Wall Street expected to be in the red, Europe falls with PMIs and the rise of the dollar

Wall Street expected to be in the red, Europe falls with PMIs and the rise of the dollar
Wall Street expected to be in the red, Europe falls with PMIs and the rise of the dollar

(Reuters) – Wall Street is expected to fall on Friday and European stock markets are also falling mid-session, with technology and banks under pressure.

The dollar is climbing and investors are digesting data on private sector activity in the euro zone before the publication of their American equivalents this Friday. New York index futures signal Wall Street opening down 0.06% for the Dow Jones, 0.08% for the Standard & Poor’s-500 and 0.04% for the Nasdaq. In Paris, the CAC 40 lost 0.49% to 7,633.40 points around 11:01 GMT. In Frankfurt, the Dax fell 0.50% and in London, the FTSE 100 lost 0.58%.

The EuroStoxx 50 index fell by 0.69%, the FTSEurofirst 300 by 0.63% and the Stoxx 600 by 0.64%.

Stock markets are opting for caution to close the week, with banks and the technology sector particularly suffering, while the session was rich in macroeconomic indicators for investors to digest and the appreciation of the dollar weighs on stocks.

The STOXX 600, the European benchmark index, is, however, poised for modest weekly gains, after falling more than 2% last week, when markets were shaken by French President Emmanuel Macron’s announcement to early legislative elections.

On the macroeconomic front, the morning was busy with the publication of indicators on private sector activity in the euro zone and Great Britain.

S&P Global/HCOB purchasing managers surveys show that private sector activity slowed in June in Germany, and weak demand weighed on economic activity in France. In the euro zone, growth in business activity also slowed sharply this month due to the drop in demand, the first since February.

The publication of this data, which reflects the economic slowdown in the euro zone and could argue in favor of a further cut in key rates from the European Central Bank (ECB), pushes down government bond yields across the board. from the continent.

In the United States, markets are awaiting the release of the S&P Global PMI for the private sector at 1:45 p.m. GMT and housing resales data at 2:00 p.m. GMT for more clues on the health of the world’s largest economy.

VALUES TO FOLLOW AT WALL STREET

Nvidia fell 1.5% in pre-market trading after losses from the previous session brought its market valuation below that of Microsoft.

VALUES IN EUROPE

On the STOXX 600, the banking sector (-1.53%) continues to suffer from political uncertainty in France. French banks Société Générale, BNP Paribas and Crédit Agricole are all down on Friday.

The technology sector fell by 1.2% after its recent gains.

The strength of the greenback is also weighing down the basic resources (-0.6%) and energy (-0.5%) compartments. In Paris, Atos, very volatile, plunged 13%. The group said Thursday evening that the goal of reaching a definitive financial restructuring agreement with the Onepoint consortium and financial creditors by July 2024 remained unchanged.

In Frankfurt, Varta fell 2%, the German battery manufacturer having announced Thursday evening a downward revision of its turnover forecast for this year.

Elsewhere in Europe, the Danish brewer Carlsberg fell 6.7% after the British group Britvic (+5.6%) rejected its takeover offer.

RATES Euro zone government bond yields fell on Friday after the publication of PMI surveys on euro zone private sector activity, which showed greater weakness than expected, which could argue for a further decline key rates of the European Central Bank (ECB).

Surveys suggest “that a solid recovery of the euro zone economy is not a given,” said Franziska Palmas, an analyst at Capital Economics.

The ten-year German Bund yield, benchmark in the euro zone, lost 6.8 basis points to 2.3560% and its two-year equivalent fell by 7.1 basis points to 2.7510%.

In France, the yield on the ten-year OAT, recently under pressure due to political turbulence, dropped 3.5 basis points to 3.1189%.

In the United States, the yield on ten-year Treasuries fell 2.6 basis points to 4.2283%

CHANGES

In the foreign exchange market, the dollar gained 0.22% against a basket of benchmark currencies, as the Federal Reserve’s approach to reducing interest rates contrasted with reductions or more optimistic outlooks in other countries. other countries, such as Switzerland or the United Kingdom.

The euro for its part lost 0.19% to 1.0680.

OIL

Oil prices vary little on Friday but should record a second week in the green against a backdrop of signs of improving demand and a drop in crude stocks in the United States.

Brent fell 0.04% to $85.68 per barrel and American light crude (West Texas Intermediate, WTI) lost 0.01% to $81.28.

(Some data may have a slight lag)

(Written by Diana Mandiá)

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