by Laetitia Volga
PARIS (Reuters) – Wall Street is expected to rise on Monday, like the European stock markets at mid-session, with investors opting for measured optimism to start a week that will be rich in corporate results, economic indicators and not forgetting the Federal Reserve’s monetary policy meeting.
Futures contracts are signaling a gain of 0.5% for the Dow Jones, 0.49% for the Standard & Poor’s-500 and 0.47% for the Nasdaq.
Around 11:20 GMT, the CAC 40 in Paris advanced by 0.57% to 6,252.08 points, the highest since June 10. In Frankfurt, the Dax took 0.45% and in London, the FTSE rose 0.17%.
The pan-European FTSEurofirst 300 index gained 0.26%, the EuroStoxx 50 in the euro zone gained 0.47% and the Stoxx 600 0.23%.
After the monetary tightening carried out by the European Central Bank last week, attention is now focused on the US Fed which, according to market observers, should announce on Wednesday a rise in rates to 75 basis points.
Investors will be curious to know how the Fed views the pace of future hikes as inflation is likely to rise further and the economy slides into recession.
The first figures for US GDP in the second quarter will be published on Thursday and the Reuters consensus expects growth of 0.4% after a contraction of 1.6% over the period January-March.
Investors are also preparing for an acceleration in the publication of corporate results both in the United States, in particular with the giants of the technology sector, and in Europe where the profits of Stoxx 600 companies should have increased by 22% over a year, according to Refinitiv I/B/E/S forecast.
“‘Recession scare’ was dominating in the morning but now it looks like earnings expectations for big US tech stocks are better and that’s boosting market sentiment,” said Stuart Cole, chief macro- economist at Equiti Capital.
Another supporting factor, the countries of the European Union are trying to soften the Brussels project aimed at limiting their gas consumption.
VALUES IN EUROPE
The banking sector, which benefited from the rise in central bank rates, posted the best performance (+1.75%).
At individual values, the title Faurecia gained 7.57% and Plastic Omnium 2.53% after the publication of the results of the two automotive suppliers.
Orange grants itself 1.42% after the announcement of an agreement for the merger of its activities in Spain with those of MasMovil for a total enterprise value of 18.6 billion euros.
Eutelsat loses 16.59% after announcing that it is in discussions with its co-shareholders in OneWeb with a view to a possible merger of the two companies by exchange of shares.
Elsewhere in Europe, Philips fell 11.14% after publishing a larger than expected drop in its quarterly Ebita and lowered its forecasts and Volkswagen dropped 1.16% after the announcement of the departure of its chairman of the management board on September 1.
Benchmark bond yields in Europe and the United States are up after falling sharply on Friday in reaction to the weaker-than-expected PMI figures.
The German ten recovered more than three basis points to 1.051%, a movement which is also explained by statements by Martins Kazaks, member of the Governing Council of the ECB, who pleads for a new “significant” rate hike in September. after rising by half a point last week.
On the US market, the yield on ten-year Treasuries gained three basis points to 2.8087%.
The dollar fell 0.33% against a basket of international currencies and the euro rose slightly to 1.0242 dollars.
The oil market is rebounding putting aside fears related to demand with the rise in US interest rates.
Brent gained 0.95% to 104.18 dollars a barrel and American light crude (West Texas Intermediate, WTI) 1.06% to 95.7 dollars.
NO MORE MAJOR ECONOMIC INDICATOR ON TODAY’S AGENDA
(Writing by Laetitia Volga, editing by Kate Entringer)