After posting its largest drop in a month, the Paris Bourse is expected to stabilize on Tuesday, in the wake of the rebound in US index futures and a relative lull in Asia this morning. One of the main events of the day will be the debut on the stock market of UMG, the music division of Vivendi, not to mention the opening of a two-day session of the Fed’s monetary policy committee. Around 8:30 am, the October futures contract on Cac 40 gained 0.2%.
In Asia, the Japanese Nikkei 225 closed down 2.2% on Tuesday, the day after a public holiday in Japan, aligning with the region’s slippage the day before. Chinese markets remained closed on Tuesday. In Hong Kong, the Hang Seng was balanced late in the session, while Evergrande stabilized after plunging 12% on Monday. The group said they were confident on Tuesday in their ability to come out of their “darkest” period.
While some observers fear that the fall of the real estate giant could turn into “Chinese Lehman Brothers”, analysts consider this comparison excessive, arguing that the impact of Evergrande’s financial woes is limited to the country’s borders, even whether it could potentially have a contagion effect on the entire industry and, ultimately, on the Chinese economy. The only thing that is really surprising about this case is why the Chinese authorities have allowed things to deteriorate so badly, asks Michael Hewson, chief market analyst at CMC Markets.
The real test is due on Thursday with some $ 84 million in interest due as Standard & Poor’s said the developer is on the verge of default.
US index futures are back at around 0.6% after the Dow Jones and S&P 500 suffered their biggest drop since May. In fact, bargain buys late in the session allowed the broad index to finish above its lows yesterday.
The US Federal Reserve begins a two-day meeting of its monetary policy committee on Tuesday, which is expected to lay the groundwork for reducing its asset purchase program by $ 120 billion per month. Jerome Powell will hold his traditional press conference Wednesday at 8:30 pm, but all eyes will be on the central bank’s new projections for rate hikes, or “dot plot,” a dot chart reflecting committee members’ estimates. The Fed chairman has indicated that the “tapering” could come this year, but investors are waiting for more details, especially since the last set of mixed indicators.
On the macroeconomic front, the OECD will unveil its forecasts for the world economy and the G20 countries at 11 a.m. The afternoon will be animated by housing starts and building permits in the United States last month.
Vivendi. The initial price of Universal Music Group (UMG) on the Amsterdam Stock Exchange has been set at 18.50 euros per share, Euronext said. The group controlled by Vincent Bolloré plans to distribute 60% of UMG’s capital to its current shareholders, 18% of which will go directly to the businessman.
Alstom – Plastic Omnium. The railway and automotive suppliers have announced the signing of a memorandum of understanding for the development of high-end hydrogen storage systems for the rail sector.
Carmat has announced that it has performed the first implantation of his Aeson artificial heart in a woman. The group said the operation took place in Louisville, United States, and involved a 57-year-old patient with severe biventricular heart failure, who had already undergone heart surgery several years ago.
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