(ABM FN-Dow Jones) European stocks will again face a lower opening on Tuesday, after heavy losses on Wall Street on Monday.
IG foresees an opening loss of 261 points for the German DAX, a minus of 125 points for the French CAC 40 and a decline of 74 points for the British FTSE 100.
Stock markets in Europe fell further on Monday.
“As Russian aggression in Ukraine continues, the risk of further escalation is fueling investor turmoil,” said Generali Investments macro strategist Thomas Hempell.
The German DAX index has now fallen 20 percent from its peak in January, or a so-called “bear market”.
“As oil and natural gas prices skyrocket and concerns about its impact on global economic growth mount, the specter of stagflation is hovering over financial markets,” Hargreaves Lansdown said.
The Russian invasion of Ukraine has drawn attention to Europe’s reliance on Russian energy, hitting the European stock market amidships. This is clearly visible in Germany, where investors are selling shares for fear that the German economy will be hit hard by expensive energy. Germany gets more than half of its energy from Russia.
On a macroeconomic level, it was relatively quiet in Europe on Monday. The European Central Bank’s interest rate decision will follow later this week.
According to economist Bert Colijn of ING, it is difficult to draw conclusions about how the war will affect the economy in the eurozone, but a scenario of stagflation threatens the outlook of the ECB.
Company news
In London’s FTSE, travel stocks like IAG and TUI, and banks like Lloyds and Barclays were heavy losers Monday.
Shares of banks are also under fire elsewhere in Europe. ING, BNP Deutsche Bank, ING, BNP Paribas and KBC lost 3 to 7 percent.
Automakers also struggled. Stellantis, for example, became more than 6 percent cheaper.
BP and Shell benefited from the higher oil price on Monday, with gains for shares of 4 and more than 8%, respectively. Commodity producers such as Glencore and BHP also gained ground.
Weapons manufacturer BAE Systems rose more than 7 percent and Thales became about 6.5 percent more expensive.
Price fighter Wizz Air, focused on central Europe, lost more than 6.5 percent on Monday after the company revised its expectations for capacity growth. Flights to and from Ukraine and Russia have been suspended and four planes are still stuck in Ukraine, waiting for a chance to fly out of the country safely.
Euro STOXX 50 3,512.22 (-1.2%)
STOXX Europe 600 417,13 (-1,1%)
DAX 12.834,65 (-2,0%)
CAC 40 5,982.27 (-1.3%)
FTSE 100 6,959.48 (-0.4%)
SMI 11,204.67 (-0.8%)
AEX 669,04 (-0,4%)
BEL 20 3,682.48 (-2.1%)
FTSE MIB 22.160,28 (-1,4%)
IBEX 35 7.644,60 (-1,0%)
US EQUITIES
US futures predict a red open on Tuesday.
The US stock markets ended significantly lower on Monday, with the Dow Jones index ending up in a correction and the Nasdaq in a bear market.
The war in Ukraine continues to shape sentiment and fuel oil prices soaring.
The west, led by the United States, is considering an embargo on Russian oil. The White House said on Monday evening that President Biden has not yet made a decision.
Massimo Bonisoli, an analyst at the Italian broker Equita, warns that this is a difficult task.
Oil cartel OPEC tries to increase production by 400,000 barrels per day every month, but in practice hardly succeeds.
WTI oil became more than 3 percent more expensive on Monday at more than $119 and Brent now even costs $123 a barrel.
According to market analyst Michael Hewson of CMC Markets, high oil prices are fueling concerns about a possible global recession.
“It’s hard to see much upside for stock markets against a backdrop of continued escalation,” the market expert said, referring to the war in Ukraine.
At Carmignac, they fear stagflation, or a slowdown in the economy combined with high inflation. And, according to the French investor, a lack of raw materials could further exacerbate disruptions in the supply chain, with all the negative consequences that this entails.
On a macroeconomic level, Monday was calm. Investors are especially interested in the US inflation rate on Thursday, according to market analyst Naeem Aslam of AvaTrade.
The Federal Reserve faces the enormous challenge of controlling inflation by tightening monetary policy, but must guard against slowing growth and derailing stock markets, Aslam said.
Company news
Exxon Mobil rose about 3.5 percent in line with oil prices. Chevron finished more than 2 percent higher.
Uber Technologies on Monday raised its first-quarter profit forecast as demand for taxi rides and food delivery recovers rapidly from the omikron outbreak late last year. The stock fell about 4 percent.
Intel has filed an IPO application for Mobileye with the US Securities and Exchange Commission. The documents filed with the SEC are for the time being confidential and not available for public consultation. At the end of December, Intel already announced plans for an IPO of Mobileye. The stock fell half a percent.
Shares of Bed Bath & Beyond closed a whopping 36 percent after it became known that GameStop chairman Ryan Cohen had taken a large stake in the retailer. Cohen urges the company to explore strategic alternatives, including a sale.
S&P 500 index 4.201,09 (-3,0%)
Dow Jones index 32.817,38 (-2,4%)
Nasdaq Composite 12.830,96 (-3,6%)
ASIA
Asian stocks were in the red on Tuesday, although losses were relatively limited.
Nikkei 225 24.799,91 (-1,7%)
Shanghai Composite 3.342,43 (-0,9%)
Hang Seng 21,013.25 (-0.2%)
EVALUATE
The euro/dollar was trading at 1.0859 this morning. As the US markets closed on Monday, the currency pair moved at 1.0870.
USD/JPY Yen 115,48
EUR/USD Euro 1,0859
EUR/JPY Yen 125,40
MACRO-AGENDA:
08:00 Industrial Production – January (Ger)
11:00 Economic growth – Fourth quarter final. (EUR)
12:00 SME Business Confidence – February (US)
14:30 Trade Balance – January (US)
16:00 Wholesale Stocks – January (US)
COMPANY NEWS:
13:00 Campbell – US Q2 Figures
22:00 AMC Entertainment – Fourth Quarter Figures (US)
10:00 PM Oracle – US Third Quarter Figures
Bron: ABM Financial News
From Beursplein 5, the editors of ABM Financial News keep a close eye on developments on the stock exchanges, and the Amsterdam stock exchange in particular. The information in this column is not intended as professional investment advice or as a recommendation to make certain investments.
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