Europe Heading for Recession, Like Wall Street – 24.05.2022, 08:28


EXIT IN EUROPE LIKE WALL STREET

Letitia Volga

PARIS (Reuters) – European stocks are expected to fall at the open on Tuesday, following Wall Street index futures and Asian markets amid continued global economic concerns.

Futures contracts are down 0.98% for the Paris CAC 40, 0.75% for the Dax in Frankfurt, 0.7% for the FTSE in London and 0.81% for the EuroStoxx 50.

European equities are expected to rebound as market sentiment continues to weigh on concerns about the impact of central bank policy and inflation on the global economy and business.

US group Snap warned of worsening macroeconomic trends, citing rising costs as well, which should prevent it from hitting its revenue and earnings guidance for this quarter.

Its stock price dropped sharply in trades after Wall Street closed, which should be felt in the US market at the open.

On the macro front, European mornings will be revitalized by the first results of S&P Global’s monthly surveys of eurozone purchasing managers, which could reveal more about the impact of inflation, the war in Ukraine and supply issues. on the morale of business leaders.

VALUES TO FOLLOW:

ON WALL STREET

The New York Stock Exchange should return to negative territory the next day after a sharp rebound supported by the banking sector and digital giants. [.NFR]

On Monday, the Dow Jones index added 1.98% to 31,880.24 points, the S&P-500 added 1.86% to 3,973.75 points, and the Nasdaq Composite rose 1.59% to 11,535.28 points.

Apple (+4.0%) and Microsoft (+3.2%), the heavyweights in the rankings, led the market growth, while JPMorgan added 6.2% after raising its (non-market) net interest income forecast in 2022, from which the entire banking sector suffered. won.

Futures contracts are signaling a decline of 0.73% for the Dow Jones, 1.19% for the Standard & Poor’s-500 and 1.82% for the Nasdaq.

The latter, with a strong tech component, should be particularly punished by Snap’s warning of its quarterly results.

After hours, the stock fell 31%. As a result, Alphabet shares lost 3.6%, while Amazon lost 2.2%.

IN ASIA

The Nikkei fell 0.94% to below 27,000 in Tokyo as US futures traded lower and investors scramble for new catalysts after the end of corporate reporting season.

Chinese markets also tumbled, led by financial and medical stocks on strong selling by foreign investors, as fears of slower growth prevailed over renewed promises of economic support from Beijing.

The CSI 300 and Shanghai SSE Composite fell 1.3%.

EXCHANGE/COURSE

The euro eased slightly but confirmed its return to over $1.065 after European Central Bank (ECB) president Christine Lagarde announced on Monday that the deposit rate could return above zero by the end of September, opening the door to the first rate hike in July.

The dollar, which regained its safe-haven status, rose 0.14% against a basket of benchmark currencies.

In the bond market, the yield on the 10-year US Treasury rose two basis points to 2.8369%.

Its German counterpart rose 2.5 points to 0.998%.

BUTTER

Oil prices are falling as fears of a possible recession curtailing consumption outweigh the prospect of tight global supply and rising demand in China amid Beijing’s promises to stimulate the economy.

The price of Brent crude fell 1.15% to $112.11 a barrel, while US light oil (West Texas Intermediate, WTI) fell 1.13% to $109.04.

(Written by Letitia Volga, edited by)

.