EUROPEAN STOCK MARKETS ARE EXPECTED TO BE HIGH TO MODERATE
by Laetitia Volga
PARIS (Reuters) – The main European stock market is expected to rise modestly at the opening on Thursday after Wall Street, as strong economic data and company results contributed to attract investors for of risky assets.
Futures contracts gave an increase of 0.16% for the Parisian CAC 40, 0.35% for the Dax in Frankfurt, 0.12% for the FTSE in London and 0.16% for the EuroStoxx 50.
The European market should start the session in the same fashion as the day before after the good reception reserved for the results of several major groups and the announcement of a sudden acceleration of ISM services in the United States which reinforces the idea that the US economy is not in recession despite the decline in GDP in the first half.
The day will be punctuated by new company results and monetary policy announcements from the Bank of England, which could raise its key rate by 50 basis points according to most investors and analysts.
On the side of the Federal Reserve, some officials on Wednesday confirmed their determination to curb inflation although Mary Daly, president of the San Francisco branch, told Reuters that a half-point increase could be enough in September.
“Expectations that the Fed is pulling back from monetary tightening have been dashed in the past 48 hours by almost everyone, with officials suggesting that rate hikes will continue at a fairly aggressive pace,” said Rob Carnell of ING.
“That message did not flow to the equity market, which lived on a reasonably strong set of results and relatively decent economic data and thought well, instead of doing what it wanted to do. say that. [le discours de la Fed est] it’s a bit worrying,” added the research manager.
Following Societe Generale’s strong quarterly results on Wednesday, Crédit Agricole posted better-than-expected second-quarter results thanks to a record level of investment banking activity, as the volatility in the market leads to strong demand for coverage.
ON WALL STREET
The New York Stock Exchange ended higher on Wednesday as strong earnings forecasts from Paypal (+9.25%) and CVS Health (+6.3) boosted investor confidence and helped lift the Nasdaq to a record since early May.
The Dow Jones Industrial Average gained 1.29% to 32,812.50 points, the broader S&P-500 gained 1.56% to 4,155.12 points and the Nasdaq Composite advanced 2.59% to 12,668, 16 points.
Moderna jumped about 16% after announcing a $3 billion share buyback program.
Regeneron Pharmaceuticals rose 5.9% after doing better-than-expected quarterly revenue while coffeehouse chain Starbucks rose 4% after reporting quarterly profit that beat expectations.
The future heralds an open with little change.
In Tokyo, the Nikkei rose 0.69% after Wall Street and was supported by good corporate results.
Automaker Subaru rose 8.48% after its results and its encouraging forecast but its competitor Toyota fell 2.99% after a sharper-than-expected decline in its quarterly operating profit.
Casio Computer earned 6.29% of the current quarter’s profit target above expectations while Nintendo <7974.T> gained 0.41% as the video game maker maintained its guidance for the year despite a year-over-year decline in quarterly sales of the Switch console.
In China, the CSI 300 rose 0.63% and the Shanghai SSE Composite gained 0.55%, as investors’ attention turned to signs of accelerating infrastructure investment aimed at reviving the economy from the country.
The dollar was unchanged against a basket of reference currencies (-0.03%) after benefiting the previous day from statements by members of the Fed.
The euro is shown at 1.0157 dollars.
In the bond market, the yield on ten-year US Treasuries fell two basis points to 2.73%, after hitting a two-week high on Wednesday at 2.851% in reaction to “hawkish” comments from member of the Fed and the good surprise. of ISM services.
The ten-year German was stable at 0.858%.
Concerns about oil supply contributed to the rise in prices, which last day hit a six-month low due to the announcement by the Energy Information Administration (EIA) of an unexpected increase in crude oil and gasoline inventories. in the United States last week.
Brent rose slightly to $96.55 a barrel and US light crude (West Texas Intermediate, WTI) to $90.54.
OPEC+, which brings together the Organization of the Petroleum Exporting Countries and its allies, decided on Wednesday to raise its September production target by 100,000 barrels per day, a setback for President Joe Biden after his trip to Saudi Arabia last month to convince Riyadh. to open the floodgates of low prices.
(Laetitia Volga, editing by Kate Entringer)