 600.
Markets remain cautious as several key indicators will be published in the coming days, two weeks before the next monetary policy meeting of the Federal Reserve, and around ten days before the next monetary policy meeting of the European Central Bank (ECB).
Many policymakers are expected to speak on Tuesday, including Luis de Guindos for the ECB and John Williams for the Fed, while US retail sales are due at 12:30 GMT, a key indicator of consumer resilience American.
Chinese retail sales and the final inflation figures in the euro zone and the United Kingdom will also be published on Wednesday before the Fed’s Beige Book, the basis for work by its monetary policy committee.
Risky assets are also suffering from the rebound in bond yields, even though the risk of an escalation of the conflict in the Middle East benefited sovereigns last week.
“In the absence of an escalation of tensions over the Israeli-Palestinian conflict, European and American rates are tightening and correcting part of the flight-to-quality movement from which they benefited last week,” emphasize Natixis strategists .
The markets will also be attentive to the situation of Country Garden, a Chinese developer on the verge of default and which could revive fears about the Chinese real estate sector.
VALUES TO FOLLOW IN WALL STREET
The U.S. auto regulator said Tuesday that Tesla will recall 54,676 Model
Many corporate results are expected before the opening, including those from Bank of America, Goldman Sachs, Bank of New York Mellon, Johnson & Johnson and Lockheed Martin.
VALUES TO FOLLOW IN EUROPE
Sodexo, Edenred and Elior rose by 1.85%, 3.24% and 3.84% respectively, in reaction to information from Les Echos according to which commissions on restaurant vouchers could ultimately not be capped.
Airbus advances 2.26%, at the top of the CAC 40, after Jefferies raised its recommendation to “buy” from “hold”. Ericsson fell 8.14% after reporting a contraction in third-quarter revenue on Tuesday due to a drop in demand for 5G equipment in North America, with uncertainty weighing on its business of mobile networks expected to persist until 2024. Its competitor Nokia lost 4.22%, while the sector index in Europe lost 0.79%.
The Belgian Umicore (+13.74%) leads the Stoxx 600 after reducing its net investment spending target for 2026, the Canadian government having granted it a subsidy of around 700 million euros to build a factory of batteries. Nordic Semiconductor fell 15.17%, trailing the STOXX 600, as the Norwegian chipmaker’s fourth-quarter guidance came in below expectations.
RATE
Rates are rising as last week’s risk aversion movement continues to reverse.
The ten-year Treasury yield increased by 4.8 bp to 4.7584%, with the two-year yield increasing by 1.3 bp to 5.1113%.
The German ten-year yield rose by 3.2 bp to 2.813%, with that of the two-year rate rising 3 bp to 3.185%.
CHANGES
Foreign exchange markets remain calm, with the exception of the pound, which fell after the latest wage figures which removed the risk of further rate increases in the United Kingdom.
The dollar gains 0.05% against a basket of reference currencies, the euro is stable at 1.0554 dollars and the pound sterling loses 0.43% to 1.2164 dollars.
OIL
Crude is hesitating, despite the resumption of negotiations between the Venezuelan opposition and the Caracas government, which could convince the United States to lift sanctions hitting the local oil industry.
Brent rose 0.19% to $89.82 per barrel, with American light crude (West Texas Intermediate, WTI) remaining stable at $86.68.
(Written by Corentin Chappron, edited by Kate Entringer)
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