Wall Street expected to fall, Microsoft and Alphabet disappointed – 10/26/2022 at 1:57 p.m.


A trader at the Frankfurt Stock Exchange

by Laetitia Volga

PARIS (Reuters) – Stock markets in Europe, with the exception of the German Dax, retreated on Wednesday mid-session, and Wall Street should open in the red after the disappointing publications of several big names in the technology sector which revive fears over the impact of the economic downturn on businesses.

Futures contracts signal a slight decline for the Dow Jones, a decline of 0.68% for the Standard & Poor’s-500 and 1.73% for the Nasdaq.

The latter is likely to suffer from the disappointments caused by the quarterly results and forecasts of Microsoft and Alphabet, the first having published Tuesday evening its weakest sales growth in five years when the second saw its turnover penalized by the drop in income ads from its YouTube platform.

The announcements follow Friday’s warning from Snap, owner of social network Snapchat, of a slowing online advertising market as advertisers scale back their budgets in the face of inflation and interest rate hikes. .

In Paris, the CAC 40 lost 0.07% to 6,246.4 around 11:15 GMT. In London, the FTSE loses 0.36% and in Frankfurt, the Dax, supported by results, advances by 0.48%

The pan-European FTSEurofirst 300 index fell by 0.21%, the euro zone’s EuroStoxx 50 by 0.2% and the Stoxx 600 by 0.18%.

WALL STREET VALUES TO FOLLOW

Microsoft and Alphabet fell 6% in pre-market trading. In their wake, Amazon, Apple, Meta Platforms, Netflix and Tesla lost 0.5% to 4%.

VALUES IN EUROPE

In Europe, the technology sector is also suffering, its Stoxx index losing 1.74%.

In addition, the semiconductor equipment manufacturer ASM International fell 7.73% after announcing that recent US restrictions on the export of chips to China would weigh heavily on its sales in the country.

The results of Thales (+2.10%), Vinci (+1.74%), Atos (+9.52%) and Sodexo (+2.30%) were well received.

But not those of Dassault Systèmes (-4.35%), Heineken (-8.19%), Reckitt Benckiser (-5.10%), WPP (-2.89%) and Barclays (-1.16%) .

Excluding results, Orpea lost 34.88% after announcing the opening of an amicable conciliation procedure in order to renegotiate its debt with its creditors.

RATE

Yields on government bonds in the eurozone are rising on the eve of the European Central Bank meeting after which markets are expecting the announcement of a three-quarter point rate hike.

The ten-year Bund yield gained three basis points to 2.188% and the two-year yield, sensitive to rate expectations, nearly six basis points to 1.998%. In the United States, the yield on ten-year Treasuries, at 4.0608%, continues to fall.

The release of below-expected indicators for house prices, consumer confidence and manufacturing is fueling speculation that the pace of Federal Reserve rate hikes will slow after its meeting next week.

CHANGES

For this same reason, the dollar retreated 0.68% against a basket of international currencies. The euro took the opportunity to rise to more than a dollar for the first time since September 20.

The pound remains trending higher after Rishi Sunak’s appointment as Britain’s Premier.

OIL

The decline in the dollar provides support for oil prices: Brent gained 0.24% to 93.74 dollars a barrel and American light crude (West Texas Intermediate, WTI) gained 0.5% to 85.75 dollars.

NO MAJOR INDICATOR ON THE DAY’S AGENDA

(Written by Laetitia Volga, edited by)

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