THE EUROPEAN STOCK MARKETS ARE EXPECTED TO EXPECT A MODERATE RISE
by Laetitia Volga
PARIS (Reuters) – Major European stock markets are expected to rise moderately in Wall Street’s wake on Thursday’s open as solid economic data and corporate earnings helped attract investors to risky assets.
Futures contracts result in a gain of 0.16% for the Paris CAC 40, 0.35% for the Dax in Frankfurt, 0.12% for the FTSE in London and 0.16% for the EuroStoxx 50.
The European market should start the session with the same trend as the day before, after the good reception reserved for the results of several large groups and the announcement of a surprise acceleration in the ISM of services in the United States, which has strengthened the idea that the The US economy is not in a recession despite the fall in GDP in the first half of the year.
The day will be punctuated by fresh corporate earnings and policy announcements from the Bank of England, which most investors and analysts are expecting could raise interest rates by 50 basis points.
On the Federal Reserve side, other officials on Wednesday reiterated their determination to contain inflation, although San Francisco branch president Mary Daly told Reuters a half-point hike in September could be enough.
“Expectations that the Fed would back away from tightening have been refuted by almost everyone over the past 48 hours, with officials suggesting that rate hikes will continue at a fairly aggressive pace,” said ING’s Rob Carnell .
“This message hasn’t gotten through to the stock market which is backed by a reasonably strong set of earnings and pretty decent economic data and thinks that’s great rather than doing what it wants should do and say that [le discours de la Fed est] quite worrying,” added the research leader.
THE FOLLOWING VALUES:
Following Societe Generale’s solid quarterly results on Wednesday, Crédit Agricole released better-than-expected results thanks to a record level of investment banking activity in the second quarter as market volatility led to strong demand for covers.
ON WALL STREET
The New York Stock Exchange closed sharply higher on Wednesday as strong earnings forecasts from Paypal (+9.25%) and CVS Health (+6.3) boosted investor confidence and helped lift the Nasdaq to all-time highs since early May .
The Dow Jones Industrial Average was up 1.29% to 32,812.50 points, the broader S&P 500 was up 1.56% to 4,155.12 points and the Nasdaq Composite was up 2.59% to 12,668.16 points .
Moderna is up about 16% after announcing a $3 billion share buyback program.
Regeneron Pharmaceuticals rose 5.9% after better-than-expected quarterly sales, while coffeehouse chain Starbucks rose 4% after reporting quarterly earnings that beat expectations.
Futures signal an open with little change.
In Tokyo, the Nikkei rose 0.69% in the wake of Wall Street and helped by strong corporate results.
Automaker Subaru rose 8.48% after its results and encouraging guidance, but its rival Toyota fell 2.99% after a stronger-than-expected fall in its quarterly operating profit.
Casio Computer rose 6.29% from current quarter earnings target, ahead of expectations, while Nintendo <7974.T> Gained 0.41% as the video game maker stuck to its full-year guidance despite a drop in quarterly Switch console sales.
In China, the CSI 300 is up 0.63% and the Shanghai SSE Composite is up 0.55% as investor attention turns to signs of accelerating infrastructure investment aimed at reviving the country’s economy.
The dollar is flat (-0.03%) against a basket of benchmark currencies after benefiting from comments from members of the Fed the previous day.
The euro is shown at $1.0157.
In the bond market, the US 10-year Treasury yield fell two basis points to 2.73% after hitting a two-week high of 2.851% on Wednesday, in response to hawkish comments from Fed members and the good surprise of the ISM services.
The ten-year-old German is stable at 0.858%.
Concerns over oil supplies helped prices rebound from their lowest level in six months the day before on the Energy Information Administration’s (EIA) announcement last week of an unexpected rise in crude oil and gasoline inventories in the United States.
Brent rose slightly to $96.55 a barrel and US light oil (West Texas Intermediate, WTI) to $90.54.
OPEC+, which brings together the Organization of Petroleum Exporting Countries and its allies, decided on Wednesday to raise its September production target by just 100,000 barrels a day, a setback for President Joe Biden after his trip to Saudi Arabia last month to help Riyadh convince to open the floodgates for lower prices.
(Laetitia Volga, edited by Kate Entringer)