(ABM FN-Dow Jones) The European stock markets will have a green opening on Friday, in the run-up to the start of the American earnings season.
IG predicts an opening gain of 108 points for the German DAX and a plus of 47 points for the French CAC 40. The British FTSE looks to open 32 points higher.
Stock markets in Europe ended lower on Thursday, despite a clear signal from the European Central Bank that an interest rate cut is imminent. The stock markets closed above the lowest point of the day.
The ECB left the main interest rates unchanged as expected, but did “officially” open the door to a cut in June, saw Carsten Brzeski of ING. For the first time, the central bank also talked about a possible cut in its interest rate decision, the economist said.
According to chairman Christine Lagarde, during the meeting about the interest rate decision, there were even “some directors” who already have sufficient confidence in an interest rate cut.
But, Lagarde also emphasized, the ECB remains dependent on the economic figures that will be received in the coming period. “We will have much more information in June,” the ECB president said. The central bank does not commit itself in advance to a specific interest rate range.
The ECB also does not want to be guided by what the Federal Reserve will do in the coming months, Lagarde further said, but the European markets clearly thought differently about this on Thursday. The stock markets managed to ignore the disappointing inflation figures from the US on Wednesday, but the prospect that an American interest rate cut may not take place until September did play tricks on sentiment in Europe on Thursday.
Yet, according to investment manager Simon Wiersma of ING, there is no reason to panic, because “as long as the current inflation is demand-driven, as opposed to the supply-driven inflation in 2021 and 2022, and the economy continues to perform well, this is not necessary for equities.” not bad at all.”
On a macroeconomic level, attention was also paid on Thursday to Chinese inflation figures, which showed a slight increase of 0.1 percent on an annual basis in March. Chinese producer prices fell again last month, this time by 2.8 percent. This was as expected.
Company news
European financials had a bad day, possibly now that an interest rate cut by the ECB is clearly in sight. In Frankfurt, Deutsche Bank lost 2.5 percent and bottom line Commerzbank even lost 4.0 percent. In Paris, Crédit Agricole lost 2.0 percent and BNP Paribas 1.8 percent. AXA fell 1.2 percent. ING lost 1.9 percent in Amsterdam and UniCredit fell 2.8 percent in Milan.
Semiconductors were also under pressure. Infineon lost 2.4 percent and ASML lost 0.5 percent.
The leader in the DAX was RWE, with a price gain of 2.7 percent. Rheinmetall gained 1.9 percent. In the CAC 40, Publicis rose 3.1 percent, making it by far the biggest gainer in the main index in Paris.
Exor has seen its intrinsic value increase by a third in 2023 and will record a one-off book profit of 12 billion euros this year due to changed reporting rules. Exor will pay out approximately 100 million euros in dividends, or 0.46 euros per share. Furthermore, the share buyback program will be restarted for the remaining 250 million euros. Exor shares closed slightly higher in Amsterdam.
Givaudan showed a strong volume recovery in the first quarter of this year, which exceeded expectations. Turnover increased organically by 13 percent and was broadly based. The price still closed 0.7 percent lower in Zurich.
Euro STOXX 50 4.966,68 (-0,7%)
STOXX Europe 600 504,55 (-0,4%)
DAX 17.954,48 (-0,8%)
CAC 40 8.023,74 (-0,3%)
FTSE 100 7.923,80 (-0,5%)
SMI 11.465,74 (-0,3%)
AEX 883.79 (-0.3%)
BEL 20 3.836,85 (+0,1%)
FTSE MIB 33.713,94 (-1,0%)
IBEX 35 10.649,80 (-1,2%)
US STOCKS
Wall Street is set for a higher open on Friday. The American stock markets also ended mainly higher on Thursday, with a new record for the Nasdaq. The Dow Jones index fell fractionally.
Interest rate fears intensified on Wednesday after disappointing inflation data from the United States.
Bond yields rose sharply after the inflation data, which was a “completely insane” move, according to David Rosenberg of Rosenberg Research.
The US ten-year yield was slightly higher on Thursday at 4.57 percent and the yield on the two-year Treasury Note fell slightly to 4.94 percent.
Bond yields have shown such a dramatic move only three times in the past three years, each time during the summer of 2022 when inflation accelerated to the fastest pace in 40 years, said Rosenberg, a former economist at Merrill Lynch.
And that’s a shame, according to the expert, because the real story of Wednesday’s inflation figures is less problematic for the markets than investors seem to think, Rosenberg said.
According to Rabobank, the next two inflation reports must be very positive if the Fed wants to see through this. “We now no longer expect an interest rate cut in June, but only in September. As a result, we have also reduced our expectations for this year from three interest rate cuts to two,” the bank said.
