(ABM FN-Dow Jones) European stocks are set to open significantly higher on Thursday, following the US Federal Reserve’s interest rate decision on Wednesday evening.
IG forecasts an opening gain of 206 points for the German DAX, a plus of 116 points for the French CAC 40 and an increase of 77 points for the British FTSE 100.
European stocks also closed mostly higher on Wednesday. With that, they closed higher for the first time, after five consecutive days of losses, ahead of the Fed rate decision and the decisions of the ECB and the Bank of England on Thursday.
In France, inflation was 2.8 percent year-on-year in November, compared to 2.6 percent in October. And British producer and consumer prices also rose faster in November than in October. Percentage prices rose by 9.1 percent and consumer prices by 5.1 percent.
“UK inflation is supporting the pound, causing the FTSE to underperform, with traders also focused on the outlook for the [Britse] central bank,” said IG market analyst Joshua Mahony.
Company news
Inditex has seen a significant year-on-year increase in revenue and results over the past nine months. The share nevertheless fell more than 4.0 percent.
Sanofi and GSK have achieved positive research results with their corona booster. Shares of Sanofi were up about 1.0 percent, while GSK gained about 0.3 percent.
In Paris, luxury stocks were on the rise. Hermes rose about 2.5 percent, while LVMH gained more than 1.5 percent. Carrefour was the strongest faller with a loss of more than 5.0 percent. Airbus lost 2.5 percent and Unibail-Rodamco-Westfield fell more than 2.0 percent.
In Frankfurt, Satorius won more than 2.5 percent. Sports brands Puma and Adidas won 1.6 percent and 1.4 percent, respectively. Zalando dangled at the bottom with a loss of more than 3.0 percent.
In Amsterdam, the semiconductors took the lead. ASMI won 3.2 percent and ASML 2.7 percent. Industry partner Besi lost almost one percent after a negative analyst report. In Frankfurt, Infineon rose 1.8 percent and in Paris STMicroelectronics rose 2.2 percent.
Euro STOXX 50 4,159.68 (+0.4%)
STOXX Europe 600 470,76 (+0,3%)
DAX 15.476,35 (+0,2%)
CAC 40 6,927.63 (+0.5%)
FTSE 100 7,170.75 (-0.7%)
SMI 12,530.95 (+ 1.0%)
AEX 775,46 (0,0%)
BEL 20 4,122.01 (0.0%)
FTSE MIB 26.666,08 (+0,4%)
IBEX 35 8.275,00 (-1,2%)
US EQUITIES
Wall Street opens higher on Thursday, according to US futures.
US stocks closed sharply higher on Wednesday after the Fed announced it would accelerate its monthly bond-buying program and raise interest rates three times by 2022.
As a result, the trading day was completely dominated on Wednesday by the Federal Reserve’s long-awaited policy decision. The US central bank has left key interest rates unchanged as expected, but announced that it will accelerate its monthly bond-buying program.
The pace of reducing monthly repurchases is accelerating from the current $15 billion per month to $30 billion per month. This means that the buyback program, as expected by economists, will end in March. The Fed noted that the pace can be adjusted where necessary.
Speaking at a press conference following the interest rate decision, Chairman Jerome Powell said changes in the economic outlook warrant an accelerated tapering.
The federal funds rate remained at 0.00 to 0.25 percent as expected. The discount rate was maintained at 0.25 percent.
Maintaining rates and accelerating tapering were no surprises, according to Monex Europe analyst Ima Sammani, but the US central bank’s dot plot was, especially interest rate forecasts. The Fed now expects three rate hikes in 2022.
“The so-called dot plot adjustments exceeded market expectations and our own expectations of 2 rate hikes in 2022,” said Sammani.
In 2023 and 2024, expectations are more nuanced, says Sammani, as three rate hikes are expected in 2023 and two in 2024.
PCE inflation is projected at 5.3 percent for 2021, compared to 4.2 percent in September, the dot plot also showed. The estimate for 2022 has been revised upwards from 2.2 to 2.6 percent. The estimate for 2023 was also revised upwards, albeit modestly, from 2.2 to 2.3 percent.
Gross domestic product growth in 2021, on the other hand, was revised downwards to a growth of 5.5 percent, from a previously assumed growth of 5.9 percent. The central bank is more optimistic for 2022. Growth of 4.0 percent is now forecast for next year, while in September a plus of 3.8 percent was still expected.
