EQUITIES ARE ON THE RISE, GEOPOLITICAL RISK IS COOLING
by Laetitia Volga
PARIS (Reuters) – Wall Street is expected to rise and European stocks rose slightly mid-session on Wednesday, the risk of an escalation between the United States and China seems contained for now, while bond yields rise as reaction to the determination shown. by members of the Federal Reserve to curb inflation.
Futures contracts are signaling a gain of 0.36% for the Dow Jones and 0.44% for the Standard & Poor’s-500 and the Nasdaq.
In Paris, the CAC 40 gained 0.38% to 6,434.38 around 11:50 GMT. In Frankfurt, the Dax gained 0.21% and in London, the FTSE gained 0.1%.
The pan-European FTSEurofirst 300 index rose 0.13%, the Eurozone EuroStoxx 50 0.51% and the Stoxx 600 0.25%.
US House Speaker Nancy Pelosi has left Taiwan after a brief visit during which she showed US support and solidarity for Taiwanese democracy, drawing the ire of Beijing.
Although China has ordered military exercises around Taiwan, investors hope Beijing’s response will remain purely demonstrative, helping global stocks rally.
“Nancy Pelosi’s visit did not provoke a truly aggressive response from the Chinese authorities,” said AFS analyst Arne Petimezas.
This relative relief from observers seems to prevail for the moment over the macroeconomic disappointments of the morning, the fears of a possible world recession and the declarations of several presidents of regional offices of the Fed, determined to fight inflation.
“Most stock indices remain strong so far in August and investors continue to rejoice in a positive earnings season that has seen companies show resilience in an uncertain economic environment,” said Pierre Veyret of ActivTrades.
“However, bull market drivers are few and far between, particularly in the medium and long term, and investors will likely need more clarity on where economies are headed before driving equity prices to new highs.” “added the analyst.
VALUES IN EUROPE
At the head of the CAC 40, Axa takes 5.84% after publishing a net profit that rises 3% in the first half and Société Générale gains 3.05% after reporting a lower than expected loss in the second quarter.
Veolia has dropped 2.84% after its results.
In Frankfurt, Commerzbank is down from 1.84% over BMW down from 5.92% after recent results that Infineon posted 2.46% after the quarterly results were published on the basis of attention and perspectives from business figure.
Tod’s shoots up 20.29%, after the founding family and main shareholder announced that it was going to launch a takeover bid for part of the shares it does not yet own in order to take the luxury group out of the market.
Benchmark government bond yields rose after comments seen as dovish from Fed officials, who raised the possibility that the institution could raise rates significantly further to contain inflation.
The ten-year US bond rose four basis points to 2.7829% and its German equivalent rose nine points to 0.876%.
“It is clear that Fed officials believe that market participants have gone too far in lowering their rate hike expectations,” the MUFG analysts said. “The Fed’s ‘hawkish’ comments had an immediate impact.”
In the foreign exchange market, the dollar is practically stable against a basket of reference currencies.
The euro is trading around $1.018, up 0.16%, despite the contraction of the PMI indices and the drop in retail sales in the euro zone.
Oil prices are rising ahead of OPEC+ announcements following a meeting in which producing countries are expected to discuss a modest increase in supply of around 100,000 barrels a day, according to a document seen by Reuters, while that the United States expects a larger increase. .
Brent gained 0.43% to $100.97 a barrel and US light crude (West Texas Intermediate, WTI) 0.56% to $94.95.
(Written by Laetitia Volga, edited by Kate Enterringer)
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