Wall Street, stable, awaits PCE inflation after reassuring European indicators – 09/27/2024 at 1:28 p.m.

Wall Street is expected to be relatively stable on Friday and the European stock markets are moving in the green at mid-session, with the markets positively welcoming the stimulus measures adopted by China and the indicators published in the euro zone before PCE inflation.

New York index futures suggest a stable opening on Wall Street, with the Dow Jones down 0.01%, while the Standard & Poor’s 500 declines 0.08% and the Nasdaq falls 0.22 %. In Paris, the CAC 40 rose 0.39% to 7772.39 points around 10:30 GMT. The Dax in Frankfurt strengthened by 0.75%, while the FTSE in London increased by 0.46%.

The pan-European FTSEurofirst 300 index gained 0.34%, the EuroStoxx 50 gained 0.43% and the Stoxx 600 grew by 0.32%.

Markets are suspended for the publication of US PCE inflation at 12:30 GMT, the US Federal Reserve having started its cycle of monetary easing to support job markets, with price dynamics appearing better under control.

An upward surprise would complicate the task of the central bank, which will have to lower rates without rekindling inflationary pressures, but a downward surprise could suggest more rapid easing.

The markets also welcome the latest recovery measures taken by China, as well as the encouraging tone of the central bank, believing that the stock markets will benefit sustainably from the asset purchase programs.

Furthermore, inflation fell more than expected in Spain and France in September, which encourages us to believe that inflationary dynamics are back under control.

“Disinflationary pressures remain powerful and inflation is expected, in the coming months, to be lower than initially expected. The fall in the price of oil, which is likely to be lasting, as well as positive developments in industry and services encourage optimism”, notes Sylvain Bersinger, chief economist of Asteres.

Sentiment indicators nevertheless confirmed the deterioration of industrial prospects in the euro zone.

“Weaker growth prospects and easing inflation concerns show that eurozone sentiment is changing, increasing pressure on the ECB to cut rates,” analysts say from ING

VALUES TO FOLLOW AT WALL STREET

Chinese stocks listed in the United States should once again be buoyed on Friday by China’s recovery measures while technology stocks could continue their positive momentum started yesterday following encouraging forecasts from Micron Technology.

The Costco Wholesale brand lost 1.3% in pre-opening after revealing Thursday a turnover of $79.70 billion for its fourth quarter, lower than analysts’ expectations.

VALUES IN EUROPE

Moncler gained 10.26% on Friday on the Milan Stock Exchange after announcing an agreement with LVMH which will seize 10% of Double R, a vehicle itself holding 15.8% of the Italian down jacket specialist. LVMH, for its part, climbs 2.05%.

Forvia rose 9.32%, the French automotive supplier having announced a drop in its annual forecasts for turnover and operating margin but also the acceleration of its plans to cut jobs in Europe.

Trigano takes 9.3%, the French motorhome specialist having announced to pay a second interim dividend after reporting on Thursday a 12.8% increase in its turnover for the 2023-2024 financial year.

Airbus lost 0.6% as slow deliveries in September fueled concerns about the planemaker’s ability to meet its revised annual target, industry sources and analysts reported.

RATES Rates are hesitant across the Atlantic awaiting the publication of PCE inflation.

The German ten-year yield fell by 2.1 bp to 2.151%, that of the two-year rate lost 0.9 bp to 2.103%.

The yield on the ten-year Treasury is stable at 3.7886%, while the yield on the two-year security increases by 0.4 bps to 3.6266%.

CHANGES

Currencies are relatively stable with the exception of the yen which is strengthening following the appointment of the new Japanese Prime Minister, who supports the central bank’s policy.

In Asia, the yen advanced 1.22% to 143.03 yen per dollar, the Australian dollar lost 0.07% to 0.689 dollars.

The dollar is stable against a basket of reference currencies, the euro erodes by 0.11% to 1.1164 dollars, and the pound sterling loses 0.18% to 1.3391 dollars.

OIL

The barrel rose slightly on Friday, the probable increase in Libya’s production being weighed against China’s new stimulus measures which should largely support demand. Brent rose by 0.21% to $71.75 per barrel, American light crude (West Texas Intermediate, WTI) rose by 0.25% to $67.84.

MAIN ECONOMIC INDICATORS ON THE AGENDA September 27:

COUNTRY GMT INDICATOR PERIOD PREVIOUS CONSENSUS

USA 12:30 p.m. August PCE inflation +0.1% +0.2%

– over one year +2.3% +2.5%

USA 2:00 p.m. September Sentiment Index 69.3 69.0*

Michigan (definitive)

*first estimate

(Written by Bertrand De Meyer and Corentin Chappron)