European stocks expected to rise, rebound in sight on Wall Street

EUROPEAN SHARES EXPECTED UP, REBOUND IN VIEW ON WALL STREET by Marc Angrand PARIS (Reuters) – Major European stocks are expected to start in the green on Thursday on the prospect of a rebound in Wall Street and solid progress in Tokyo , but investors will have to contend with both continued concerns about China and the impact of a new round of earnings releases. Index futures suggest a rise of 0.31% for the CAC 40 in Paris, 0.25% for the Dax in Frankfurt, 0.28% for the FTSE 100 in London and 0.21% for the EuroStoxx 50. While major US indices look set to rebound after a choppy session with Netflix’s tumble, investors remain concerned about both the prospect of an accelerated US interest rate hike and by that of a more marked than anticipated slowdown in the Chinese economy. On this last point, the Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, warned at a symposium devoted to Asia on the risks of seeing prolonged confinements in China weigh on the world economy. Shanghai authorities have announced that health restrictions will continue as the number of COVID-19 cases in neighborhoods not subject to quarantine has started to rise again. On the side of the Fed, the Beige Book confirmed on Wednesday that businesses were still facing high inflation and labor shortages and Mary Daly, the president of the San Francisco branch, considered the “solid” arguments in favor of a half-point rate hike on May 4. The day’s session will be moderated by publications from Nestlé, Akzo Nobel and AT&T, among others, but also by the final figures for inflation in the euro zone and by interventions from Jerome Powell, the President of the Fed, and Christine Lagarde, his counterpart from the European Central Bank (ECB), on the occasion of the spring meetings of the IMF and the World Bank. A WALL STREET The New York Stock Exchange ended in disarray on Wednesday, with the Nasdaq losing ground in the wake of the fall of Netflix the day after the publication of the online video giant’s disappointing quarterly results, which made investors wary of growth stocks. The Dow Jones Index gained 0.71%, or 249.59 points, to 35,160.79 but the Standard & Poor’s 500 lost 2.76 points (-0.06%) to 4,459.45 and the Nasdaq Composite lost fell 166.59 points (-1.22%) to 13,453.07. Netflix plunged 35.1% after reporting a drop in subscriber numbers in the first quarter, which is expected to grow in the coming months. Conversely, the Dow Jones benefited from the solid results of Procter & Gamble (+2.66%) and IBM (+7.1%). Futures on major New York indices so far suggest an open up 0.31% for the Dow Jones, 0.33% for the Standard & Poor’s 500 and 0.46% for the Nasdaq . IN ASIA On the Tokyo Stock Exchange, the prospect of a Nasdaq rebound benefited technology stocks and the Nikkei index ended up 1.23%, its third positive close in a row. The mood is very different in China, where concerns over lockdowns and geopolitical risks are weighing on the trend: the Shanghai SSE Composite lost 1.81%, the CSI 300 1.52% and in Hong Kong, the Hang Seng yields 1.92%. The oil giant CNOOC nevertheless made a successful debut on the Shanghai Stock Exchange, its share trading nearly 30% above its IPO price. RATES Yields on US Treasuries are rising again in Asian trading in the aftermath of the fall caused by bargain buying and strong demand at a 20-year bond auction. The ten-year recovered more than three basis points to 2.8708% after losing more than ten on Wednesday, and the two-year rose almost four points to 2.6195%. On Wednesday, both had reached their highest level since December 2018 at the start of the session before heading down. The European bond market follows the movement in the first exchanges: the ten-year German takes four points to 0.904%. EXCHANGES The dollar is falling again against the other major currencies (-0.03%), with traders playing it safe before the meeting of G20 finance ministers, which could give some of them the opportunity to comment on the situation. recent exchange rate developments. The euro, at 1.0855, is virtually unchanged against the greenback. The Chinese yuan, meanwhile, is at its lowest for more than six months against the dollar, with several forex traders explaining that foreign investors anticipate a further depreciation of the Chinese currency. OIL The oil market is trending higher after Libya announced a cut in production of more than 550,000 barrels per day (bpd) due to blockades at several fields and export terminals. Brent gained 1.39% to 108.28 dollars a barrel and US light crude (West Texas Intermediate, WTI) 1.34% to 103.56 dollars. (edited by Nicolas Delame)