by Laetitia Volga
PARIS (Reuters) – Wall Street is expected to fall back on Friday at the opening and European stock markets are in the red at mid-session, market nervousness around the battle between hedge funds and small carriers as well as supplies of vaccines against COVID-19 cutting investor appetite for risky assets.
New York index futures signal a Wall Street opening down around 0.6% for the Dow Jones, 0.8% for the S & P-500 and 1% for the Nasdaq.
In Paris, the CAC 40 lost 1.07% to 5,451.84 points around 12:50 GMT. In Frankfurt, the Dax gave up 0.93% and in London, the FTSE dropped 1.1%.
The pan-European FTSEurofirst 300 index falls by 0.98%, the EuroStoxx 50 of the zone euro 1.08% and Stoxx 600 1.04%.
The latter could show its worst week in three months, in part because of the turmoil caused by a coalition of retail investors who decided to fight against hedge funds betting on the decline of troubled values.
“All hedge funds will be looking carefully at all short selling after this week and regulators will be looking very carefully at collective investments,” Deutsche Bank analysts said.
The uneven deployment of COVID vaccines also weakens the economic outlook.
The European Medicines Agency (EMA) is to announce today whether it approves the AstraZeneca vaccine, developed jointly with the University of Oxford.
The less pronounced than expected contraction of the French economy in the fourth quarter and the surprise growth of German gross domestic product are a little reassuring but are not enough to reverse the trend of the markets.
VALUES TO FOLLOW AT WALL STREET
In the pre-market on Wall Street, GameStop rebounded by 90% and AMC gained more than 60% after brokers Robinhood and Interactive Brokers relaxed restrictions on transactions in certain stocks very much surrounded by small holders.
On the earnings side, the industrial group Caterpillar gained more than 3% in pre-market transactions after posting a smaller-than-expected drop in profit in the fourth quarter.
VALUES IN EUROPE
In Europe, M6 climbs 9.32% after information from Reuters according to which the German Bertelsmann approached potential candidates including Vivendi and Altice Europe for a possible sale of its controlling stake in the media group.
JCDecaux takes 2.98% despite the drop in its quarterly turnover in adjusted organic data.
The telecommunications sector is the only one to remain in the green (+ 1%) thanks to the Swedish Ericsson which gained 10.44% and took the lead of the Stoxx 600 after having published an operating profit above expectations in the fourth quarter thanks to strong sales of 5G equipment.
In decline, the ready-to-wear group H&M yields 3.63% after the fall in its annual profit and pessimistic forecasts for the current quarter.
EXCHANGES / RATES The dollar stabilizes against a basket of international currencies while theeuro is moving above 1.214 after sources told Reuters the European Central Bank (ECB) is unlikely to lower its deposit rate further.
In the bond market, the ten-year Bund yield gained more than three basis points to -0.507% and its US equivalent gained nearly two points to 1.074%.
OIL
The oil market is on the rise despite concerns over demand caused by the coronavirus variants and the slow rollout of vaccines.
Brent gained 0.74% to $ 55.94 per barrel and US light crude (West Texas Intermediate, WTI) 0.27% to $ 52.48.
(edited by Patrick Vignal)
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