(ABM FN) The Brussels stock exchange is expected to start slightly lower on Monday. Futures on the Euro Stoxx 50 index pointed to a loss of several tenths of a percent about an hour before the stock market bell. Wall Street is closed today in observance of Martin Luther King Day.
The Bel20 lost 0.4 percent to 4,242.11 points on Friday. The index closed the previous week at 4,306.37 points. At the stock level, the results are very strong this year due to, among other things, sector rotation from expensive tech stocks to value and cyclical stocks, due to the prospect of rising interest rates.
Investors are increasingly convinced that the Federal Reserve will raise interest rates as early as March, fueling higher bond yields and volatile stock trading. The US 10-year yield was around 1.80 percent this morning. At the start of the trading year, the interest rate was still around 1.50 percent.
The rising interest rates are mainly the result of the steep rise in inflation, forcing central banks to warn that they are easing their monetary policy in an attempt to halt the price increases. Last week it was announced that US inflation stood at 7.0 percent in December and core inflation at 5.5 percent.
Economists at Deutsche Bank think inflation in the US will peak in January, but then decline. The economists point out that the omikron variant of the coronavirus appears to be milder than thought, easing concerns about further disruption of the global supply chain. This disruption is seen as an important cause of the high inflation.
Meanwhile, investors are looking forward to the start of the earnings season, which will get off to a full international start this week, so that attention will no longer be solely focused on interest rates and corona. In recent years, the quarterly earnings season has also often been favorable to investors, resulting in many better-than-expected reports and rising stock markets.
On Wall Street, investment banks Goldman Sachs and Morgan Stanley, food giant Procter & Gamble and streaming service Netflix come through with figures. In anticipation of the figures, Netflix already announced on Friday evening that it would increase its subscription prices in North America from $ 13.99 to $ 15.49 per month. Traditionally, the earnings season in Brussels starts a little later. Today the company agenda is still empty.
Wall Street started a final sprint late Friday evening in the run-up to a long weekend, as a result of which the main indicator S&P 500 narrowly closed in the green with 0.1 percent. At the halfway point of the trading day, a loss of more than 1 percent was still on the plates. Tech exchange Nasdaq also gained more than half a percent, while the more traditionally composed Dow Jones index lost more than half a percent. Wall Street also lost ground on a weekly basis in the second trading week of the new year.
The kick-off of the US earnings season, with mainly figures from financial giants, received a mostly negative reception on Friday. Investment bank JPMorgan even fell 6 percent, despite exceeding profit expectations, while Citigroup and BlackRock also lost ground after their reports. Market analyst Michael Hewson of CMC Markets pointed to disappointing results in the trading activities of Citigroup and JPMorgan. Well Fargo closed 3.5 percent higher after releasing a better than expected profit.
Asian stock markets are trading this morning. Hong Kong and Seoul give up 0.9 percent and 1.3 percent respectively. The other main exchanges are trading in the green with modest gains.
In China, industrial production grew faster in December, but the increase in Chinese retail sales actually slowed down. In 2021, the Chinese economy grew by 8.1 percent. In the fourth quarter, growth was only 4.0 percent. Last year’s growth was mainly in the first half of the year, after a recovery from the corona pandemic.
The US oil future also climbed more than half a percent this morning. Last week, the oil future was already 6 percent higher to $ 83.82 a barrel. Oil investors are thus sending out the signal that they do not expect the omikron variant to really affect global mobility. The brutal crackdown on the uprising in Kazakhstan also eased concerns about a possible disruption to Kazakh oil exports.
Company news
The Federal Participation and Investment Company announced a 6.3 percent stake in Ageas.
Azelis has acquired a majority stake in Catalite, a Thai distributor of specialty chemicals in the personal care market. Financial details were not mentioned.
Retail Estates sold a retail park in Lommel for 11.5 million euros.
Wall Street closing positions
Techindex Nasdaq closed 0.6 percent higher on Friday at 14,893.75 points. The S&P 500 wiped out a loss to close 0.1 percent higher at 4,662.85 points, while the Dow Jones index lost 0.6 percent to 35,911.81 points.
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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