Wall Street expected to rise, Europe advances with company results

by Diana Mandia

(Reuters) – Wall Street is expected to rise on Wednesday and the European stock markets are also progressing at mid-session, after a series of company results, notably those of Adidas and LVMH. New York index futures signal Wall Street opening up 0.44% for the Dow Jones, 0.4% for the Standard & Poor’s-500 and 0.26% for the Nasdaq. In Paris, the CAC 40 rose 1.38% to 8,042.16 around 10:48 GMT. In Frankfurt, the Dax advanced by 0.74% and in London, the FTSE by 0.56%.

The pan-European FTSEurofirst 300 index gained 0.69%, the Eurozone EuroStoxx 50 0.97% and the Stoxx 600 0.68%.

After the sharp decline during Tuesday’s session, company results set the tone this Wednesday in the absence of any other major event, the quarterly figures from LVMH and the upward revision of the outlook for Adidas, two of the largest European capitalizations, having been well received by investors.

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With high interest rates making corporate borrowing more expensive, the health of Europe’s major companies is being closely watched, especially as overall first-quarter profits are expected to have fallen 12.1% year-on-year previous, according to LSEG data.

In this context, the confirmation by Eurostat of the slowdown in inflation in the euro zone in March provides relief and reinforces expectations of a reduction in interest rates from the European Central Bank (ECB) in June despite geopolitical risks and doubts about the plans of the American Federal Reserve.

Several ECB policymakers, including Isabel Schnabel, Piero Cipollone and Pablo Hernandez de Cos, will speak later today. VALUES TO FOLLOW AT WALL STREET

The airline United Airlines, which on Tuesday evening anticipated a higher profit than expected for the current quarter, takes 4.8% before the opening.

VALUES IN EUROPE

In Paris, the luxury giant LVMH rose 5.2%, leading the CAC 40, after results in line with the consensus which reassured investors. The STOXX Europe Luxury 10 index gained 2.59%, with L’Oreal gaining 1.78%, Hermes 3.14%, Richemont 2.2% and Burberry 1.9%.

Derichebourg shares fell 5.1% after lowering their targets following a reassessment of the cyberattack suffered last November.

Elsewhere in Europe, Adidas climbed 7.8%, the action having reached a two-year high, after the German sports equipment manufacturer reported results above expectations on Tuesday, driven by the dynamics of its sales, and noted its prospects for 2024.

ASOS rose 2.8% as the British online fashion retailer’s maintained forecasts and appointment of a new finance director eclipsed its first-half net loss.

ASML, one of the main suppliers to semiconductor manufacturers, fell by 3.1% after reporting fewer new orders than expected in the first quarter.

Continental drops 5.8% after revenue and margin lower than expectations in the first quarter.

RATE

Euro zone bond yields were mostly stable on Wednesday after rising earlier this week, as traders weighed possible central bank plans following strong US data. The yield on the German ten-year rate stands at 2.484%, and that on the two-year rate at 2.951%.

The American bond markets are also stable after recent increases: the ten-year bond market is at 4.6449%, and the two-year bond market is at 4.9599%.

CHANGES

The dollar fell slightly (-0.09%) against a basket of reference currencies, while remaining close to its 5 and a half month high, while the euro gained 0.24% to 1.0642 dollar.

OIL

Oil prices fell on Wednesday on a likely rise in U.S. weekly inventories, while weaker-than-expected economic data in China and doubts over Fed rate cuts fueled concerns about demand.

Brent lost 0.89% to $89.22 per barrel and American light crude (West Texas Intermediate, WTI) fell 0.89% to $84.6.

NO MORE MAJOR ECONOMIC INDICATOR ON TODAY’S AGENDA

(Written by Diana Mandiá, edited by Blandine Hénault)