(ABM FN-Dow Jones) European stocks will open lower on Thursday, following the Federal Reserve’s interest rate decision on Wednesday evening.
IG forecasts an opening loss of 38 points for the German DAX, a minus of 13 points for the French CAC 40 and a decline of 33 points for the British FTSE 100.
European stocks closed mostly higher on Wednesday.
The focus of the trading day will be Wednesday evening with the interest rate decision by the Federal Reserve. The market is counting on the US central bank to maintain its key interest rate and also to keep its purchasing policy unchanged despite the sharp rise in inflation in the US. In particular, the market is looking for hints about a future tightening of accommodative monetary policy.
“The Fed’s decision is likely to affect European equities, but this will be short-lived as the European Central Bank is yet to provide any signs of tightening, leading to the possibility of higher levels [op de beurzen] present,” said ActivTrades analyst Pierre Veyret.
On a macroeconomic front, it was announced on Wednesday that UK consumer prices rose at a similar pace to I April in May, while core inflation beat expectations. Producer prices rose slightly faster than expected.
During the second half of the trading day, the news came from the US that the number of mortgage applications in the US rose by 4.2 percent last week. The number of homes under construction in the United States rose 3.6 percent month-on-month in May, while building permits issued fell 3.0 percent.
US import prices rose 1.1 percent month-on-month in May, while export prices rose 2.2 percent.
Company news
The Belgian Colruyt fell 11.0 percent, after the supermarket chain released a disappointing profit and outlook.
Miners came under pressure on Wednesday after Beijing announced it would release national reserves of, for example, copper and aluminum in the near future to keep supply and prices stable. Anglo American fell 1.2 percent, Glencore lost 1.0 percent, while Rio Tinto closed narrowly higher.
The German SAP lost more than 1.0 percent, after its American rival Oracle came with figures. The company released a disappointing outlook for the current quarter.
Deutsche Telekom is looking for financial partners for investments in a network for high-speed internet and, according to Reuters, it would also have started selling T-Mobile Netherlands. Shares of Deutsche Telekom fell 0.4 percent.
Euro STOXX 50 4,151.76 (+0.2%)
STOXX Europe 600 459,86 (+0,2%)
DAX 15.710,57 (-0,1%)
CAC 40 6,652.65 (+0.2%)
FTSE 100 7,184.95 (+ 0.2%)
SMI 11,982.03 (+ 0.5%)
AEX 733,50 (+0,3%)
BEL 20 4,226.29 (+ 0.1%)
FTSE MIB 25.767,54 (+0,1%)
IBEX 35 9.202,20 (-0,3%)
US EQUITIES
Wall Street opens in the red on Thursday, according to US futures.
U.S. stocks closed lower on Wednesday after the Federal Reserve hinted at two rate hikes in 2023.
The focus was on Wednesday’s Fed rate decision. In line with expectations, the US central bank maintained its key interest rate and bond-buying program. The big surprise came from the dot plot, “since it shows two rate hikes in 2023, while there were none in March,” said Rabobank market analyst Philip Marey. Despite this, the central bank reiterated its view that rising inflation is only a temporary factor.
The Fed reiterated in the accompanying statement that it remains committed to using its full range of instruments to support the US economy, with the central bank striving to maximize employment and further its price stability goals. The central bank is aiming for an inflation rate that can be slightly above 2 percent for some time, but anchors itself at 2 percent over time. The Fed expects to maintain its accommodative policy until these results are achieved.
PCE inflation is projected to be at a median of 3.4 percent for 2021, compared to 2.4 percent in March. The 2022 estimate was revised upwards from 2.0 to 2.1 percent and the 2023 estimate was also revised upwards to a median of 2.2 percent, from 2.1 percent previously. For the long term, the median has been set at 2.0 percent.
Growth estimates for real gross domestic product have also been revised upwards. The central bank expects growth of 7 percent in 2021, where it was previously expected to grow by 6.5 percent. The growth estimate for 2022 was maintained at 3.3 percent, while GDP growth for 2023 was revised upwards to 2.4 percent, from a growth of 2.2 percent earlier.
On a macroeconomic level, it was also announced that the number of mortgage applications in the US rose by 4.2 percent last week. The market index rose from 645.4 to 672.4.
The number of homes under construction in the United States rose 3.6 percent month-on-month in May to 1.572 million homes, while building permits issued declined 3.0 percent to 1.681 million.
US import prices rose 1.1 percent month-on-month in May, while export prices rose 2.2 percent.
July futures for a barrel of crude closed 0.04 percent, or $0.03, higher on the New York Mercantile Exchange at $72.15 on Wednesday, after the latest data from the US energy agency EIA showed that crude oil inventories in the US fell sharply last week.
On a macroeconomic level, three publications are on the agenda in the United States on Thursday. June’s weekly support requests and the Philadelphia Fed Index appear before the stock market, followed by May’s leading indicators.
Company news
Oracle has posted revenue growth of 8 percent in the past quarter and posted record profits for the past fiscal year. The stock fell about 5.5 percent.
Regeneron Pharmaceuticals has developed an antibody that would significantly reduce coronavirus patients’ risk of dying, according to a large UK study of nearly 10,000 hospitalized patients. The risk would have been reduced by a fifth by the antibody. The drug has no added value if the patient has already produced antibodies. The stock lost 0.3 percent.
Chinese freight forwarding startup Full Truck Alliance, which offers an Uber-like service for trucks, aims to raise $1.6 billion with its IPO in the United States, a report to regulators has revealed. The company, also known as Manbang Group, has Alphabet and an investment fund of the Japanese Softbank behind it.
Private equity firm Platinum Equity acquires textbook publisher McGraw Hill from Apollo Global Management. It would be a $4.5 billion deal, reported The Wall Street Journal.
Southwest Airlines has had to cancel 500 flights due to technical problems. The connection between various systems had failed, a spokesperson said. The stock fell 0.7 percent.
S&P 500 index 4,223,70 (-0,5%)
Dow Jones index 34.033,67 (-0,8%)
Nasdaq Composite 14.039,68 (-0,2%)
ASIA
Asian stocks were mixed on Thursday.
Nikkei 225 28.969,48 (-1,1%)
Shanghai Composite 3.524,31 (+0,2%)
Hang Seng 28,516.97 (+ 0.3%)
EVALUATE
The euro/dollar traded at 1.1998. When the US markets closed on Wednesday, the currency pair still moved at 1.2012 and at the close of the European markets there was still a position of 1.2119 on the plates.
The dollar strengthened strongly after the interest rate decision.
USD/JPY Yen 110,65
EUR/USD Euro 1,1998
EUR/JPY Yen 132,76
MACRO-AGENDA:
06:30 Unemployment – May (NL)
11:00 Inflation – May (eur)
13:00 Turkish Central Bank – Interest Rate Decision (Tur)
14:30 Support Requests – Weekly (US)
14:30 Philadelphia Fed index – Juni (VS)
16:00 Leading Indicators – May (US)
COMPANY NEWS:
22:00 Adobe Systems – US Q2 Figures
ABM Financial News; [email protected]; Redactie: +31(0)20 26 28 999.
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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