Wall Street is expected to open higher on Friday, while European stock markets also show gains, buoyed by energy-related sectors despite a challenging week amid uncertainties regarding the tight U.S. presidential election. Key data on U.S. employment is anticipated, with concerns over tech stocks and geopolitical tensions in the Middle East influencing market sentiment. Oil prices are rising due to fears of retaliatory strikes from Iran against Israel, impacting energy stocks positively.
(Reuters) – Wall Street is expected to open higher on Friday, with European markets also seeing gains at midday following a dip the previous day. The indexes are being bolstered by energy-related stocks, although they are still on track to experience their worst week in nearly two months. This cautious sentiment from investors is largely due to the anticipation of a tightly contested U.S. presidential election.
Futures for New York indexes suggest an increase of 0.43% for the Dow Jones, 0.42% for the S&P 500, and 0.47% for the Nasdaq.
In Paris, the CAC 40 is up 0.79% at 7,408.51 points around 12:00 GMT. Frankfurt’s DAX has gained 0.66%, while London’s FTSE 100 is up 0.97%.
The EuroStoxx 50 has risen by 0.85%, the FTSEurofirst 300 is up 0.91%, and the Stoxx 600 has also increased by 0.91% after a decline of more than 1% the previous day.
Stock markets are recovering gains towards the end of a week characterized by uncertainties surrounding the U.S. presidential election and a wave of corporate earnings reports that have dampened market sentiment. Concerns over investments in artificial intelligence led to a drop in technology stocks on Thursday.
Oil prices continue to rise due to fears of escalating tensions in the Middle East, particularly regarding potential retaliatory actions from Iran against Israel. This has positively impacted energy stocks, with the Stoxx energy sector gaining 1.58%.
The American news outlet Axios reported on Thursday, based on two unidentified Israeli sources, that Iran may launch an attack on Israel from Iraq in the coming days.
With a light macroeconomic agenda and fewer corporate earnings reports in Europe on Friday due to the All Saints’ Day holiday, focus shifts to the United States. Investors are awaiting the monthly employment report at 12:30 GMT, the presidential election on November 5, and the next Federal Reserve (Fed) meeting on November 6 and 7.
The employment report is expected to indicate an increase of 113,000 jobs in October, a significant drop from September’s numbers, influenced by disruptions caused by hurricanes and aerospace labor strikes, which will complicate data analysis.
Employment and unemployment figures will be released just days before the Fed’s meeting next week, which is expected to result in a 25 basis point rate cut—a scenario that, according to JPMorgan strategist Max McKechnie, will remain unshaken by the upcoming data.
Politically, markets have been leaning towards a Republican victory for Donald Trump against Democrat Kamala Harris for several weeks. However, with the race for the White House tight, this has led to a reluctance to take on additional risks.
STOCKS TO WATCH ON WALL STREET
Amazon is up 5.8% in pre-market trading after posting better-than-expected earnings and sales for the third quarter, which has reassured markets following the company’s earlier cautious outlook this year.
EUROPEAN STOCKS
Société Générale, which saw a significant rise on Thursday after reporting better-than-expected third-quarter results, is up 3.6% following a rating upgrade from Morgan Stanley, marking the best performance in the CAC 40.
Viridien is down 1.2%, as the group specializing in subsurface exploration reported a 3% decline in revenues over the first nine months on Thursday.
The German meal kit company HelloFresh has risen by 4.9% following a rating upgrade from J.P. Morgan.
In Amsterdam, Universal Music Group is up 2.7% after releasing its quarterly results.
The travel sector has seen a slight decline of 0.16%, primarily due to a 2.3% drop in Lufthansa shares after HSBC downgraded its rating from ‘buy’ to ‘hold.’
BONDS
American bond markets are experiencing slight gains on Friday, as investors await the U.S. employment report and next week’s presidential election.
The yield on 10-year Treasuries has increased by 0.5 basis points to 4.2887%, while two-year notes are up 3.3 basis points to 4.1992%.
In the eurozone, yields have stabilized after reaching several weeks’ highs on Thursday, with investors betting on a slowdown in the pace of rate cuts by central banks