(ABM FN-Dow Jones) European stocks will open on Thursday after the first US rate hike in years.
IG forecasts an opening gain of 13 points for the German DAX, 1 min of 2 points for the French CAC 40 and an 11 point drop for the British FTSE 100.
European stocks closed higher on Wednesday.
European equities closed higher on Wednesday, buoyed by a rebound in Chinese tech funds and comments from Ukraine that there is room for compromise in peace negotiations with Russia.
In addition to tech, commodities and energy stocks did well, as did stocks of companies with high exposure to China, following Beijing’s plans to strengthen capital markets and revive the economy. Travel and leisure stocks also rose.
“The rebound in Chinese equities shows how sensitive the markets are,” said Saxo Bank market analyst Peter Garnry. “We are in an environment of extreme uncertainty. Everything can change in an instant,” he said.
Furthermore, the market is looking forward to the Federal Reserve’s rate decision later tonight, with a rate hike of 25 basis points expected.
On a macroeconomic level, no publications were scheduled in Europe on Wednesday.
The euro/dollar traded at 1.1009. At the start of the trading day, the currency pair still moved at 1.0954 and at the close of the US stock exchanges on Tuesday there was a position of 1.0951 on the plates.
Company news
BMW expects the profit margin for the automotive segment to be lower this year than previously thought, because of the war in Ukraine. The stock rose more than 4.0 percent.
E.ON was able to record more turnover and profit in 2021 and is counting on a record EBITDA for this year. E.ON nevertheless lost 0.3 percent.
Beverage manufacturer Pernod Ricard is to buy up to 200 million euros in its own shares between today and April 6. The stock was more than 3.0 percent higher.
Inditex saw its turnover and results rise sharply last year. The share of the Spanish fashion giant fell about 2.0 percent.
In Paris, Société Générale rose about 8.5 percent, Alstom gained about 7.5 percent and Thales lost more than 1.0 percent.
In Frankfurt, Hellofresh gained about 11.5 percent, while Delivery Hero rose almost 10.0 percent. Beiersdorf lost approximately 0.8 percent and in addition to E.ON, RWE also lost approximately 0.5 percent.
A notable increase was found in Amsterdam, where the Prosus share price rose almost 24.0 percent. Tencent, of which Prosus is a major shareholder, rose 23 percent on the Hong Kong stock exchange. Other Chinese tech stocks also had the wind at their backs this morning, after the price drops in recent trading days.
European tech stocks also performed well. For example, the share price of semiconductor specialists ASML, ASMI and Besi in Amsterdam rose approximately 7.0 to 9.0 percent and that of STMicroelectronics in Paris rose approximately 7.5 percent.
Euro STOXX 50 3,889.69 (+4.1%)
STOXX Europe 600 448,45 (+3,1%)
DAX 14.440,74 (+3,8%)
CAC 40 6,588.64 (+3.7 %)
FTSE 100 7,291.68 (+ 1.6%)
SMI 11,900.96 (+ 1.9%)
AEX 703,52 (+4,0%)
BEL 20 4,085.71 (+ 3.1%)
FTSE MIB 24.284,85 (+3,3%)
IBEX 35 8.380,40 (+1,8%)
US EQUITIES
Wall Street opens slightly lower, according to US futures.
US stocks closed higher on Wednesday. The focus of the trading day was on the interest rate decision of the Federal Reserve. In line with expectations, the central bank raised the key interest rate, the federal funds rate, by 25 basis points. The discount rate was increased by 0.25 percentage point to 0.50 percent.
The Fed also said it expects to announce a plan to reduce its balance sheet by $9 trillion soon.
In addition, the dot plot showed that the Fed is forecasting a total of seven rate hikes this year. According to market analyst Philip Marey of Rabobank, this was in line with expectations and, according to him, has now been priced in.
What was surprising, according to the Rabobank analyst, is that the US central bank plans to continue raising interest rates next year. “The counter stands for 3 or 4 rate hikes for 2023,” said Marey.
