(ABM FN-Dow Jones) European stocks will open lower on Tuesday.
IG foresees a 56-point opening loss for the German DAX, a 21-point loss for the French CAC 40 and a 22-point drop for the UK’s FTSE 100.
European stocks closed significantly lower on Monday.
Deutsche Bank economist Jim Reid pointed to the combination of the predicament around Ukraine’s border on the one hand, and the need for the market to anticipate rising interest rates on the other. “That leaves no room to relax,” Reid said.
Market analyst Michael Hewson of CMC Markets saw little love for the European stock markets on Valentine’s Day. The DAX fell to its lowest level in eight months, while it was one of the worst days of the year for the London stock exchange.
On a macroeconomic level, Monday was a very calm day.
Company news
In Paris, almost all shares in the CAC 40 closed in the red, except for a small plus for Carrefour. Banks did bad business. BNP Paribas and Société Générale fell to 6 percent. ArcelorMittal also lost 6 percent.
Delivery Hero was the leader in Frankfurt, with a plus of about 5.5 percent, after the number came under considerable pressure last week. It was one of the few risers in the DAX. Deutsche Bank lost 3.5 percent.
Aviation stocks were under pressure across Europe due to the looming conflict in Eastern Europe. Air France-KLM, British Airways parent IAG and Wizz Air lost up to 6 percent.
Euro STOXX 50 4,057.92 (-2.3%)
STOXX Europe 600 460,96 (-1,8%)
DAX 15.113,97 (-2,0%)
CAC 40 6,852.20 (-2.3%)
FTSE 100 7,531.59 (-1.7%)
SMI 12,026.37 (-1.7%)
AEX 747,89 (-1,8%)
BEL 20 4,004.89 (-1.9%)
FTSE MIB 26.415,41 (-2,0%)
IBEX 35 8.573,80 (-2,6%)
US EQUITIES
US futures predict a lower open Tuesday.
US stocks closed mostly lower on Monday. Trade was volatile due to the threat of war in Eastern Europe.
On Friday, the United States warned of an imminent military invasion of Ukraine by Russia, after which the stock markets in New York lost considerable ground. Phone calls between US President Biden and his Russian counterpart Putin did not lead to a breakthrough last weekend.
On Monday, there seemed to be a glimmer of hope. Russian Foreign Minister Lavrov said there is still a chance to resolve the crisis diplomatically.
German Chancellor Scholz said Germany and the West “are ready for a serious dialogue with Russia on European security”.
However, The Wall Street Journal reported Monday evening that the United States is closing its embassy in the Ukrainian capital Kiev. Diplomats are transferred to the city of Lviv in western Ukraine.
Ukrainian President Zelensky said in an update that a Russian attack is expected next Wednesday. He therefore wants to declare a day of national unity on that day.
According to investors, it is difficult to act on the situation, because there is no good insight into the possibility of an invasion or the nature and severity of the reaction from Western countries. However, if aggression from Moscow leads to economic sanctions, the global economy could react unpredictably. Higher energy prices are a likely consequence. WTI oil rose to more than $95 on Monday. That was the first time in seven years.
In the event of an invasion, “there will be a negative effect on the markets, but I also think investors are already absorbing this,” said Danske Bank’s Lars Skovgaard Andersen.
Stock prices have been weighed down in recent months by the possibility of higher interest rates in the United States, with inflation still rising there. The possibility of a ground war in Europe has become an additional source of uncertainty.
Moscow denies any plans to invade the neighboring country, but Russia’s military build-up has accelerated and troops are deployed on three sides of the country. The Americans and other Western countries are now withdrawing their embassy staff and warning their citizens to leave Ukraine, indicating that Western governments do not believe in a diplomatic solution.
Some commentators said tensions at the Ukrainian border are driving investors to flee into government bonds. This would ease the pressure on the Fed to raise interest rates quickly, as it would slow down 10-year Treasury yields. The 10-year yield was at 1.99 percent on Monday evening, after a peak of more than 2 percent last week.
Speaking to CNBC on Monday, James Bullard of the St. Louis Fed said the Fed should hurry to raise interest rates as inflation rises so much. The statements don’t really come as a surprise. Last week, Bullard said the Fed should have raised interest rates by a full percentage point by July.
Company news
Peloton shares fell more than 5 percent. The new CEO denies that the company that makes fitness equipment is being sold and wants to focus on growth.
Shares of Splunk rose nearly 9 percent, after reports that Cisco Systems would be more than $ 20 billion for the software company. It would be the largest acquisition for Cisco ever. Cisco loses more than half a percent.
Lockheed Martin is canceling a deal with Aerojet Rocketdyne, the aircraft maker reported, after competition watchdogs took legal action last month to block the takeover. The stock fell about 2 percent on Monday.
Athletic shoe stores are not getting enough sneakers, even from popular brands like Nike, The Wall Street Journal reported. Scaling up production and delivery after the corona crisis remains problematic. Nike rose about one percent.
The Texas prosecutor has filed a lawsuit against Meta Platforms, Facebook’s parent company, over deprecated facial recognition software that allegedly invaded Texans’ privacy. The stock lost around one percent.
S&P 500 index 4.401,67 (-0,4%)
Dow Jones index 34.566,17 (-0,5%)
Nasdaq Composite 13.790,92 (-0,00%)
ASIA
Asian stocks were mostly lower on Tuesday.
Nikkei 225 26.870,82 (-0,8%)
Shanghai Composite 3.434,74 (+0,2%)
Hang Seng 24,259.86 (-1.2%)
EVALUATE
The euro/dollar was trading at 1.1315 this morning. As the US markets closed on Monday, the currency pair moved at 1.1304.
USD/JPY Yen 115,32
EUR/USD Euro 1,1315
EUR/JPY Yen 130,48
MACRO-AGENDA:
00:50 Economic growth – Q4 vlpg (Jap)
06:30 Industrial Production – Fourth Quarter (Jap)
08:00 Unemployment – December (UK)
09:30 Household consumption – December (NL)
09:30 Economic growth – Fourth quarter vpg (NL)
09:30 International trade – December (NL)
11:00 Economic growth – Fourth quarter vlpg (eur)
11:00 Trade Balance – December (eur)
11:00 ZEW Economic Sentiment – February (Ger)
14:30 Empire State index – Februari (VS)
14:30 Producer Awards – January (US)
COMPANY NEWS:
07:00 DSM – Fourth quarter figures
07:15 Randstad – Fourth quarter figures
07:00 Volkswagen – Fourth quarter figures (Germany)
13:00 Restaurant Brands International – US Fourth 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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