(ABM FN) The Brussels stock exchange will have a sharply lower opening on Wednesday. On Tuesday, the star index ended 1.0 percent lower at 3,630.30 points.
European stock markets are in for a sharply lower opening, with investors becoming much more cautious in their expectations about the number of interest rate cuts this year, following comments from various Fed and ECB members.
Fed director Christopher Waller said in a speech on Tuesday that the US central bank is likely to cut interest rates this year, but that there is no rush to do so. City Index market analyst Matt Simpson noted that the market is now considering four cuts in 2024, compared to an expectation of five cuts previously.
“A hawkish mood is dominating markets this year and comments from Waller appear to only further reinforce this sentiment,” said economist James Reilly of Capital Economics.
“It seems that the first quarter of this year could be marked by the realization that it is too early for central banks to cut rates unless something really negative happens, such as another banking crisis, real estate crisis or other debt crisis,” they said. analysts from Swissquote Bank.
Bank of America outlined an extreme scenario on Tuesday, in which none of the major central banks will cut interest rates this year. Such a scenario seems unrealistic, but cannot be completely ruled out, according to Bank of America, which is already pricing in fewer interest rate cuts due to persistent inflation, resilient economies and labor markets with limited flexibility.
Meanwhile, the Chinese economy is cooling down considerably. In 2023, the country’s economy grew by 5.2 percent, which is the slowest growth in decades. A day earlier, Prime Minister Li Qiang warned in Davos that growth would be lower.
The growth figure was higher than the 5 percent target set by the Chinese government, after a year of considerable volatility and changes in expectations. Moreover, it is expected that it will be difficult for the Chinese economy to maintain the current growth rate, given the reluctance among policymakers to come up with large support packages.
The Asian stock markets were therefore under considerable pressure this morning, especially the Hang Seng index, which fell by more than 3.5 percent.
Other points of interest today include eurozone inflation figures and US retail sales data.
Oil prices traded volatile on Tuesday, while the dollar strengthened. At a settlement of $72.40, a barrel of West Texas Intermediate ultimately became 0.4 percent cheaper.
That weakness will likely be “short-lived as the situation in the Red Sea appears to be quite unstable,” said Tariq Zahir of Tyche Capital Advisors. Currently, the strong US dollar is contributing to the weakness in oil, according to the market expert.
“The oil market still appears to be waiting for evidence of actual supply disruptions before supporting a rising oil price, even as hostilities continue to rise in the Middle East and Iran becomes a bigger player,” Ritterbusch analysts wrote.
“For commodity markets, the increased tension poses risks to supply, with energy markets being the most vulnerable. However, for oil and LNG we do not yet see any fundamental impact on supply,” ING analysts added.
The euro/dollar was trading at 1.0855 this morning. On Tuesday evening, the currency pair was trading at 1.0873.
Company news
Celyad still has sufficient resources to finance costs and investments until the second quarter of 2025.
Aedifica completed 10 projects in the fourth quarter for an amount of approximately 97 million euros.
Avantium has reserved part of its future production of FDCA for the Slovenian coatings and composites company Helios Resins. Avantium did not share financial details on Tuesday evening.
Wall Street closing positions
The S&P 500 fell 0.4 percent to 4,765.98 points on Tuesday, the Dow Jones index lost 0.6 percent to 37,361.12 points and the Nasdaq closed 0.2 percent in the red at 14,944.35 points.
Source: ABM Financial News ABM Financial News is a supplier of stock market news, video and data, both for real-time trading platforms and dealing rooms as well as for online and offline media publications. The information in this article is not intended as professional investment advice or as a recommendation to make certain investments.
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2024-01-17 07:14:00
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