THE EUROPEAN SCHOLARSHIPS DRIVE INTO RED AT MID-SESSION
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PARIS (Reuters) – Wall Street is expected to drop on Friday and European stock markets plunge into the red mid-session, the climate in the markets clouded by concerns over the economic impact of the pandemic as well as by the blocking of post-Brexit talks and further US stimulus measures.
New York index futures point to a Wall Street opening down around 0.7%.
In Paris, the CAC 40 lost 1.09% to 5,488.99 around 12:15 GMT. In Frankfurt, the Dax is down 1.74% and in London, the FTSE is down 0.95%.
The pan-European FTSEurofirst 300 index drops 1.24%, the Eurozone EuroStoxx 50 is down 1.36% and the Stoxx 600 1.21%, its lowest since November 20.
The prospect of UK-EU trade talks failing continues to emerge after Boris Johnson admitted a ‘strong possibility’ the two sides could not reach a deal beyond of December 31.
In the event of a break without agreement, the investment bank Morgan Stanley expects a drop from 6% to 10% of the large Footsie 250 index and a fall of 10% to 20% of the shares of British banks, the Bank of England then being more likely to lower its key rate into negative territory.
The negotiations on the American stimulus plan are also at an impasse. House Speaker Nancy Pelosi said congressional officials could work to resolve their differences until December 26, when a series of emergency aid programs are due to expire.
The meeting is also weighed down by the setback suffered by the Sanofi and GSK laboratories in the development of their vaccine against COVID-19: it will not be available before the last quarter of next year given the unsatisfactory results at the ‘adult.
VALUES TO FOLLOW AT WALL STREET
On the good news side, Pfizer and BioNTech have obtained the green light from an independent expert committee of the Food and Drug Administration (FDA) on their vaccine candidate, which should lead the United States to approve its use. .
In trading before Wall Street opened, Pfizer gained nearly 2%.
VALUES IN EUROPE
All European compartments are down, from the industrial services sector, where the Stoxx index lost 0.6%, to the telecoms sector, which lost 3.08%.
Ericsson is down 6.09% after filing a lawsuit against Samsung in the United States for breach of contractual commitments on the payment of royalties and patent infringement.
Also among the biggest drops in the Stoxx 600, Rolls-Royce dropped 7.72% after lowering its cash consumption target for this year and warned that its outlook remained uncertain.
Sanofi is down 1.92% after the shift in the schedule of its vaccine. In London, however, GSK gained 0.28%.
CHANGES / RATES
Risk aversion pushes the dollar up against a basket of international currencies and pulls bond yields down.
That of the Bund lost three basis points to -0.637% and its US equivalent nearly two points to 0.8882%.
The euro fell 0.15% against the dollar after Thursday’s gains, when the ECB announced a new stimulus cycle deemed insufficient by some investors.
The pound sterling fell 0.84% against the dollar, to a low of more than three weeks, and 0.68% against the euro, as traders reassess the risk of a “no deal” between London and Brussels at the end of the transition period.
OIL
Oil prices are falling slightly but are expected to follow a sixth week of gains, the rollout of coronavirus vaccination programs having fueled hopes for a rebound in demand next year.
Brent lost 0.5% to 50 dollars a barrel and US light crude 0.3% to 46.64 dollars.
(Laetitia Volga, edited by Marc Angrand)
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