Photo of the logo of Euronext, the operator of the Paris Stock Exchange, in the La Défense district of Paris
PARIS (Reuters) – Major European stocks are expected to fall on Monday after Wall Street tumbled on Friday in reaction to monthly U.S. employment statistics that raised hopes of a slowdown in rate hikes as much that next week is likely to fuel both fears of persistent inflation and recession.
Geopolitical news could also encourage markets to be cautious following the announcement of several explosions in Kyiv and several cities in western Ukraine two days after the Crimean bridge explosion.
Index futures suggest a drop of 1.03% for the Paris CAC 40, 0.91% for the Frankfurt Dax, 0.57% for the London FTSE 100 and 1.01% for the EuroStoxx fifty.
Volumes could be reduced by the absence of some US investors, being the US holiday although Wall Street will be open.
The monthly US employment report released on Friday, marked by a moderate decline in job creation, a drop in the unemployment rate and a 5% year-over-year increase in wages, disappointed those who expected signs of deterioration. of economic conditions. prompting the Fed to curb rate hikes.
Result: A further three-quarter point rally in early November is now seen as nearly 90% likely by the FedWatch real-time barometer.
The European Central Bank (ECB) could also opt for a hike of 75 basis points on October 27 and the Bank of England could go up to 100 points, or even more, after the turbulence of recent weeks.
“We are in the midst of the largest and most synchronized tightening of global monetary policies in more than 30 years,” said Bruce Kasman, director of economic research at JPMorgan, for whom “persistently high inflation and an increasingly clear awareness of the The need to slow down the labor market should lead central banks to new important decisions”.
The week that begins will be animated successively by the new economic forecasts of the International Monetary Fund (IMF) on Tuesday, by the figures for producer prices (Wednesday) and consumer prices (Thursday) in the United States, and by the beginning of the the publication of results on Wall Street on Friday with those of four of the main American banks.
ON WALL STREET
The New York Stock Exchange closed sharply lower on Friday after the release of the monthly jobs report and the warning from Advanced Micro Devices, two headwinds for technology and growth stocks.
The Dow Jones Industrial Average fell 2.11%, or 630.15 points, to 29,296.79, the Standard & Poor’s 500 lost 103.90 points, or 2.77%, to 3,640.62 and the Nasdaq Composite lost 420, 91 points (-3.80%) to 10,652.41.
The S&P of technology stocks fell 4.14%, penalized both by the prospect of a rise in the cost of credit and disappointing announcements from AMD, which lost 13.9%.
For the entire week, the Dow rose 1.99%, the S&P-500 1.51% and the Nasdaq 0.73% after three consecutive weeks of decline.
Index futures suggest a lower open of around 0.5% so far.
The Tokyo Stock Exchange is closed, the day is a public holiday in Japan.
In China, where markets were closed for a week for the national holiday, the Shanghai SSE Composite fell 1% and the CSI 300 1.51%.
China’s semiconductor index fell 6.48% after Washington imposed new restrictions on high-tech exports.
Hesitating at the beginning of the day, the dollar rose again against the other major currencies (+0.05%).
The euro is trading again at $0.973, its lowest level since September 29.
The yuan fell again after the closing week of the Chinese markets, down to 7.112 per dollar. The Caixin-S&P Global China services PMI released on Saturday showed a contraction in activity in the sector for the first time since May.
Benchmark yields in the eurozone are little changed in first trade after Friday’s sharp rise in reaction to US employment: German 10-year yields shown at 2.187%, two-year yields at 1.857%.
The oil market is undergoing profit-taking after hitting a five-week high on the prospect of a sharp OPEC+ supply cut.
Brent fell 0.55% to $97.38 a barrel and US light crude (West Texas Intermediate, WTI) fell 0.57% to $92.11.
Both had reached their highest level since August 30 at the start of the day.
(Written by Marc Angrand, edited by Kate Entringer)
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