(ABM FN) European stock markets will open higher on Wednesday, in the run-up to the US Federal Reserve’s interest rate decision.
IG forecasts an opening gain of 47 points for the German DAX, a plus of 18 points for the French CAC 40 and a rise of 15 points for the British FTSE 100.
European stock markets closed higher on Tuesday as investors became more confident that the conflict in the Middle East will not escalate further.
The operating results are above expectations this quarter, said Frank Vranken of Bank Edmond de Rothschild. Most companies managed to increase profits thanks to better margins and large cash positions, and instead of a flat profit for the third quarter, we are heading for profit growth of 3 percent or even better, according to Vranken.
There was good news about inflation in the eurozone. This appeared to have fallen sharply in October, to 2.9 percent, from 4.3 percent in September. Underlying core inflation, excluding volatile energy and food prices, remained at a relatively high level, but also fell further, from 4.5 percent to 4.2 percent.
The euro slumped on Tuesday afternoon in response to low inflation.
The stronger-than-expected drop in inflation could pave the way for interest rate cuts by the European Central Bank from the middle of next year. “Core inflation fell across an encouraging broad spectrum across both goods and services, although services prices are clearly stickier,” said Tomas Dvorak of Oxford Economics. He expects inflation to fall below the ECB’s 2 percent target next year.
The euro zone economy shrank by 0.1 percent in the third quarter, it was further revealed on Tuesday.
Company news
BASF was one of the strongest risers on Tuesday. The German chemical company posted red figures in the third quarter and adjusted its outlook for 2023 downwards. Turnover was under considerable pressure due to lower prices and volumes. The share still rose more than four percent.
AB InBev closed 5.5 percent higher. The beer brewer saw turnover increase despite lower volumes and will buy back shares for 1 billion dollars. Rival Carlsberg also posted strong sales growth, but still closed in the red.
DSM-Firmenich was the best performer in Amsterdam and closed more than 7 percent higher. The company delivered lower revenue and adjusted EBITDA in the third quarter of 2023, and further adjusted its full-year guidance downward.
In Paris, Bouygues and real estate fund Unibail-Rodamco were favorites, with gains of 4 percent or more. Train builder Alstom, car manufacturer Stellantis and steel group ArcelorMittal also gained more than 3 percent.
Euro STOXX 50 4.061,12 (+0,81%)
STOXX Europe 600 433,66 (+0,59%)
DAX 14.810,34 (+0,64%)
CAC 40 6.884,51 (+0,82%)
FTSE 100 7.321,72 (-0,08%)
SMI 10.391,16 (+0,09%)
AEX 718.28 (+0.59%)
BEL 20 3.356,00 (+1,55%)
FTSE MIB 27.741,91 (+1,47%)
IBEX 35 9.017,30 (+0,04%)
US STOCKS
Wall Street opens in the red on Wednesday, according to US futures.
US stock markets closed higher on Tuesday ahead of the Fed’s interest rate decision and a jobs report later in the week. The American indexes ended October with a loss, just like the two previous months.
Investors on Tuesday tried to continue Monday’s rally, possibly looking past the difficult October. When it came to high interest rates, there seemed to be light on the horizon.
“The US Treasury will need to raise less money this quarter, and therefore issue fewer bonds, than previously expected. Combined with a further slowdown in inflation, this could lead to interest rates falling again,” said the investment manager. Simon Wiersma of ING. Tax revenues were less than expected, meaning that not 852 billion, but 776 billion dollars need to be borrowed.
The US ten-year yield was quoted at 4.858 percent on Tuesday.
In the afternoon it emerged that the purchasing managers’ index for Chicago fell slightly in October, as did US consumer confidence according to the Conference Board. The low reading of the expectations index of 75.6 would indicate a recession in the coming year.
Labor costs rose slightly faster in the third quarter than analysts had expected. Furthermore, home prices in the largest US cities continued to rise.
The oil price fell due to decreasing concerns about escalation of the conflict in the Middle East.
The official purchasing managers index from China was not a boost. Chinese industry appeared to shrink again, while growth in the services sector slowed.
Company news
Caterpillar lost almost 7 percent. Although profit in the third quarter was above expectations, the outlook for the fourth quarter turned out to be tepid. For the fourth quarter, Caterpillar expects sales to be “slightly higher.” The analyst consensus expected around 5 percent.
Translated to other companies, this could be a “pretty negative story for cyclical stocks right now,” according to Steve Sosnick an Interactive Brokers.
JetBlue Airways lost more than 10 percent. The company warned of a bigger loss in the fourth quarter than the market expected.
Advanced Micro Devices saw its share price fall by 4 percent after the close on Tuesday after the publication of strong profit figures and a flat outlook for the fourth quarter.
Quarterly figures from Qualcomm, Doordash and PayPal will follow on Wednesday. The greatest expectations are around iPhone maker Apple, which reports on Thursday.
S&P 500 index 4.1933,80 (+0,65%)
Dow Jones index 33.052,87 (+0,38%)
Nasdaq Composite 12.851,24 (+0,48%)
ASIA
The Asian stock markets were on balance higher on Wednesday. Figures from S&P Global showed that both Chinese and Japanese industries shrank in October.
Nikkei 225 31.546,10 (+2,2%)
Shanghai Composite 3.023,14 (+0,1%)
Hang Seng 17.069,83 (-0,3%)
VALUE
The euro/dollar traded at 1.0568. When the American stock exchanges closed on Tuesday, the currency pair was still trading at 1.0581 and when the European stock exchanges closed, it was at 1.0568.
USD/JPY Yen 151,29
EUR/USD Euro 1,0568
EUR/JPY Yen 159,90
MACRO-AGENDA:
01:30 Purchasing managers index industry – October final. (Yap)
03:45 Purchasing managers index industry Caixin – October (Chi)
08:00 Import prices – September (Dld)
10:30 Purchasing managers index industry – October final. (UK)
12:00 Mortgage Applications – Weekly (US)
13:15 ADP Jobs Report – October (US)
14:45 Purchasing managers index industry – October final. (USA)
15:00 Purchasing managers index industry ISM – October (US)
3:00 PM Construction Spending – September (US)
3:00 PM Jobs – September (US)
3:30 PM Oil Stocks – Weekly (US)
7:00 PM Fed – Interest rate decision (US)
COMPANY NEWS:
00:00 GlaxoSmithKline – Third quarter figures (UK)
12:00 DuPont – Third quarter figures (US)
12:00 Kraft Heinz – Third quarter figures (US)
12:00 Yum Brands – Third quarter figures (US)
21:00 DoorDash – Third quarter figures (US)
21:00 PayPal – Third quarter figures (US)
21:00 Qualcomm – Third 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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2023-11-01 06:03:00
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