The Euronext stock exchange in the business district of La Défense in Paris
by Claude Chendjou
PARIS (Reuters) – The main European stock markets are again expected to have small variations at the opening on Tuesday, the context being cautious before the publication of data on US inflation on Wednesday.
According to the first indications available, the Parisian CAC 40 should gain 0.17% at the opening and the Dax in Frankfurt 0.30%. The FTSE 100 in London could retreat by 0.02%. The EuroStoxx 50 index is expected to rise by 0.19%.
Among the economic indicators of the day are in Germany the monthly ZEW index of investor sentiment and the final inflation figures for June. The market, however, is mainly waiting for the monthly consumer prices (CPI) in the United States, expected on Wednesday, which could provide indications on the path of interest rates.
The Reuters consensus on the matter foresees a slowdown in the US CPI to 3.1% over one year, which could bolster hopes of an imminent end to the rise in the cost of credit after the pause decided in June.
Several officials of the US Federal Reserve (Fed) are also due to speak this week. On Monday, San Francisco Fed President Mary Daly said two more rate hikes would likely be needed to counter inflation, but that cycle of monetary tightening was coming to an end.
On the microeconomics side, the start of the corporate earnings season in the United States is scheduled for Friday, with JPMorgan Chase and Citigroup in particular. According to data from Refinitiv, earnings for S&P-500 companies are expected to fall 6.4% in the second quarter, while
Citigroup lowered its rating on US stocks to “neutral” on Monday, citing the threat of a recession.
AT WALL STREET
The New York Stock Exchange ended slightly higher on Monday, rebounding from last week’s losses.
The Dow Jones Industrial Average gained 0.62%, or 209.52 points, to 33,944.40 points.
The broader S&P-500 gained 10.58 points, or 0.24%, to 4,409.53 points.
The Nasdaq Composite advanced for its part by 24.77 points (0.18%) to 13,685.48 points.
In stocks, among moves of note, semiconductor makers Intel and Qualcomm ended higher after US Treasury Secretary Janet Yellen said over the weekend that her visit to Beijing had resulted in to “direct” and “productive” meetings with senior Chinese officials.
IN ASIA
On the Tokyo Stock Exchange, the Nikkei index was almost stable at 32,192.4 points, while the broader Topix lost 0.46% to 2,232.96 points as the close approached.
The Japanese market, which has suffered five consecutive declines, is trying to rebound with the semiconductor sector, driven by groups such as Advantest (+4.03%), Tokyo Electron (+0.53%) and Sumco (+4.73%).
The MSCI index comprising stocks from Asia and the Pacific (excluding Japan) rose by 0.7%.
In China, the Shanghai SSE Composite gained 0.48% and the CSI 300 gained 0.63%.
VALUES TO FOLLOW IN EUROPE:
EXCHANGES/RATES
The prospect of an imminent end to the rise in interest rates in the United States weighs on the dollar which fell 0.18% against a basket of benchmark currencies, to a two-month low, at 101.88 points.
The Japanese currency climbed back to 141.15 yen per dollar, to a one-month high.
The euro is trading at 1.1019 dollars (+0.18%).
On the bond market, the yield on ten-year US Treasury bills is almost stable, at 3.9879%.
OIL
Dollar weakness and next month’s expected cuts in crude output from Russia and Saudi Arabia are supporting oil prices: Brent rose 0.58% to $78.14 a barrel and U.S. light crude ( West Texas Intermediate, WTI) 0.67% to $73.48.
(Written by Claude Chendjou, edited by Bertrand Boucey)