Rise in sight in Europe, Apple and Amazon reassure, hope on the Fed

PARIS (Reuters) – The main European stock markets are expected to rise on Friday after the results and forecasts exceed expectations from Apple and Amazon while the contraction of the American economy for a second consecutive quarter continues to fuel the assumption that the Federal Reserve (Fed) is less aggressive for its next rate hikes.

The first indications available give an increase of 0.64% for the Paris CAC 40, 0.55% for the Dax Frankfurt, 0.21% for the FTSE London and 0.49% for the EuroStoxx 50.

Apple and Amazon gained 3.3% and 14.9% respectively in non-session trading in response to strong quarterly results and above-expected forecasts, both forecasting demand to remain strong despite inflation.

These announcements should benefit the Nasdaq in the first place, indicated for the moment up 1.36% by the “futures” Americans, while the Standard & Poor’s-500 could take 0.65% and the Dow Jones open the balance .

In Europe, the morning is again animated by the publications of companies with among others those of BNP Paribas, Renault, Herms and AstraZeneca.

The session will also be rich in indicators, mainly with the first figures for inflation in July and growth in the second quarter in the euro zone, at 09:00 GMT.

In the United States, gross domestic product contracted by 0.9% over the April-June period, after a 1.6% drop in the previous quarter, leading economists to wonder whether the world’s largest economy is already in recession or about to be.

For some observers, this new decline in GDP is rather good news because it could lead the Fed to be less restrictive in tightening its monetary policy.

AT WALL STREET

The New York Stock Exchange ended up on Thursday for a second consecutive session after the announcement of second-quarter GDP: the Dow Jones index gained 1.03% to 32,529.63 points, the S&P-500 took 1.21 % 4,072.43 points and the Nasdaq Composite advanced 1.08% 12,162.59 points.

With earnings season in full swing, growth forecasts have been revised upwards as more S&P-500 companies reported quarterly results that beat expectations.

Among them, the car manufacturer Ford whose title jumped 6.1% after the publication of a quarterly net profit better than expected.

Meta Platforms fell 5.2% after posting the first decline in quarterly revenue on Wednesday.

IN ASIA

After reaching a seven-week peak on Thursday, the Nikkei fell 0.24% on the Tokyo Stock Exchange.

On the earnings side, automaker Nissan dropped 5.23% after posting a 14% drop in quarterly operating profit due to chip shortages, anti-COVID restrictions in China and high commodity prices.

In China, the SSE Composite of Shanghai dropped 0.9% and the CSI 300 1.29% after Beijing refrained from recalling the growth target for 2022 after a meeting of the Communist Party, contenting itself with Indicate that the plan will strive for the best possible results.

“The Politburo meeting reinforces our view that stimulus will remain relatively restrained this year and that the economy will continue to operate well below potential in coming quarters,” said Julian Evans-Pritchard, an economist at Capital Economics.

RATES/EXCHANGES

On the bond market, the yields of ten-year Treasury bills fell slightly to 2.6613% after falling Thursday in session to the lowest in more than a month, 2.649%, in response to the unexpected drop in US GDP in the second quarter.

The dollar fell by 0.41% against a basket of other reference currencies and the single European currency rose to 1.021 dollar.

PETROLEUM

Oil prices move in a dispersed order between concerns about supply and those about a possible recession.

Brent lost 0.22% to 106.9 dollars a barrel and American light crude (West Texas Intermediate, WTI) took 0.17% to 96.58 dollars.

(Written by Laetitia Volga, spoken by Kate Entringer)

by Laetitia Volga

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