Stocks without a clear trend, oil recovers, focus on rates
By Claude Chenjou
PARIS (Reuters) – Wall Street is expected to be little changed on Tuesday, with European shares trading on a mid-session undecided note amid cheap raw material purchases, the day after indexes fell on worries. About the state of health in China.
New York index futures on Wall Street indicated gains of 0.14% for the Dow Jones, 0.21% for the Standard & Poor’s 500 and 0.08% for the Nasdaq. In Paris, the CAC 40 was down 0.16% at 6,623.71 around 12:05 GMT. In Frankfurt, the Dax index gained 0.01%, and in London, the FTSE gained 0.57%.
The pan-European FTSEurofirst 300 index is up 0.24%, the euro zone’s EuroStoxx 50 index is up 0.02%, and the Stoxx 600 is up 0.31%.
A bold revival of risk appetite in Europe was led by energy (+4.15%) and basic resources (+2.36%), which were heavily weighed down by the risk of weaker demand in China a day earlier. Increase in cases of COVID-19.
While the situation in China has not improved, as Beijing closed parks, malls and museums on Tuesday while other cities resumed mass coronavirus testing, investors are now turning more to interest rates in hopes of a lull on that front.
Cleveland Federal Reserve Chairwoman Loretta Mester on Monday night spoke in favor of a reduced interest rate hike in December, and other US Federal Reserve (Fed) officials will speak on Tuesday, when the central bank is due to release its latest monetary policy minutes. policy meeting on Wednesday.
While investors are hoping for clues in the Fed’s “minutes” on the future rate path, markets are currently pricing in a limited 50bp rate hike from the Fed next month.
In the euro zone, where the European Central Bank (ECB) is also due to publish its “minutes” on Thursday, the debate revolves around a 50 or 75 basis point increase in interest rates. A Reuters poll of economists predicts a half-point rate hike. Robert Holzmann, one of the members of the ECB’s Executive Board, said on Tuesday that he had not yet decided on the matter, but that he was in favor of a three-quarter point increase if inflation was expected. does not decrease in the region.
As for the evolution of the economy, the OECD on Tuesday ruled out the scenario of a recession in the world economy next year, while predicting that the current energy crisis will cause a sharp slowdown, especially in Europe.
The European Union, still divided over solutions to the gas crisis, is due to debate on Thursday the European Commission’s proposed one-year cap on the price of this energy, according to draft regulations seen by Reuters.
VALUES IN EUROPE
Energy and basic resources stocks posted some of the strongest gains as Saudi Arabia rejected plans to increase output, as The Wall Street Journal previously reported.
In Paris, TotalEnergies, Vallourec, ArcelorMittal or even Maurel & Prom get between 1.65% and 6.92%.
In London, BP, Anglo American, Glencore and Rio Tinto rose from 1.32% to 5.89%.
Enel gains 1.36% In Rome, the energy company announced a plan to write off 21 billion euros worth of assets as it seeks to reduce debt.
In Frankfurt, activist fund Thyssenkrupp fell 4.7% after Cevian cut its stake in the German group to less than 1%.
Bond yields rose slightly in Europe after the latest statements by the two members of the ECB, which were interpreted differently. Robert Holzmann said he favored a rate hike of more than 75 basis points, and Mario Centeno pleaded for an increase of less than that magnitude.
Ten-year German Bund yield increased by 2.3 points to 2.004%.
The yield on ten-year Treasury bonds in the United States fell 3.6 points to 3.791%.
STOCK EXCHANGES In the foreign exchange market, the dollar fell by 0.33% against a basket of international currencies punished by the return of risk appetite.
Taking advantage of the opportunity, the euro rose to $1.0265 (+0.23%), while the pound sterling was bought at $1.1872 (+0.43%).
Oil prices benefited from Saudi Arabia’s denial of a possible output increase, but gains were capped by a downgrade of crude demand forecasts by several analysts given the COVID-19 outbreak in China.
Brent rose by 1.48% to $88.74 a barrel, and American light oil (West Texas Intermediate, WTI) rose by 1.5% to $81.24 a barrel.
(Writing by Claude Chendjou, Editing by Kate Entringer)