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The rise should continue in Europe, the BoE to follow

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by Laetitia Volga

PARIS (Reuters) – The main European stock markets are expected to rise moderately at the opening on Thursday in the wake of Wall Street, as solid economic data and company results contributed to the attraction of investors for risky assets.

Futures contracts give an increase of 0.16% for the Parisian CAC 40, 0.35% for the Dax in Frankfurt, 0.12% for the FTSE in London and 0.16% for the EuroStoxx 50 .

The European market should start the session on the same trend as the day before after the good reception reserved for the results of several large groups and the announcement of a surprise acceleration of the ISM of services in the United States which has reinforced the idea that the US economy is not in recession despite the drop in GDP in the first half.

The day will be punctuated by new company results and monetary policy announcements from the Bank of England, which could raise its key rate by 50 basis points according to most investors and analysts.

On the side of the Federal Reserve, other officials on Wednesday affirmed their determination to curb inflation although Mary Daly, president of the San Francisco branch, told Reuters that a hike of half -point might be sufficient in September.

“Expectations that the Fed is backing away from monetary tightening have been demolished over the past 48 hours by almost everyone, with officials suggesting that rate hikes will continue at a fairly aggressive pace,” he said. said Rob Carnell at ING.

“That message hasn’t trickled down to the equity market, which is lingering over a reasonably strong earnings streak and pretty decent economic data and thinking this is great, instead of doing what it wants. should do and say that [le discours de la Fed est] quite worrying,” added the research manager.

VALUES TO FOLLOW:

Following Societe Generale’s solid quarterly results on Wednesday, Crédit Agricole released better-than-expected results in the second quarter thanks to a record level of activity in investment banking, as market volatility led to strong demand for cover.

AT WALL STREET

The New York Stock Exchange ended sharply higher on Wednesday as strong earnings forecasts from Paypal (+9.25%) and CVS Health (+6.3) fueled investor confidence and helped lift the Nasdaq to a record since early May.

The Dow Jones Industrial Average gained 1.29% to 32,812.50 points, the broader S&P-500 gained 1.56% to 4,155.12 points and the Nasdaq Composite advanced 2.59% to 12,668, 16 dots.

Moderna jumped about 16% after announcing a $3 billion share buyback program.

Regeneron Pharmaceuticals climbed 5.9% after doing better-than-expected quarterly revenue while coffeehouse chain Starbucks rose 4% after reporting quarterly profit that beat expectations.

Futures are signaling an open with little change.

IN ASIA

In Tokyo, the Nikkei advanced 0.69% in the wake of Wall Street and supported by good corporate results.

Automaker Subaru climbed 8.48% after its results and its encouraging forecast but its competitor Toyota fell 2.99% after the sharper than expected drop in its quarterly operating profit.

Casio Computer rose 6.29% on a current-quarter profit target above expectations while Nintendo gained 0.41% as the video game maker maintained its full-year guidance despite falling quarterly sales of the Switch console over a year.7974.t>

In China, the CSI 300 rises 0.63% and the Shanghai SSE Composite gains 0.55%, as investors’ attention turns to signs of accelerating infrastructure investment aimed at reviving the economy from the country.

CHANGES

The dollar is unchanged against a basket of reference currencies (-0.03%) after having benefited the day before from statements by members of the Fed.

The euro is displayed at 1.0157 dollars.

RATE

In the bond market, the yield on ten-year US Treasuries fell two basis points to 2.73%, after hitting a two-week high on Wednesday at 2.851% in reaction to “hawkish” comments from members of the Fed and to the good surprise of the ISM services.

The ten-year German is stable at 0.858%.

OIL

Concerns about oil supply contributed to the rebound in prices, which the day before hit their lowest levels in six months due to the announcement by the Energy Information Administration (EIA) of an unexpected increase in crude oil inventories and gasoline in the United States last week.

Brent rose slightly to $96.55 a barrel and US light crude (West Texas Intermediate, WTI) to $90.54.

OPEC+, which brings together the Organization of the Petroleum Exporting Countries and its allies, decided on Wednesday to raise its September production target by just 100,000 barrels per day, a setback for President Joe Biden after his trip to Saudi Arabia on last month to convince Riyadh to open the floodgates to lower prices.

(Laetitia Volga, editing by Kate Entringer)

Source: www.challenges.fr

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