Expect more shares to rise, and returns to decline
Business

Expect more shares to rise, and returns to decline

German stock market index DAX on the Frankfurt Stock Exchange

German stock market index DAX on the Frankfurt Stock Exchange

by Laetitia Volga

PARIS (Reuters) – Major European stock markets are expected to rise on Monday as bond yields dip as investors hope the Federal Reserve will raise interest rates more slowly in December.

Futures give an increase of 0.54% for the CAC 40 in Paris, 1.03% for the DAX in Frankfurt and 0.92% for the EuroStoxx 50 index. The FTSE in London is expected to approach equilibrium.

European stocks closed Wall Street in the green on Friday after information from the Wall Street Journal that Federal Reserve members wanted to open discussions at their November 1 and 2 meeting about the slowdown in monetary tightening in December.

Markets are still pricing in a 75 basis point rate hike next month but lowered expectations for a similar rise in December. According to CME Group’s FedWatch Scale, investors estimate a 42% chance of a three-quarter point increase in the federal funds rate in December, compared to about 66% a week earlier.

On the monetary front, the week that opens is the week of the European Central Bank, which will release its comments on Thursday, and markets are widely expecting a 75 basis point rate hike.

A slew of corporate results are also included in the program for this week, with major US tech groups in particular. Ahead of all this, the morning in Europe will be energized by the publication of the first results of IHS Markit PMI surveys on private sector activity.

The values ​​to be followed:

On Wall Street

The New York Stock Exchange closed higher on Friday after the publication of an article in the Wall Street Journal about the Federal Reserve.

The Dow Jones increased 2.47% to 31,082.56 points, the S & P-500 increased 2.37% to 3,752.75 points and the Nasdaq Composite rose 2.31% to 10,859.72 points.

In terms of values, Snap fell 28.1% after posting its weakest quarterly revenue growth in five years due to lower advertising revenue. In its wake, Meta lost 1.16% and Pinterest 6.40%.

Futures are pointing to Wall Street to open moderately higher at the moment.

In Asia

The Nikkei in Tokyo rose 0.31%, near 27,000 points, on the Fed’s speculation and a weaker yen.

In China, stock markets were in the red after the 20th Communist Party Congress, during which President Xi Jinping was reappointed for a third term. The announcement of the formation of the Politburo Standing Committee, in which there are only loyalists of Xi Jinping, raises fears that the latter will strengthen his ideological policies at the expense of economic growth.

The CSI 300 index of large stocks is down 2.72% and the Shanghai SSE Composite Index is down 1.86%. Hong Kong’s Hang Seng fell 6.28% to its lowest level since 2009.

“The message is clear: the ‘zero COVID’ policy, the shared-prosperity agenda and sectoral repression are not going away anytime soon,” said Alice Cotney of Janus Henderson Investors, adding that those risks would limit the country’s annual growth to just 2% or 3%.

In the third quarter, GDP grew 3.9% in one year, which is higher than expected.

modified

US Treasury yields fell in Asian trading: the 10-year fell seven basis points to -0.075%.

In the European market, the German 10-year-old also fell in early trading to 2.335%.

the changes

The dollar stabilized against other major currencies (-0.03%) and the single European currency fell to $0.9852 (-0.08%).

The yen is falling again against the dollar after rising nearly 1.4% during the session in a surprise move indicating that the Bank of Japan, on behalf of the Ministry of Finance, may have intervened again to halt the currency’s prolonged decline.

According to the Financial Times, the Bank of Japan may have sold at least $30 billion on Friday.

Across the channel, the pound was up 0.58% against the dollar. Former Prime Minister Boris Johnson announced his withdrawal from the Conservative Party presidential race on Sunday, putting former Finance Minister Rishi Sunak in a good position for the job and becoming the next tenant in 10 Downing Street.

oil

The oil market is declining, as statistics released in China showed a slowdown in crude oil imports year on year in September.

Brent lost 0.98 percent to $92.58 a barrel and US light crude (West Texas Intermediate, West Texas Intermediate) 1.16 percent to $84.06.

(Reporting by Leticia Volga; Editing by Kate Enteringer)

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