Beeld: Deutsche Boerse AG
(ABM FN-Dow Jones) European stock markets will open lower on Wednesday. Sentiment appears to be dampened by Fitch’s credit rating downgrade in the US.
IG predicts an opening loss of 115 points for the German DAX and a minus of 37 points for the French CAC 40. The British FTSE looks set to open 31 points lower.
The European stock markets closed lower on Tuesday on the first trading day of August.
“It seems that the recession in the [Europese] industry continues,” said chief economist Cyrus de la Rubia of Hamburg Commercial Bank. Today’s figures suggest that the second half of the year will be a “bumpy ride”, according to the economist.
The various purchasing managers’ indices from the euro zone all ended in the contraction zone in July, but in a few cases they contracted slightly less than previously measured, such as in the case of France.
Unemployment in the eurozone was 6.4 percent in June, the same as the unemployment rate in May.
In the US, the number of vacancies fell slightly. In June, the number of unfilled vacancies was just under 9.6 million, compared to more than 9.6 million in May. In June 2022, there were still 11.0 million vacancies.
In the US, the various purchasing managers’ indices also contracted, although the contraction slowed down somewhat. The ISM industrial purchasing managers’ index rose to 46.4 from 46.0 in June. Data from S&P Global also showed an increase in the purchasing managers’ index for US manufacturing in July. This index rose from 46.3 to 49.0.
Oil got cheaper on Tuesday after July marking the biggest one-month increase since January 2022 and making oil one of the world’s best-performing asset classes for the month. “The market is increasingly concerned about tight inventories and resilient economic growth,” said Rob Haworth of US Bank Wealth Management. “We expect the oil market to experience structural undersupply over the longer term, which should provide price support.”
A September West Texas Intermediate future traded 0.8 percent in the red at $81.10, while an October Brent future traded at $84.75.
The euro/dollar was quoted at 1.0965. At the start of the trading day, the currency pair moved at 1.0993 and at the close of the US markets on Monday there was a reading of 1.0993.
Company news
In Frankfurt, BMW shares fell the sharpest with a minus of 5.4 percent, despite improved full-year prospects. The negativity appears to have been fueled by a warning that higher costs in building electric cars are likely to weigh on free cash flow in the second half of the year.
Rheinmetall took the lead again and managed to book a price gain of 2.0 percent.
Deutsche Post DHL Group also recorded less turnover and profit in the second quarter of 2023, but saw an opportunity to raise the outlook for the entire financial year. The stock closed 5.2 percent lower. PostNL and BPost also lost ground in Amsterdam and Brussels.
Covestro tempered expectations for 2023 in its second-quarter update, which was marked by economic weakness and low demand. Despite this, the share managed to close 1.4 percent higher.
BP fell slightly by 0.1 percent after quarterly results. Like Shell and the US oil giants last week, profits at BP also fell due to the lower oil price. BP will buy back $1.5 billion of its own shares.
In Paris, Capgemini managed to add 2.5 percent, while Eurofins Scientific had to take a loss of 3.7 percent.
Euro STOXX 50 4.430,92 (-0,9%)
STOXX Europe 600 468,46 (-0,6%)
DAX 16.240,40 (-1,3%)
CAC 40 7.407,08 (-1,2%)
FTSE 100 7.666.27 (-0,4%)
SMI 11.309,25 (-0,1%)
AEX 788.19 (-0.5%)
BEL 20 3.781,22 (+0,1%)
FTSE MIB 29,356,16 (-1,0%)
IBEX 35 9.555,90 (-0,9%)
AMERICAN SHARES
The American stock markets will face a red opening on Wednesday after Fitch lowered the credit rating of the US after close on Tuesday evening.
The US stock markets closed somewhat divided on Tuesday
Equity markets stayed fairly close to home on Tuesday and appear to be catching their breath after last month’s strong performance. There may also be a wait-and-see attitude ahead of important job data on Friday and earnings reports from major tech companies later this week.
For now, the earnings season has managed to surprise positively and according to FactSet, more than half of these 500 companies have already reported, of which 80 percent posted better-than-expected earnings.
Today there were also various economic data on the agenda. In the US, for example, the number of vacancies fell slightly. In June, the number of unfilled vacancies was just under 9.6 million, compared to more than 9.6 million in May. In June 2022, there were still 11.0 million vacancies.
The various purchasing managers’ indices also showed contraction, although the contraction eased somewhat. The ISM industrial purchasing managers’ index rose to 46.4 from 46.0 in June. Data from S&P Global also showed an increase in the purchasing managers’ index for US manufacturing in July. This index rose from 46.3 to 49.0.