The US Federal Reserve has forecast PCE inflation at 4.3 percent for 2022, which is a significant upward revision from its December estimate. At that time, inflation was still assumed to be 2.6 percent. The estimate for gross domestic product growth in 2022, on the other hand, has been revised downwards to growth of 2.8 percent, from 4.0 percent growth previously.
The market was also supported on Wednesday by reports that Beijing will keep the stock market stable and take measures to stimulate economic growth, halting the sell-off in China’s stock markets that accelerated over the past week.
There was some optimism on the Ukrainian front after Kiev said there was room for compromise in talks with Russia.
On a macroeconomic level, it was also announced on Wednesday that the number of mortgage applications in the US fell by 1.2 percent last week. The market index fell from 502.5 to 496.5.
U.S. retail sales rose 0.3 percent and 17.6 percent, respectively, in February on a monthly and annual basis.
US import prices rose 1.4 percent on a monthly basis in February, while export prices rose 3.0 percent.
Confidence among US homebuilders fell further in March. The index fell from an adjusted 81 in February to 79 in March.
U.S. corporate inventories rose 1.1 percent and 11.4 percent on a monthly and annual basis in January, respectively.
April futures for a barrel of West Texas Intermediate crude closed 1.5 percent, or $1.40, lower on the New York Mercantile Exchange at $95.04 on Wednesday. The latest data from the US energy agency EIA showed that crude oil inventories in the US rose last week.
The war in Ukraine and all the sanctions that followed on Russia pose a major threat to the supply side of the oil market and thus to the world economy, the international energy agency said in its monthly report on Wednesday.
According to the IEA, the sanctions will reduce the availability of 3 million barrels of Russian oil every day from April. The agency lowered its estimate for this year’s oil supply by 2 million barrels to 99.5 million barrels per day.
On a macroeconomic level, four publications are on the agenda in the US on Thursday. Homebuilding data, the Philadelphia Fed index and weekly aid applications will be released before the fair, followed by Industrial production data.
Company news
Foxconn has reopened its Chinese factories after they were closed by a corona lockdown in Shenzhen this week. Foxconn is Apple’s largest supplier, which assembles the iPhones of the American technology giant. By keeping the employees inside the factory, they cannot spread the virus and production can resume.
Shares of Big Lots fell 0.2 percent after shareholder Mill Road announced it had acquired a 5.1 percent stake and is aiming for a sale of the company. The target sale price would be 70 to 120 percent higher than Monday’s closing price.
Chinese tech stocks listed in the US rose strongly on Wednesday. Alibaba gained about 35.0 percent and JD.com rose more than 38.0 percent.
S&P 500 index 4.357,86 (+2,2%)
Dow Jones index 34.063,10 (+1,6%)
Nasdaq Composite 13.436,55 (+3,8%)
ASIA
Asian stocks were again sharply higher on Thursday, especially in Hong Kong.
Nikkei 225 26.632,49 (+3,4%)
Shanghai Composite 3.225,42 (+1,7%)
Hang Seng 21,125.04 (+ 5.2%)
EVALUATE
The euro/dollar traded at 1.1024. When the US markets closed on Wednesday, the currency pair still moved at 1.1028 and at the close of the European markets there was still a position of 1.1009 on the plates.
USD/JPY Yen 118,80
EUR/USD Euro 1,1024
EUR/JPY Yen 130,97
MACRO-AGENDA:
06:30 Unemployment – February (NL)
11:00 Inflation – February final (EUR)
12:00 Central Bank Turkey – Interest Rate Decision (Tur)
13:00 Bank of England – Interest Rate Decision (UK)
13:30 Home construction and building permits – February (US)
13:30 Philadelphia Fed index – Maart (VS)
13:30 Support Requests – Weekly (US)
14:15 Industrial Manufacturing – February (US)
COMPANY NEWS:
9:00 PM FedEx – US Third Quarter Figures
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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