EQUITIES ARE ON THE RISE, GEOPOLITICAL RISK REFRESHED
by Laetitia Volga
PARIS (Reuters) – Wall Street is expected to rise and European stocks rose slightly mid-session on Wednesday, the risk of an escalation between the United States and China seeming contained for the time being, while bond yields rise in reaction to the determination shown by members of the Federal Reserve to stem inflation.
Futures contracts are signaling a gain of 0.36% for the Dow Jones and 0.44% for the Standard & Poor’s-500 and for the Nasdaq.
In Paris, the CAC 40 gained 0.38% to 6,434.38 around 11:50 GMT. In Frankfurt, the Dax took 0.21% and in London, the FTSE gained 0.1%.
The pan-European FTSEurofirst 300 index rose 0.13%, the Eurozone EuroStoxx 50 0.51% and the Stoxx 600 0.25%.
Speaker of the US House of Representatives Nancy Pelosi left Taiwan after a short visit during which she showed US support and solidarity for Taiwanese democracy, arousing the ire of Beijing.
Although China has ordered military maneuvers around Taiwan, investors expect Beijing’s response to remain purely demonstrative, helping global stocks rally.
“Nancy Pelosi’s visit did not elicit a truly aggressive response from the Chinese authorities,” said AFS analyst Arne Petimezas.
This relative relief of the observers seems to prevail for the moment on the macro-economic disappointments of the morning, the fears of a possible global recession and the declarations of several presidents of regional offices of the Fed, determined to fight inflation. .
“Most equity indices remain strong so far in August and investors continue to rejoice in a positive earnings season that has seen companies show resilience in an uncertain economic environment,” said Pierre Veyret at ActivTrades.
“However, bull market drivers are few and far between, particularly in the medium to long term, and investors are likely to need more clarity on where economies are headed before pushing stock prices to new highs.” , added the analyst.
VALUES IN EUROPE
At the head of the CAC 40, Axa takes 5.84% after the publication of a net profit up 3% in the first half and Societe Generale gains 3.05% after reporting a lower loss than expected. in the second trimester.
Veolia is down 2.84% after its results.
In Frankfurt, Commerzbank is up 1.84% but BMW is down 5.92% after their results while Infineon wins 2.46% after publishing quarterly results above expectations and raising its outlook for turnover.
Tod’s soars by 20.29%, the founding family and main shareholder having announced that it was going to launch a public tender offer for part of the shares it does not yet hold in order to get the luxury group out of the market. rating.
RATE
Yields on benchmark government bonds rose after comments deemed restrictive by Fed officials, who raised the prospect of further significant rate hikes by the institution to contain inflation.
That of the ten-year American gains four basis points to 2.7829% and its German equivalent climbs nine points to 0.876%.
“It is clear that Fed officials believe market participants have gone too far in lowering their rate hike expectations,” MUFG analysts said. “The Fed’s ‘hawkish’ comments had an immediate impact.”
CHANGES
On the currency market, the dollar is practically stable against a basket of reference currencies.
The euro is trading around $1.018, up 0.16%, despite the contraction of the PMI indices and the drop in retail sales in the euro zone.
OIL
Oil prices are rising ahead of OPEC+ announcements after a meeting in which producing countries are expected to discuss a modest increase in supply of around 100,000 barrels per month. day, according to a document seen by Reuters, while the United States hopes for a larger increase.
Brent gained 0.43% to $100.97 a barrel and US light crude (West Texas Intermediate, WTI) 0.56% to $94.95.
(Written by Laetitia Volga, Editing by Kate Entringer)