Traders at the New York Stock Exchange (NYSE)
by Augustin Turpin
Wall Street is expected to experience a modest increase on Monday, while European stock markets are showing mixed results during mid-session, as caution prevails at the start of a week packed with significant American economic indicators. New York index futures indicate a stable opening on Wall Street (0%) for the Dow Jones, with a rise of 0.14% for the Standard & Poor’s 500 and 0.21% for the Nasdaq.
In Paris, the CAC 40 dipped by 0.08% to 7,264.23 around 10:50 GMT. The DAX in Frankfurt rose by 0.12%, while the FTSE in London increased by 0.49%.
The pan-European FTSEurofirst 300 index decreased by 0.06%, the EuroStoxx 50 for the eurozone fell by 0.06%, and the Stoxx 600 dropped by 0.09%.
The fossil fuel sector increased by 0.7%, continuing a trend of rising oil prices for the fifth consecutive session amid ongoing tensions in the Middle East.
Financial stocks also saw a 0.7% rise, spurred by a nearly 5% jump in shares of German reinsurer Hannover Re following its first-half results.
This week will bring a wealth of data concerning U.S. economic activity, as concerns over a potential recession on the other side of the Atlantic persist, contributing to last week’s market decline.
Key releases this week include producer prices on Tuesday, as well as retail sales, industrial production, and the Philly Fed and Empire State activity indicators on Thursday, culminating with the University of Michigan sentiment indicator.
Market focus will particularly center on the CPI inflation indicator scheduled for Wednesday, which is crucial for determining the direction of U.S. monetary policy.
The Federal Reserve will convene in late August for the Jackson Hole symposium and will utilize this data to assess economic activity.
Traders are generally confident that the central bank will lower rates in September, with a 50 basis point reduction deemed 50% likely. Any deviation from this expectation could lead to volatile reactions in less liquid markets over the summer, which are already anxious due to the slowdown in U.S. employment.
VALUES TO FOLLOW ON WALL STREET
VALUES IN EUROPE
Eutelsat’s shares rose by 2.2% after the company announced on Friday that it has entered into exclusive negotiations for the partial sale of its passive ground segment infrastructure.
BT Group increased by 6.3% after Indian firm Bharti Enterprises agreed to purchase a 24.5% stake from the main shareholder of the British telecom operator, billionaire Patrick Drahi, whose Altice group is facing significant debt challenges.
JD Sports saw a decline of 4.3% following a downgrade of its recommendation by Deutsche Bank.
RATE
Eurozone bond yields are rising slightly as the market adopts a cautious approach regarding interest rates.
The yield on the ten-year German Bund increased by 2.6 basis points (bps) to 2.2490%, while the two-year Bund rose by 3.0 bps to 2.4110%.
The yield on the ten-year U.S. Treasury remained relatively unchanged, increasing by 1.1 basis points to 3.9532%.
CHANGES
The dollar experienced a slight advance (0.06%) against a basket of reference currencies, while the euro fell by 0.07% to 1.0924 dollars.
OIL
Oil prices increased slightly as geopolitical tensions continue to bolster prices.
Brent crude rose by 0.89% to $80.37 per barrel, while U.S. light crude (West Texas Intermediate, WTI) gained 1.13% to $77.71.
(Written by Augustin Turpin, edited by Kate Entringer)
Financial Markets Update: Wall Street and European Stocks
Traders au New York Stock Exchange (NYSE)
Written by Augustin Turpin
Current Market Trends
Wall Street is anticipated to rise timidly on Monday, with European stock markets showing mixed performance at mid-session. Caution prevails ahead of a week filled with important American economic indicators that could sway investor sentiment. New York index futures are signaling a balanced opening, with the Dow Jones expected to hold steady (0%), while the Standard & Poor’s 500 and the Nasdaq see minor gains of 0.14% and 0.21%, respectively.
European Market Performance
In Paris, the CAC 40 index shed 0.08%, settling at 7,264.23 around 10:50 GMT. Conversely, Frankfurt’s Dax gained 0.12%, and London’s FTSE recorded a gain of 0.49%. Among pan-European indices, the FTSEurofirst 300 index declined by 0.06%, and both EuroStoxx 50 and Stoxx 600 experienced slight dips of 0.06% and 0.09%, respectively.
Sector Highlights
Fossil Fuels and Financials Surge
The fossil fuel sector saw a 0.7% increase, bolstered by rising oil prices for the fifth consecutive session amid persistent geopolitical tensions in the Middle East. Financial stocks also enjoyed a boost with a 0.7% gain, driven by a nearly 5% surge in the shares of German reinsurer Hannover Re following strong first-half results.
Upcoming Economic Indicators
This week is rich in U.S. economic data, critical for investors who are cautious following last week’s sharp declines amid recession fears. Key indicators to watch include:
- Producer Prices: Scheduled for Tuesday
- Retail Sales: Set for Thursday
- Industrial Production: Also on Thursday
- Philly Fed and Empire State Indicators: Thursday
- University of Michigan Sentiment Indicator: Released during the week
Focus on the CPI Inflation Indicator
Investor focus is expected to sharpen around the CPI inflation indicator, releasing Wednesday, as it plays a crucial role in guiding U.S. monetary policy. The Federal Reserve will convene at the end of August for the Jackson Hole symposium, where the data will significantly influence their assessment of economic activity.
Market traders currently estimate a 50% likelihood of a 50 basis point rate cut in September. A potential shift in this outlook could lead to volatile reactions in an already sensitive summer market, particularly in light of the slowdown in U.S. employment figures.
Stocks to Watch on Wall Street and in Europe
U.S. Stocks
Investors should keep an eye on specific stocks as trading resumes on Wall Street:
- Tech Sector Gains: Watch companies in the tech sector as analysts predict moderate upward movements.
- Consumer Goods: Companies facing supply chain challenges and retail performance, as they reveal their quarterly results.
European Stocks
In Europe, notable factors include:
- Eutelsat: Surged by 2.2% after announcing exclusive negotiations for partial sales of its passive ground segment infrastructure.
- BT Group: Gained 6.3% after Bharti Enterprises agreed to purchase a 24.5% stake from Patrick Drahi’s struggling Altice Group.
- JD Sports: Dropped 4.3% following a downgrade by Deutsche Bank.
Bond and Currency Markets
Rate Movements
Eurozone bond yields are seeing slight increases amid a cautious stance on interest rates. The ten-year German Bund yield rose by 2.6 basis points (bps) to 2.2490%, whereas the two-year Bund gained 3.0 bps to 2.4110%. Meanwhile, the ten-year U.S. Treasury yield changed little, gaining 1.1 bps to 3.9532%.
Currency Trends
The dollar has advanced slightly (0.06%) against a basket of reference currencies, while the euro declined by 0.07%, now trading at 1.0924 dollars.
Commodities Market Insights
Oil Prices
Geopolitical tensions continue to support oil prices, with Brent crude gaining 0.89% to $80.37 per barrel. U.S. light crude (West Texas Intermediate, WTI) is up 1.13%, now priced at $77.71.
In Summary
This week promises to be pivotal for traders, with critical economic indicators poised to influence market sentiment on both sides of the Atlantic. With cautious optimism noted in the U.S. markets and uneven performance across European exchanges, investors are advised to remain informed and proactive in their strategies.
