Wall Street on the decline ahead of inflation

 Wall Street on the decline ahead of inflation

Wall Street is expected to fall on Thursday, while the European stock markets are advancing at mid-session ahead of crucial inflation indicators in Germany and the United States.

Futures on New York indices suggest that Wall Street will open in the red, with the Dow Jones down 0.32%, while the Standard & Poor's 500 loses 0.27% and the Nasdaq 0.25%.

In Paris, the CAC 40 stagnated at 7,949.34 points around 11:55 GMT. Frankfurt's Dax gained 0.4% to set a new session record, while London's FTSE rose by 0.18%.

The pan-European FTSEurofirst 300 index and the Stoxx 600 are looking for direction, while the EuroStoxx 50 is down 0.12%.

The position of central banks, which stress that inflationary momentum justifies keeping rates at a restrictive level, will be put to the test on Thursday by the publication of German inflation at 13:00 GMT and US PCE inflation at 13:30 GMT.

In Germany, the consensus is for inflation to fall to 2.7% year-on-year in February, from 3.1% the previous month. A surprise cannot be ruled out: in France, the consumer price index harmonized to European standards published on Thursday came in at 3.1% in February, against 3.0% expected by the consensus, and 3.4% in January.

The European Central Bank's next meeting, on Thursday, will be an opportunity for the institution to clarify its position in the face of persistent inflation.

In the United States, the PCE indicator is also expected to fall, from 2.6% to 2.4% year-on-year in January, according to consensus.

Here again, a surprise cannot be ruled out, as the indicators of recent weeks, including CPI inflation and producer prices, point to a stronger price dynamic than expected by the markets.

WALL STREET STOCKS TO WATCH

Apple (NASDAQ:AAPL) plans to unveil plans to use generative artificial intelligence later this year, CEO Tim Cook said at the company's annual shareholders' meeting on Wednesday.

HP (NYSE:HPQ) missed Wall Street estimates for its first-quarter sales on Wednesday, driven by sluggish demand in the PC market.

STOCKS TO WATCH IN EUROPE

Air France-KLM (EPA:AIRF) reported an unexpected fourth-quarter operating loss on Thursday, weighed down by rising costs and disruptions caused by the conflict in the Middle East, sending the stock down 6.71%.

Nexity plunged 22.35% after releasing results on Wednesday marked by the real estate crisis in France, prompting it to launch a redundancy plan and cancel a dividend payment.

Eiffage (EPA:FOUG) (4.3%), Getlink (3.8%) and Neoen (EPA:NEOEN) (5.79%) rose after their results.

Aixtron fell 15.2% after the German manufacturer of semiconductor tools forecast a lower-than-expected 2024 margin and the unexpected cancellation of a major contract.

RATE

Yields rise in Europe amid uncertainty, and after slightly higher-than-expected HICP inflation in France.

The ten-year Treasury yield gained 3.7 bp to 4.3112%, while the two-year gained 4.7 bp to 4.6954%.

The German ten-year yield rose by 4.4 bp to 2.505%, while the two-year gained 4.3 bp to 2.9702%.

CHANGES

Dollar retreats ahead of PCE inflation figures.

The dollar is down 0.10% against a basket of reference currencies, the euro is treading water at $1.0838, and sterling is holding steady at $1.2655.

PETROLEUM

The barrel is hesitating as the latest figures from the Energy Information Administration show that US crude inventories rose by 4.2 million barrels last week, against a consensus of 2.7 million.