The suspense Powell limits risk-taking

by Marc Angrand

PARIS (Reuters) – Wall Street is expected to be stable on Wednesday after the records set the day before and the European stock markets, except for Frankfurt, are advancing timidly at mid-session, the uncertainty on the tone of the speech to be delivered by the President of the Federal Reserve on Friday US policy urging investors to be cautious.

Futures contracts on major New York indices are signaling virtually unchanged open. The Standard & Poor’s 500 on Tuesday set its fiftieth record of the year and posted a new closing high like the Nasdaq, continuing to benefit from the final FDA green light to the COVID-19 vaccine from Pfizer-BioNTech and hopes of improving the health situation in the United States.

In Paris, the CAC 40 gained 0.21% to 6,678.49 points around 11:00 GMT and in London, the FTSE 100 took 0.21% but in Frankfurt, the Dax dropped 0.18%.

The EuroStoxx 50 index rose 0.12%, the FTSEurofirst 300 by 0.04% and the Stoxx 600 by 0.06%.

The intervention of Fed Chairman Jerome Powell on Friday at 2:00 p.m. GMT at the Jackson Hole (online) symposium will be expected to be the highlight of the week for markets, due to uncertainties over developments. economic growth in the United States in the coming months and that of monetary policy.

48 hours before this meeting, the news on the global economy and the evolution of the pandemic therefore leaves investors almost indifferent: in Europe, the announcement in the morning of a more marked drop than expected in the morale of business leaders in Germany according to the Ifo index only really weighed on the trend in Frankfurt.

It is true that the European economy remains generally favorable, as suggested by Luis De Guindos, one of the members of the Governing Council of the European Central Bank (ECB), citing a probable upward revision of the forecasts for the European Central Bank (ECB). institution next month.

On the equity side, 18 strategists polled by Reuters in recent days predict that earnings growth will allow the Stoxx 600 to end the year close to its current level despite monetary and health uncertainties.

See as well:

* Global profits are expected to decline 8% in Q3

VALUES TO FOLLOW AT WALL STREET

VALUES IN EUROPE

The prospect of seeing vaccine booster campaigns promoting a return to normalcy in tourism and leisure continues to favor European values ​​in the sector: their Stoxx index has gained 1.68%, the highest for nearly two weeks. IAG won 1.93%, TUI 2.04%, Accor 1.36%.

Banks are benefiting from the rise in bond yields, like Societe Generale (+ 1.58%) or Santander (+ 1.40%).

On the downside, Inditex (-1.38%, the worst performance of EuroStoxx 50) suffers from Deutsche Bank’s sell recommendation.

RATE

The yield on ten-year US Treasuries rebounded 1.30% for the first time in a week, confirming the rally in recent days ahead of Jerome Powell’s speech.

Eurozone yields are also benefiting from Luis de Guindos’ statements on the region’s economic outlook: the ten-year German Bund yield takes three basis points to -0.447%, the highest since August 13.

CHANGES

Hesitant at the start of the day, the dollar started to rise again against the other major currencies (+ 0.10%) and remains above the one-week low hit on Tuesday.

The euro fell slightly, around $ 1.1745.

OIL

The oil market erases the losses suffered at the start of the day on profit taking after two days of marked increase which had allowed it to recover nearly 8% and to erase most of the losses of the previous seven sessions.

Brent gained 0.14% to $ 71.15 per barrel after falling to $ 70.50 and US light crude (West Texas Intermediate, WTI) 0.06% to $ 67.58 after falling below $ 67.

Figures from the American Petroleum Institute (API) showing a smaller than expected drop in oil stocks in the United States last week helped profit taking.

(Edited by Blandine Hénault)