People walk past a Wall Street sign near the New York Stock Exchange
couple Pauline Foret
Wall Street is expected to rise while European stock markets advance at mid-session, investors seeing themselves invigorated by Chinese macroeconomic data and the possibility of further rate cuts from the Federal Reserve in 2025. New York index futures signal an opening of Wall Street in the green, indicating an advance of 0.34% for the Dow Jones, 0.31% for the Standard & Poor’s-500 and 0.37% for the Nasdaq. In Paris, the CAC 40 gained 1.12% to 7,719.96 points around 11:59 GMT. In Frankfurt, the Dax rose by 0.98% and in London, the FTSE 100 rose by 1.28%.
The EuroStoxx 50 index is up 0.76%, the FTSEurofirst 300 is up 0.65% and the Stoxx 600 is up 0.68%.
After long weeks marked by the dizzying rise in bond yields, their decline this week, coupled with data above expectations on Chinese growth and company results considered positive, allowed the markets to regain their composure.
Federal Reserve member Christopher Waller said Thursday he can’t rule out the possibility that the central bank will make three or four rate cuts in 2025. Just days ago, investors had all but given up hope that a single rate cut over the entire year.
As a result, Treasury yields, which are the focus of market attention less than a week before Donald Trump’s inauguration and after his Treasury Secretary Scott Bessent’s confirmation hearing, lost more than 20 basis points since the start of the week.
The choice of Scott Bessent, who is expected to maintain control of the American debt, had already triggered a rally on American bonds at the end of last November. As the yields moved in the opposite direction to the price of the bonds, they then fell by more than 6 basis points in a single session.
In China, GDP exceeded expectations by climbing 5.4% in the fourth quarter, also showing an increase of 5% over the year in line with expectations despite the concerns that have been plaguing the markets for several months about the health of the second largest economy in the world.
In terms of corporate results, the season was launched with a bang by the major American banks which allowed the American indices to experience their most marked increase on Wednesday since the day of the presidential election.
In Europe, inflation in the euro zone increased by 2.4% in December 2024 as expected by consensus. On the other hand, the surprise decline in British retail sales dealt a further blow to the morale of investors across the Channel, dragging down the pound sterling and Gilt yields.
VALUES IN EUROPE
English banks are moving forward after the BoE postponed Basel rules on bank capital for a year. Barclays gained 1.82%, Lloyds Banking Group 1.01%, Natwest 1.11% and HSBC 0.64%.
In Paris, Virbac and Argan gained 2.52% and 4.01% respectively after the publication of their results and their outlook for 2025.
-RATE
Treasury bond yields continue to fall on Friday after remarks deemed reassuring by Christopher Waller of the Fed on the possibility that it will make three or four rate cuts in 2025 and the confirmation hearing of Scott Bessent.
The yield on ten-year Treasuries fell by 1.3 bps to 4.5925% and two-year Treasuries by 0.8 bps to 4.2297%.
The yield on the ten-year German Bund immediately fell 2.4 bp to 2.4980%, the two-year 1.2 bp to 2.2180%.
The UK Gilt also weakened after the UK retail sales data, losing 5.1 bps to 5.1930%.
CHANGES
The dollar is stable this Friday, with investors focusing their attention on the inauguration of Donald Trump and the ensuing announcement of his first political decisions.
The greenback gains 0.09% against a basket of reference currencies, while the euro remains stable at $1.0299.
The pound sterling, weighed down by the latest British macroeconomic data, fell by 0.26% against the dollar and by 0.22% against the euro.
OIL
Oil prices were relatively stable on Friday but on track to end their fourth consecutive week in the green after the latest sanctions imposed by the United States on Russian oil exacerbated the risks of supply chain disruptions.
Brent is stable at $81.29 per barrel and American light crude (West Texas Intermediate, WTI) gains 0.2% to $78.84.
(Written by Pauline Foret, edited by Augustin Turpin)