On a macroeconomic level, it was also announced on Wednesday that US import prices rose by 0.7 percent on a monthly basis in November, which was slightly more than expected. Export prices rose by 1.0 percent.
U.S. retail sales rose 0.3 percent and 18.2 percent consecutively in November on a monthly and annual basis.
The New York Federal Reserve’s index for manufacturing in the New York area rose surprisingly further in December, after jumping up in November. The index rose from 30.9 to 31.9. Economists were expecting a drop to 25 points, after the increase of more than ten points a month earlier.
Confidence among US homebuilders rose slightly in December. The NAHB housing index rose from 83 in November to 84 this month.
Corporate inventories rose 1.2 percent month-on-month in October, slightly ahead of the 1.1 percent expected by economists. On an annual basis, there was an increase of 7.8 percent.
A January crude oil futures closed 0.2 percent higher on the New York Mercantile Exchange at $70.87 on Wednesday, closing at its highest level in two weeks.
On a macroeconomic level, five publications are on the agenda in the US on Thursday. Weekly aid applications, housing and building permit data and the Philadelphia Fed index will be released ahead of market, followed by November’s industrial production data and December’s composite purchasing managers’ index later in the day.
Company news
Lowe’s sees sales growth stagnate in 2022, after sales grew by about 33 percent in the previous two years. A growing market share should support margin growth. The do-it-yourself chain wants to buy back $ 12 billion of its own shares next year and has stuck to its previously reported expectations for 2021. The share rose about 2.0 percent.
Campbell Soup is open to small acquisitions to strengthen its existing activities, says CFO Mick Beekhuizen. “We don’t want a third leg on the stool,” he said. The soup manufacturer wants additional acquisitions, preferably in the US. The stock gained more than 1.0 percent.
Biotech stocks from China on the Hong Kong stock market lost ground on Wednesday after reports that US sanctions against companies in this sector are imminent. Wuxi Biologics lost more than 20.0 percent. BeiGene fell more than 11.0 percent and Innovent Biologics lost approximately 12.0 percent.
The US holiday season is expected to get off to a strong start, with high demand for gifts, dinners and other products, despite consumer price inflation reaching its highest level in decades.
S&P 500 index 4.709,84 (+1,6%)
Dow Jones index 35.927,43 (+1,1%)
Nasdaq Composite 15.565,58 (+2,2%)
ASIA
Asian stocks were mostly higher on Thursday.
Nikkei 225 29.049,68 (+2,1%)
Shanghai Composite 3.666,16 (+0,5%)
Hang Seng 23,314.11 (-0.5%)
EVALUATE
The euro/dollar traded at 1.1284. When the US markets closed on Wednesday, the currency pair still moved at 1.1294 and at the close of the European markets there was still a position of 1.1260 on the plates.
USD/JPY Yen 114,15
EUR/USD Euro 1,1284
EUR/JPY Yen 128,82
MACRO-AGENDA:
00:50 Trade Balance – November (Jap)
01:30 Composite Purchasing Managers Index – December vpg. (jap)
06:30 Unemployment – November (NL)
08:45 Business confidence – December (Fra)
09:15 Composite Purchasing Managers Index – December vpg. (fra)
09:30 Composite Purchasing Managers Index – December vpg. (German)
09:30 Swiss National Bank – Interest rate decision (Zwi)
10:00 Composite Purchasing Managers Index – December vlpg. (EUR)
10:00 Norges Bank – Interest Decree (Nor)
10:30 Composite Purchasing Managers Index – December vpg. (UK)
11:00 Trade balance – October (eur)
11:00 Labor costs – Third quarter (eur)
12:00 Turkish Central Bank – Interest Rate Decision (Tur)
13:00 Bank of England – Interest Rate Decision (UK)
13:45 European Central Bank – Interest rate decision (eur)
14:30 European Central Bank – Statement by President Lagarde (eur)
14:30 Support Requests – Weekly (US)
14:30 Housing and Building Permits – November (US)
14:30 Philadelphia Fed index – December (VS)
15:15 Industrial Manufacturing – November (US)
15:45 Composite Purchasing Managers Index – December vlpg. (US)
COMPANY NEWS:
22:00 Adobe – US Fourth Quarter Figures
22:00 FedEx – US Q2 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.
–
