NERVOUSNESS should dominate before a VERY BUSY week
by Laetitia Volga
PARIS (Reuters) – Major European stock markets are expected to fall at the open on Monday, as fears of a recession should prevail again ahead of key economic and monetary appointments ahead. days, starting with the meeting of the US Federal Reserve ( Fed).
Futures contracts suggest a decline of 0.48% for the Paris CAC 40, 0.72% for the Dax in Frankfurt, 0.36% for the FTSE in London and 0.64% for the EuroStoxx 50.
The Fed concluded its two-day meeting on Wednesday and markets are widely expecting another 75 basis point rate hike, with only about a 9% chance of a one percentage point increase.
“There is further downside risk to risky assets as recession fears rise and central banks remain committed to fighting inflation at the expense of growth,” Standard Chartered strategists said in a statement. .
The week will also be encouraged by the first figures for the US GDP in the second quarter, expected to increase by 0.4% in the Reuters consensus after a decrease of 1.6% in the January-March period. In the meantime, investors will be watching Germany’s Ifo business climate index at 08:00 GMT.
The week was the busiest in terms of corporate results and observers will be listening to the impact of the strong dollar on major American groups. Among the expected publications, those of Meta, Alphabet, Apple, or even Pfizer and Boeing will be very popular.
In Europe, Volkswagen, Nestlé, Deutsche Bank as well as Airbus, TotalEnergies, LVMH and BNP Paribas are expected in Paris.
ON WALL STREET
The New York Stock Exchange ended lower on Friday as disappointing results from Snap weighed on other social media and tech companies.
The Dow Jones index fell 0.43% to 31,899.29 points, the broader S&P-500 lost 0.93% to 3,961.63 points and the Nasdaq Composite fell 1.87% to 11,834, 11 points.
Snap, owner of the Snapchat app, fell nearly 40% to $9.96, its lowest level since March 2020, after posting its weakest quarterly revenue growth ever to go public.
Other companies that rely heavily on advertising, such as tech giants Meta Platforms and Alphabet, fell 7.6% and 5.6% respectively.
Among the eleven main sectors of the S&P-500, communications services (-4.3%) and technology (-1.4%) suffered the largest declines.
Futures signaled a decline of about 0.2% at the open.
After seven sessions of gains in a row, the Nikkei of the Tokyo Stock Exchange fell 0.77%, punished by heavyweights in the technology sector in the wake of Wall Street.
Concerns over COVID-19 and the struggling real estate sector weighed on Chinese markets: the Shanghai Stock Exchange composite index fell 0.57% and mainland China’s large-cap CSI 300 0.6%.
The dollar was strong against other major currencies (-0.02%) and the euro traded at 1.0196 dollars
On the bond side, the ten-year American is a little over 2.7977%.
It fell on Friday in the session to the lowest level in two months, at 2.732%, after contracting, for the first time since June 2020, in the PMI composite and service indices, according to the preliminary results of the S&P survey .
In early trade, the German 10-year Bund yield rallied around 4.5 basis points to 1.065% after falling on Friday on recessionary fears as the European PMI index came in below expectations. .
Oil is subject to concerns that further increases in US interest rates could limit demand for crude oil.
Brent lost 0.59% to 102.59 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.78% to 93.96 dollars.
(edited by Kate Entringer)