Stock market: what moves on the markets before the opening Monday

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European stock markets retreated on Monday, in the wake of their Chinese counterparts after another round of regulatory tightening from Beijing, and on the cusp of a week which will be dominated by the meeting of the US Federal Reserve (Fed).

The clues

In the US, around 7.15am, Wall Street was heading for a lower opening. Futures contracts Dow Jones were down 130 points, or 0.37%, to 34,821 points. Those of S&P 500 decreased by 12 points, or 0.28%, to 4,391 points while those of the Nasdaq lost 30 points, or 0.2%, to 15,067 points.

In Europe, markets were down at mid-session. In London, the FTSE 100 yielded 0.29%. In Paris, the CAC 40 left 0.31% and in Frankfurt, the DAX dropped 0.5%.

The Chinese stock markets have suffered greatly after the Chinese authorities, already in the midst of reframing their technological giants, this time toughened their tone against the lucrative education sector.

The Stock Exchange Hong Kong was the hardest hit (-4.1%) while that of Shanghai lost 2.3%.

On the other hand, the Bourse de Tokyo stayed away from the uproar (+ 1.04%) after the successful launch of the Olympics.

The context

“The current profit taking induced in part by the pressure on Chinese technology stocks should not last long,” said Sébastien Galy, analyst at Nordea Investment. Thus “the earnings season in the United States and the continuation of the cyclical rebound, albeit at a slower pace”, continue to support the markets, creating an environment favorable to risk, according to him.

A certain caution should, however, continue ahead of the meeting of the US Federal Reserve (Fed), whose decision is expected Wednesday evening.

Inflation will again be on the menu of the US Central Bank, but also questions about the upcoming timetable for the reduction of monetary support, against a backdrop of growing concerns related to the Delta variant.

On the bond market, European rates continued to decline on Monday, with the German ten-year rate – benchmark for the euro zone – moving to the lowest since February.

On the statistical side, the morale of German entrepreneurs in July experienced its first decline since January due to the shortage of raw materials and fears about a new rise in COVID-19 infections.

In the United States, new home sales for June will complete today’s agenda.

On the oil side

At around 7.15 am, the price of a barrel of US WTI fell 0.58% to US $ 71.65 and a barrel of North Sea Brent lost 0.43% to US $ 73.78.


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