2023-09-26 10:51:09
* Wall Street expected to decline, European stock markets decline
* US long-term rates remain at their highest in 16 years
* The dollar remains at a high level
* Oil worries regarding state of demand
PARIS, September 26 (Archyde.com) – Wall Street is expected to fall on Tuesday, while European stock markets decline mid-session, under pressure from a Federal Reserve and a European Central Bank (ECB) still firm once morest inflation, the risks of a “shutdown” in the United States also reducing the appetite for risk.
Futures on New York indices suggest Wall Street opening in the red, with the Dow Jones dropping 0.41%, while the Standard & Poor’s 500 drops 0.46% and the Nasdaq 0.49%.
In Paris, the CAC 40 declined by 0.75% to 7,070.67 points around 10:30 GMT, compared to 0.10% for the FTSE in London, and 0.68% for the Dax in Frankfurt.
The pan-European FTSEurofirst 300 index lost 0.57%, compared to 0.9% for the EuroStoxx 50 and 0.52% for the Stoxx 600.
The tougher tone of central banks, which promise higher rates for longer, continues to weigh on risky assets.
In the United States, two monetary policy officials reiterated that the fight once morest inflation, and not support for economic activity, remained the Fed’s priority.
Austan Goolsbee, president of the Chicago Fed, said Monday that inflation above the 2% target remained a greater risk than the impact of restrictive monetary policy on activity.
Also Monday, Minneapolis Fed President Neel Kashkari said more rate hikes will likely be necessary given the surprising resilience of the U.S. economy.
In the euro zone, Christine Lagarde, president of the ECB, and Isabel Schnabel, member of the central bank’s board of governors, insisted on Monday that rates should be kept at a restrictive level long enough to bring inflation back to normal. his target.
“Fueled by the rise in real rates, the bond sales movement is causing damage, (…) on the equity markets, which have been in decline for a week,” note Natixis strategists.
“Without a convincing decline in European and American inflation figures this week, getting out of this market configuration in which almost everyone is suffering, except the dollar, seems complicated.”
A possible “shutdown” in the United States, which might be triggered next Sunday if Congress cannot agree on a budget for the next fiscal year, is also contributing to investors’ reluctance.
RATE
Yields on long US securities remain near 16-year highs, with the Fed’s reassessment of the monetary path and a busy new issuance calendar pushing yields higher.
The ten-year Treasury yield fell 3.5 bps to 4.507%, close to its highest level since 2007, with the two-year yield dropping 1.2 bps to 5.1185%.
The German ten-year yield eroded by 1.1 bps to 2.778%, close to its highest in 12 years, while that of the two-year rate
is stable at 3.217%.
VALUES TO FOLLOW IN WALL STREET
Companies in the video game industry might face an actors’ strike, with the video game actors’ union having voted in favor of a strike if negotiations on a new employment contract fail. Activision Blizzard and Electronic Arts are particularly concerned.
Coty launched an offer to issue 33 million shares on Monday and said it had filed an application for a dual listing on the Paris Stock Exchange.
VALUES TO FOLLOW IN EUROPE
Airbus announced on Tuesday the appointment of its commercial director, Christian Scherer, as general manager of its commercial aircraft activity, bringing the stock to the top of the CAC 40, up 0.47%.
Barclays advances 2.90%, among the best performances of the Stoxx 600, following Morgan Stanley raised its recommendation from “inline weighting” to “overweight”.
Dutch semiconductor equipment maker ASM International raised its 2025 revenue target on Tuesday, banking on its transition to new electronic chip technologies, but lost 1.99%, with analysts deeming the increase cautious .
Sectors sensitive to rates fell, with real estate losing 1.41%, compared to a drop of 1.88% for the new technologies compartment. Luxury, exposed to China, whose economy is slowing, lost 1.58% with a decline of 1.63% for LVMH and 2.58% for Richemont.
CHANGES
The dollar is treading water, near its highest level in almost a year, with the currency supported by expectations of higher rates for the Fed and its safe-haven status as uncertainty grows.
The dollar remains stable once morest a basket of reference currencies, the euro climbs 0.08% to 1.0598 dollars and the pound sterling falls 0.16% to 1.2191 dollars.
TO OIL
Oil markets are worried regarding restrictive policy rates and a stronger dollar, which might limit demand for crude.
Brent fell 0.83% to $92.52 per barrel, American light crude (West Texas Intermediate, WTI) declined 0.86% to $88.91.
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MORE MAJOR INDICATOR EXPECTED ON SEPTEMBER 26 (Written by Corentin Chappron, edited by Kate Entringer)
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