Caution on equities, decline in commodities – Boursorama

by Marc Angrand

PARIS (Reuters) – Wall Street is expected to close to balance on Wednesday as European stock markets move in dispersed order at mid-session, in a context marked both by the drop in oil prices and persistent tensions linked to the inflation and optimism over corporate results despite some disappointments.

Futures contracts on the main New York indices signal an almost unchanged opening for the Dow Jones as for the Standard & Poor’s 500 and the Nasdaq.

The S&P 500 finished higher for the fifth consecutive session Tuesday with a gain of 0.74% which brought it to less than 0.6% of its high of September 2, a level likely to encourage some investors to caution.

In Paris, the CAC 40 lost 0.06% to 6,665.93. points around 11:00 GMT. In London, the FTSE 100 is practically stable while in Frankfurt, the Dax is up 0.11%.

The EuroStoxx 50 index is up 0.05% while the FTSEurofirst 300 and the Stoxx 600 are up 0.14%.

After several weeks dominated by soaring energy prices and fears that inflation will force the major central banks to tighten their policies prematurely, investors are now giving priority to earnings publications, on the lookout for signs on the impact of rising costs and tensions in supply chains.

The market is counting on a 47.6% rebound in third-quarter Stoxx 600 profits according to the latest Refinitiv-IBES figures.

VALUES TO FOLLOW AT WALL STREET

The session on Wall Street will be animated among other things by the results of Verizon and Netflix, while waiting for those of IBM and Tesla after the close.

VALUES IN EUROPE

In Europe, the stock market trend was slowed down above all by the commodities sector, whose Stoxx index fell by 1.67% with the fall in the prices of most base metals (-3.19% for copper, -1.69% for aluminum).

Among the large mining groups, Antofagasta lost 2.64%, Rio Tinto 3.44% and BHP 1.25%.

In the news of the results, Kering accuses the blow of the disappointing sales of its flagship brand Gucci in the third quarter: the title gives up 3.84%, the largest drop in the CAC 40.

Another sanctioned publication: that of ASML (-1.87%), the Dutch specialist in semiconductor manufacturing equipment, whose forecasts below the expectations of some analysts obscure quarterly above the consensus.

On the upside, Nestlé gained 3.38% after having revised upwards its annual forecast for organic growth.

RATE

The ten-year Treasury bill yield hit a new six-month high of 1.673%, confirming that concerns about tightening monetary policies remain.

Investors will therefore watch the Federal Reserve’s Beige Book to be published at 18:00 GMT, on which the central bank will rely for its meeting in November, potentially decisive for the launch of the “tapering”.

On the European market, benchmark yields, which rose in early trading, fell back to -0.12% for the ten-year German Bund.

CHANGES

Hesitant at the start of the day in the face of renewed risk appetite, the dollar is now trending upwards against other major currencies (+ 0.08%).

It thus touched a new high of four years against the yen at 114.69 and the euro again gives ground, to 1.1631 dollars against more than 1.1650 before the opening of the European markets.

The British pound, for its part, retreats after figures below consensus inflation in the United Kingdom in September.

OIL

The oil market continues to widen its losses after the declarations on Tuesday of the Chinese authorities on a possible control of coal prices, the rise of which is one of the main causes of the surge in the price of the barrel in recent weeks.

Brent dropped 1.14% to $ 84.11 a barrel and US light crude (West Texas Intermediate, WTI) 1.16% to $ 82.00.

(Report Marc Angrand, edited by Blandine Hénault)