Stock market: what moves in the markets before Monday’s opening

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MARKET REVIEWS. European and US stock markets returned to calm on Monday after last week’s jump, while Hong Kong welcomed Beijing’s announcement of support measures for the real estate sector.

In Europe, the markets were gaining momentum. The New York Stock Exchange was expected to fall based on the futures contracts of the three major indices. The Nasdaq technology index had one of the best weekly performances of the year last week on the back of the release of a slowdown in US inflation.

Stock indexes at 7:45

Futures contracts Dow Jones posted a drop of 60.00 points (-0.18%) to 33,703.00 points. Futures contracts S&P500 it fell 11.50 points (-0.29%) to 3,988.75 points. Futures contracts Nasdaq recorded a drop of 55.50 points (-0.47%) to 11,792.50 points.

In London, the FTS extension 100 increased by 27.04 points (+0.37%) to 7,345.08 points. In Paris, the CCA 40 recorded an increase of 24.45 points (+0.37%) to 6,619.07 points. In Frankfurt the DAX extension gained 61.41 points (+0.43%) to 14,286.27 points.

In Asia, the Nikkei Tokyo fell 300.10 points (-1.06%) to 27,963.47 points. For its part the hang up Seng Hong Kong gained 294.05 points (+1.70%) to 17,619.71 points.

As for oil, the price per barrel of WTI extension American it fell US$1.03 (-1.16%) to US$87.93. The barrel of North Brent Sea it fell US$0.92 (-0.96%) to US$95.07.

The context

The data raised investor hopes for a slower pace of rate hikes by the US central bank, the Fed.

However, enthusiasm was waning on Monday as we heard central bankers and analysts repeating that it is too early to claim victory over inflation.

Hargreaves Lansdown analyst Susannah Streeter reports that one of the Fed governors, Christopher Waller, warned that “fighting inflation” is “still a tough battle to fight”, suggesting that an end to interest rate hikes may not be for now.

“It was always clear that it would be easy to bring inflation down from 9-10% to 4-5%. Bringing it down to 2% could be much more complicated and demand higher tariffs for longer,” warns SPI AM analyst Stephen Innes.

As a result, interest rates on US government bonds increased slightly.

After last week’s plunge, the US dollar appreciated 0.61% against the euro, to 1.0285 US dollars at around 7:35 am Quebec time. The US currency strengthened against the yen and the pound.

In Asia, Hong Kong shares closed higher after China announced stimulus measures for the real estate sector, a major contributor to China’s GDP, including credit support.

The country has experienced a boom in real estate since 1998 and developers have developed at high speed thanks to bank loans, but faced with their colossal indebtedness, the authorities have decided to stop it since 2020.

For Nomura’s Lu Ting, these measures are “the most crucial pivot since Beijing has significantly reduced funding for the real estate sector”. This plan comes in addition to the easing of some COVID-19 measures announced by Beijing on Friday.

Markets are also scrutinizing statements from the G20. Wednesday will see UK budget announcements.

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The German arms manufacturer Reinmetall (RGM.DE, +5.84%) wants to expand its ammunition business by taking over the Spanish company Expal Systems. The transaction is expected to close by the summer of 2023. The agreed purchase price is based on an enterprise value of 1.2 billion euros, Berenberg analysts note.

The head of the cryptocurrency platform Binanza said it is launching a recovery fund to limit the damage caused by the bankruptcy of its rival FTX, restoring some color to the price of bitcoin which rose 2.45% to $16,770.

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