Stocks expected to fall in Europe after the fall of Wall Street – 05/19/2022 at 07:58


EUROPEAN STOCK MARKETS ARE EXPECTED TO FALL

Letitia Volga

PARIS (Reuters) – Major European stock markets are expected to open Thursday after falling Wall Street the day before, amid strong concerns about the impact on companies in particular of inflation and a central bank interest rate hike.

The first available data show a 0.61% drop in the Paris CAC 40, 0.65% in the Dax Frankfurt, 0.56% in the FTSE in London and 0.6% in the EuroStoxx 50.

European stocks tumbled more than 1% on Wednesday as lingering worries about the global economy wiped out health relief in China that supported stocks the day before.

The pullback was much stronger on Wall Street, where the S&P 500 and Dow Jones suffered their worst session since June 2020, on fears of a significant economic downturn as US Federal Reserve Chairman Jerome Powell expressed his resolve to bring inflation down.

The skyrocketing costs have not been without repercussions for companies, with U.S. retail group Target upset on Wednesday over poor results, citing supply issues and rising prices, concerns that echo those voiced by rival Walmart the day before.

“Tuesday’s rebound was too optimistic (…) It must be said that worries about inflation have never faded since the beginning of the year. The situation is “out of control,” said IG analyst Hebe Chen.

VALUES TO FOLLOW:

ON WALL STREET

On the New York Stock Exchange, the Dow Jones fell 3.57% to 31,490.07, the S&P-500 fell 4.04% to 3,923.68 and the Nasdaq Composite fell 4.73% to 11,418. ,15 points.

Shares of Target fell 25% after the company reported a halving of quarterly profit due to rising prices and warned of the risk of further deterioration in margins.

It was the worst session since the Black Friday crash of October 19, 1987, and saw the group’s market capitalization shrink by about $25 billion.

The number of building permits in April hit a five-month low, indicating a slowdown in the housing market due to rising mortgage rates.

Futures contracts open this Thursday dispersed, but with small gaps.

IN ASIA

After the events on Wall Street, the Nikkei index in Tokyo fell by 1.69%.

Stock markets in mainland China fell slightly, but Hang Seng in Hong Kong fell 2.52% under pressure from Tencent ({0700.HK;DSPLY_NAME}%), which announced that its quarterly profit had halved.

INDICATOR

In the bond market, government bond yields are rising again after falling a day earlier due to a return to safe-haven assets.

The 10-year Treasuries are back over two basis points – after losing more than eleven on Wednesday – to 2.9058%.

CHANGES

Safe-haven currencies are depreciating after a strong rise in the previous session due to growing concerns about global growth.

The dollar fell 0.17% against a basket of benchmark currencies, while the yen shed 0.47% against the US dollar.

The single European currency, for its part, takes 0.26% to $1.0493.

BUTTER

The oil market is trending higher as fears of insufficient global supply prevail over fears of a slowdown in economic growth.

In addition, the US Energy Information Administration (EIA) reported a decrease in US crude oil inventories last week, when they were expected to increase.

The price of Brent crude rose 1.03% to $110.23 per barrel, while US light oil (West Texas Intermediate, WTI) rose 0.38% to $110.01.

MAIN ECONOMIC INDICATORS OF THE MAY 19 AGENDA

COUNTRY RATE GMT PERIOD PREVIOUS CONSENSUS

USA 12:30 Unemployment Claims Week 200.000 203.00

May 14

USA 12:30 Philadelphia Activity Index May 16.0 17.6

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(Written by Laetitia Volga, edited by Nicolas Delam)

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