Stock hesitancy, yields continue to rise – 09/15/2022 13:10

Stock hesitancy, yields continue to rise – 09/15/2022 13:10

Stock hesitancy, yields continue to rise – 09/15/2022 13:10

A trader works on the New York Stock Exchange (NYSE)

A trader works on the New York Stock Exchange (NYSE)

PARIS (Reuters) – Wall Street is expected to drop slightly as European stocks move in dispersed order in mid-session on Thursday as investors appear to want to pause amid the turmoil of the past few days and a new set of US economic indicators before the Federal meeting Reserve next week.

Futures contracts on major New York indices currently indicate a decline of 0.23% for the Dow Jones, 0.22% for the Standard & Poor’s 500 and 0.38% for the Nasdaq.

In Paris, the CAC 40 lost 0.41% to 6,196.69 points around 11:00 GMT and in Frankfurt the Dax was down 0.09% while in London the FTSE 100 gained 0.26%.

The EuroStoxx 50 index is down by 0.17% but the FTSEurofirst 300 and Stoxx 600 are practically stable.

The broad European Stoxx 600 index fell 2.8% in the previous two sessions after better-than-expected inflation data in the US reignited fears about rising Federal Reserve interest rates.

While Fed officials remain silent less than a week after the monetary policy meeting, those at the European Central Bank (ECB) continue to emphasize the need for further rate hikes, much like the institution’s Vice President, Luis de Guindos, for which “determined action is essential to maintain the anchoring of inflation expectations”.

The remainder of the session will be animated by, among other things, US jobless claims, retail sales and industrial production data.

Wall Street could also find support in the announcement of a draft agreement between employers and unions in the rail transport sector, a sector threatened by a massive strike since Saturday, which has prompted the White House to take the negotiations in hand.

WALL STREET VALUES TO FOLLOW

VALUES IN EUROPE

The strongest sector increase of the day in Europe is for banks, whose Stoxx index gains 1.28%, thanks among other things to Spanish stocks, which benefit from press information that Madrid could modify a tax that is levied on the sector to avoid a dispute with the ECB.

Santander earns 2.63%, Bankinter 3.67%, Sabadell 4.41%.

On the downside, H&M returns 1.84% after quarterly sales below expectations.

RATE IT

US Treasury yields remain bullish: the 10-year brings more than three basis points to 3.4528% and the two-year nearly five points to 3.8288% after a new 15-year high of 3.846%.

Markets continue to favor the hypothesis of a three-quarter point hike in Fed rates next Wednesday, but the estimated probability of a 100 point hike is around 30%.

In Europe benchmark yields also rose, to 1.753% for the ten-year and to 1.518% for the German two-year.

CHANGES

The dollar returned higher after spending part of the session in the red against the other major currencies (+ 0.13%), with expectations of a US rate hike giving it solid support.

The euro thus returned to $ 0.9979 after having regained parity for a short time.

The yen erases some of the rebound caused Wednesday by speculation about a possible direct intervention by the authorities in the currency market.

OIL

The oil market is once again affected by fears of a deterioration in demand and the strength of the dollar.

Brent lost 0.94% to 93.22 dollars a barrel and US light crude (West Texas Intermediate, WTI) by 1.01% to 87.59 dollars.

(Written by Marc Angrand)

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