File photo of the sign pointing to Bourse near Brüngniart Palace
by Laetitia Volga
PARIS (Reuters) – Major European stock markets are expected to rise moderately on Monday in the wake of Wall Street and two days before the Federal Reserve’s announcement that investors will be hoping for clues on the pace of interest rate hikes.
The first available indicators show an increase of 0.3% for the Parisian CAC 40, 0.33% for the Dax in Frankfurt, 0.18% for the FTSE in London and 0.39% for the EuroStoxx 50.
Market sentiment is expected to remain positive at the open as the US Federal Reserve meeting on Tuesday and Wednesday is already on the mind. The scenario of a three-quarter point rate hike is largely favored by investors, the latter waiting above all to see if the institution has left any indications on the path of its monetary tightening.
“But with US recession risks rising and global turmoil growing, observers will be wondering if this month’s rate hike could be the last of this magnitude,” said John Blassard at Mirabud.
“Before the end of the year, the Fed could start discussing when it should start raising rates by half a point or even the most popular quarter point. However, the question is whether the Fed is in any hurry to slow the pace, given The labor market is still strong and inflation is still high.
Besides the Fed, the week will also be energized by the monetary policy meeting of the Reserve Bank of Australia (Tuesday) and the Bank of England (Thursday).
In terms of indicators, the release of the monthly employment report in the US on Friday will provide new elements for the US economy. For now, at 10:00 GMT, investors’ attention will be focused on the first estimate of October inflation and third-quarter GDP in the Eurozone.
On Wall Street
The New York Stock Exchange ended sharply on Friday, buoyed by good corporate results and reassuring inflation statistics.
The Dow Jones rose 2.59% to 32,861.8 points, the broader S & P-500 increased 2.46% to 3,901.06 points and the Nasdaq Composite rebounded for its part at 2.87% at 11,102.45 points.
On the week, the Dow Jones Index rose 5.7%, posting the largest weekly percentage gain since May. The S&P 500 rose 3.9% and the Nasdaq 2.2%.
US consumer income and spending figures set the tone for the session by showing stability in the higher PCE price index, which is most watched by the Federal Reserve, and its “core” version that excludes energy and food products.
These statistics have revived the debate about a possible slowdown in the Fed’s rate hike in the near future.
In stocks, Amazon fell 6.80% after it said it expects sales growth to slow in the fourth quarter due to inflation.
Apple stock rose 7.55% and Intel 10.65%, and the market welcomed their good performance in the July-September quarter.
Futures contracts are currently pointing to an open with little change, or even a slight decrease.
In Asia
The Nikkei index on the Tokyo Stock Exchange finished 1.78% higher, buoyed by advances from big names in the technology sector.
Shares of the Japanese electronics giant Hitachi jumped 6.04% after it raised its earnings forecast.
Chinese markets are in the red after posting barely encouraging indicators. According to official PMIs, activity in services and manufacturing contracted in October due to slowing global demand and COVID-19 restrictions.
The CSI 300 index of large companies in mainland China lost 1.07% and the Shanghai SSE Composite Index lost 0.85%.
Prices / exchanges
US Treasury yields are on the rise as inflationary pressures remain high in the US prompting investors to cool hopes of an imminent slowdown in interest rate hikes by the Federal Reserve.
The yield on the 10-year Treasury bond gained 2 basis points to stand at 4.0312%.
On the foreign exchange front, the dollar rose against the other major currencies (+0.11%) while the euro was trading at $0.9937.
oil
The oil market is falling due to weaker-than-expected data on industrial activity in China and concerns about demand with health restrictions in the country.
Brent fell 0.82 percent to $94.98 a barrel and US light crude (West Texas Intermediate, West Texas Intermediate) 0.81 percent to $87.19.
(by Laetitia Volga, edited by Mathieu Brotthard)
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