Oil prices fell slightly on a stronger dollar and perhaps some profit taking after last month’s strong rally. An online OPEC + meeting is scheduled for the end of the week. Saudi Arabia is expected to extend voluntary production cuts until September, further tightening global supply.
September futures for a barrel of West Texas Intermediate crude closed 0.5 percent lower at $81.37 on the New York Mercantile Exchange on Tuesday.
The euro/dollar weakened further on Tuesday, trading at 1.0975. At the start of the trading day, the currency pair moved at 1.0993 and at the close of the US stock markets on Monday there was a level of 1.0993 on the board.
Company news
Caterpillar outperformed Wall Street earnings estimates in the second quarter. Revenue rose 22 percent to $17.3 billion, yielding adjusted earnings per share of $5.55. According to FactSet, analysts were expecting $4.57. The stock led the Dow Jones Industrial Index and was 8.9 percent higher at $288.65. This was a new record.
Uber Technologies has grown considerably in the second quarter of 2023 and achieved black figures. Net income improved from a loss of $2.6 billion to a profit of $394 million. That does include $384 million in windfalls, mainly due to book profits on Uber investments. Free cash flow rose from $382 million to more than $1.1 billion. Despite this, the share lost 5.7 percent.
Merck has revised its outlook downwards on its second-quarter results, as announced on June 16. For the whole of this year, the pharmaceutical company now expects earnings per share of USD 2.95 to USD 3.05, compared to USD 6.88 to USD 7.00 earlier. Analysts expect $2.90 per share. Merck acquired Prometheus Biosciences in April this year for $10.8 billion and has now taken a provision for it for $10.2 billion. This is $4.02 per share. In mid-June, Merck already warned that investors should expect an amount of about $ 4 per share. The share was 1.3 percent lower.
Pfizer has become a little more cautious about revenue in 2023. Pfizer now expects revenue of $67 to $70 billion, up from $67 to $71 billion previously. For 2023, Pfizer still expects adjusted earnings per share of $3.25 to $3.45. Pfizer expects corona vaccine Comirnaty to yield $ 13.5 billion this year, 64 percent less than in 2022. Revenue from the sale of corona treatment Paxlovid is expected to be 58 percent lower this year at $ 8 billion, according to Pfizer. The stock fell 1.3 percent in trading.
The strong increase of Arista Networks was striking. The share of the American computer network company managed to add almost 20 percent after better-than-expected quarterly results and optimism about the coming quarter. The share thus managed to sharpen the record levels.
Norwegian Cruise Line Holdings, on the other hand, lost about 12 percent. While the company posted earnings and sales growth in the second quarter, its Q3 forecast missed analyst estimates.
After the fair, AMD and Starbucks, among others, still announced the figures.
Semiconductor manufacturer AMD performed slightly better than expected in the second quarter. The weak PC market depressed sales and profits, but demand for chips for AI had increased.
AMD was quoted about 4 percent higher in aftermarket trading, with the stock closing 2.8 percent higher during regular trading.
Starbucks beat earnings expectations in the quarter and posted record sales. Starbucks posted revenue growth of 12 percent to $9.2 billion in the quarter. And that is a new record. However, analysts had expected $9.3 billion. Earnings rose 19 percent to $1.00 per share. This was calculated at 0.95 dollars. In China, comparable sales increased by no less than 46 percent.
S&P 500 index 4.576,73 (-0,3%)
Dow Jones index 35.630,68 (+0,2%)
Nasdaq Composite 14.283,91 (-0,4%)
ASIA
Asian stock markets were broadly lower on Wednesday.
Nikkei 225 32.813,06 (-2,0%)
Shanghai Composite 3.263,20 (-0,8%)
Hang Seng 19.613,51 (-2,0%)
VALUE
The euro/dollar was trading at 1.0985 this morning. On Tuesday evening, the currency pair was trading at 1.0975.
USD/JPY Yen 143,10
EUR/USD Euro 1,0985
EUR/JPY Yen 157,20
MACRO-AGENDA:
1:00 PM Mortgage Applications – Weekly (US)
2:15 PM ADP Jobs Report – July (US)
4:30 PM Oil Stocks – Weekly (US)
COMPANY NEWS:
00:00 OCI – Second quarter numbers
07:00 DSM-Firmenich – Figures second quarter
07:00 JDE Peet’s – Half Year Results
08:00 Wolters Kluwer – Second quarter figures
00:00 Melexis – Second quarter figures
13:00 Alibaba – US Q2 figures
1:00 PM AMC Entertainment – Second Quarter (US) Figures
13:00 Kraft Heinz – Second quarter results (US)
22:00 DoorDash – US Second Quarter Figures
22:00 PayPal – US Q2 figures
22:00 Qualcomm – Second quarter figures (US)
Bron: 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 and 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.
2023-08-02 04:48:00
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