US producer prices released on Thursday were generally a windfall for the market. In March, factory prices rose by 0.2 percent, as expected. Core prices also rose 0.2 percent. On an annual basis, producer prices in the US rose faster in March, by 2.1 percent. In February that was still 1.6 percent.
The number of new claims for unemployment benefits in the US fell to 211,000 last week. A week earlier, 222,000 new applications for benefits were made.
The next target for the markets is the quarterly results of BlackRock, Citigroup, JPMorgan Chase and Wells Fargo, which will be released on Friday. Market experts expect a profit increase for JPMorgan and a decrease for Citigroup and Wells Fargo.
Oil prices also fell. At a settlement of $85.02, a barrel of West Texas Intermediate became 1.4 percent cheaper on a daily basis. The price for a barrel of Brent became almost one percent cheaper and remained below $90 per barrel.
OPEC released its monthly report on Thursday. The cartel still expects oil demand to grow by 2.2 million barrels per day in 2024. By 2025, oil demand will increase by 1.8 million barrels per day, OPEC further said.
Oil prices rose significantly in March and early April, with rising tensions in the Middle East “clearly driving the momentum”, according to ING experts, who expect the market to post a shortfall of around 1 million in the second quarter barrels per day.
“OPEC+ will be key to the outlook for the second half of the year. Additional voluntary production cuts will expire at the end of June. As a result, the market will show a small surplus in the second half of 2024,” according to ING.
Company news
Multiple regulators in the United States are investigating Morgan Stanley over how it monitors clients at risk of money laundering through the bank’s asset management arm. The Wall Street Journal reported this on Thursday evening based on information from insiders. The Securities and Exchange Commission, the Office of the Comptroller of the Currency and other offices of the US Treasury Department are involved, the business newspaper wrote. Last year, The Wall Street Journal reported that the Federal Reserve is also investigating Morgan Stanley’s practices. Morgan Stanley shares lost 5.3 percent.
Shares of Micron Technology rose 4.4 percent on Thursday after the U.S. chipmaker said it expects the recent earthquake in Taiwan to lead to an impact of up to 5 percent on DRAM chip supplies in a calendar quarter. Activity is recovering well, according to the company, which also expects no long-term impact.
Alpine Immune Sciences gained 37 percent after the pharmaceutical company agreed to a takeover by Vertex Pharmaceuticals for $4.9 billion in cash. Vertex will pay $65 per share for Alpine Immune, an immunology-focused biotechnology company. Vertex shares closed 0.7 percent higher. Alpine’s sector peer Vera Therapeutics rose 17.3 percent.
Regeneron Pharmaceuticals has been accused by the U.S. Department of Justice of fraudulent practices related to the pricing of Eylea, a low vision drug. Regeneron calls the accusations unfounded and will vigorously defend itself in court, the pharmaceutical company said. The share fell by 1.7 percent.
Constellation Brands gained 1.3 percent. In the fourth quarter of its broken financial year, the drinks manufacturer achieved better than expected turnover. The outlook was also positive.
Costco Wholesale rose 1.4 percent after the company increased its quarterly cash dividend by about 14 percent to $1.16 per share. Costco announced a special cash dividend of $15 per share in December. Comparable sales at Costco rose 7.7 percent in March, higher than the 5 percent increase in February.
Rent the Runway closed as much as 162 percent higher, after the clothing rental platform expected that free cash flow will be break-even this year.
S&P 500 index 5.199,06 (+0,7%)
Dow Jones index 38.459,08 (-0,01%)
Nasdaq Composite 16.442,20 (+1,7%)
ASIA
The Asian stock markets were generally lower, but the Japanese Nikkei managed to find the green. The market is waiting for new figures on Chinese exports and imports.
Nikkei 225 39.536,61 (+0,2%)
Shanghai Composite 3.033,08 (-0,0%)
Hang Seng 16.799,67 (-1,7%)
VALUE
The euro/dollar was trading at 1.0712 this morning. On Thursday evening the currency pair was trading at 1.0730.
USD/JPY Yen 153,22
EUR/USD Euro 1,0712
EUR/JPY Yen 164,14
MACRO-AGENDA:
04:00 Trade balance – March (Chi)
06:30 Industrial production – February (Jap)
06:30 Bankruptcies – March (NL)
06:30 International trade – February (NL)
08:00 Inflation – March final (Gld)
08:00 Industrial Production – February (UK)
08:00 Trade balance – February (UK)
08:45 Inflation – March (Fra)
10:00 Monthly report International Energy Agency (Fra)
2:30 PM Import Prices – March (US)
4:00 PM Consumer Confidence Michigan – April vlpg (US)
COMPANY NEWS:
12:00 BlackRock – First quarter figures (US)
13:00 Citigroup – First quarter figures (US)
13:00 JPMorgan Chase – First quarter figures (US)
13:00 Wells Fargo – First 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.
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2024-04-12 05:07:00
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