Solid loss in Brussels | Beursduivel.be

(ABM FN) The Brussels stock exchange is making a big drop on Monday. Shortly after 11 a.m., the Bel20 index fell 1.5 percent to 4,086.28 points.

Wall Street ended solidly lower on Friday, but a recovery appears to be in the works this afternoon.

“Not bad numbers put an end to the stock rally, but the prospect of interest rate hikes by the Federal Reserve,” said ING investment manager Simon Wiersma. “Economic figures do not disappoint expectations at all and the quarterly figures of companies from the S&P 500 index have so far exceeded profits by an average of more than 8 percent in almost 80 percent of cases,” said Wiersma.

So far it was a quiet morning. Investors pay particular attention to the purchasing managers. The French services sector is doing less well in January than in December, while Germany showed a strong recovery. Growth slowed across the eurozone.

“Activity slowed for the second month in a row,” Markit said. Omikron took its toll. Consumers spent less at the start of the year, according to Markit economist Chris Williamson. However, the impact appears to be not too bad and the fact that the industry is actually performing better in January is encouraging, according to the economist.

The preliminary purchasing managers index for the US will follow this afternoon.

However, most attention this week will be on Wednesday evening, when the Federal Reserve makes a new interest rate decision.

“With further rising inflation numbers, traders are preparing for a Fed that may raise interest rates at a faster pace. That is the fear you are seeing in the market right now that caused the euro/dollar to slip below the support level of 1.1380 week. It just goes to show how important and influential these ‘boring’ interest rate markets are,” said currency analyst Joost Derks of iBanFirst.

The analyst mainly wonders what tone the Fed will adopt on Wednesday evening, when explaining the interest rate decision.

“The difficult thing for policymakers is to find the balance between preparing the market for interest rate adjustments without causing too much panic in the financial markets, while inflation is spiraling out of control.”

If the Fed chooses to continue on the chosen path, the “interest panic” will blow over again, according to Derks. And then the euro/dollar can make an attempt to look up the 1.14, the analyst suspects.

If the US central bank chooses to accelerate, Derks says there is a good chance that the dollar will continue its rise “and will test the euro/dollar low of 1.1185 at the end of 2021”.

The euro/dollar was trading at 1.1325 this morning. Oil became slightly more expensive and the US 10-year yield is at 1.726 percent.

Risers and Fallers

Proximus and Telenet managed to find their way up this morning, with price gains of 2.5 and 1.1 percent. The rest of the main stocks are falling. And Aperam and Galapagos are the biggest losers with losses of 4.6 and 5.3 percent.

UCB fell 2.1 percent. In Japan, UCB received the green light for bimekizumab for the treatment of the skin condition psoriasis. Good news, judges KBC Securities. Deutsche Bank took UCB off the buy list and lowered its price target from 115.00 to 95.00 euros. The bank sees few drivers for the stock in the short term.

Unified Post is up 0.6 percent, but Barco and IBA lose 3.9 and 5.2 percent.

In the smaller shares, Qrf rose 2.5 percent, but Celyad and Van de Velde lost 3.6 and 5.9 percent.

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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