You can go back to bed, because there probably isn’t much to do at the fair today. The futures indicate a flat to slightly lower open and the agenda is not very exciting.
Yesterday the AEX managed to end higher after two losing days. Today will probably be a bad day, if the futures are anything to go by. Perhaps the European producer prices or the minutes of the previous ECB meeting can cause some commotion, because everything now revolves around interest rates, which will probably fall somewhat sooner in Europe than in the US.
Interest rates will also be the context in which we must view tomorrow’s US labor market report: the figure that investors have been looking forward to all week. The ADP report (see below) showed that the labor market is still robust and that gives the Fed room to wait and see how inflation develops.
Economists expect unemployment to remain neatly below the 4% limit used by the Fed. Probably 200,000 jobs have been added, slightly less than last month (275K). But hourly wages are likely to have risen to 4.3% annually, up from 4.1% the month before. And that can lead to a wage-price spiral. All in all, no figures that will urge the Fed to reduce interest rates quickly; on the contrary.
Japan is recovering, Chinese stock markets are closed
Most stock markets in Asia managed to avenge the losses of the previous days. The stock markets were closed in Shanghai and Hong Kong due to the Qingming Festival. The Nikkei briefly squeaked above 40,000 points again. Shares of companies that export a lot seemed to benefit from the weak yen. The prospect that the still very low Japanese interest rates will only be raised marginally, while American interest rates are likely to remain at high levels for a long time, puts pressure on the Japanese currency.
Here are the positions of the most important indices at a glance, clocked at 7:55 am:
- Nikkei 225: +1,1%
- Shanghai Shenzhen CSI 300: closed
- Hang Seng (Hong Kong): closed
- Kospi (South Korea): +1.1%
Wall Street is picking up a bit
The American stock markets managed to recover somewhat on Wednesday from the losses of Monday and Tuesday. The S&P 500 rose 0.4%, the Dow Jones index gained 0.2% and the Nasdaq finished 0.5% higher.
The gain is attributed to statements by Federal Reserve Chairman Jerome Powell at a Stanford University forum. But he didn’t actually say anything new. He repeated almost verbatim what he had already said at the press conference after the previous interest rate decision on March 20: that an interest rate cut is only appropriate if the Fed has more confidence that inflation will move sustainably towards the desired 2%.
Powell also pointed to the strong labor market, solid economic growth and inflation, which is falling, but not in a straight line. PCE inflation – the Fed’s main benchmark – was up 2.5% year over year in February, and core PCE inflation (excluding food and energy prices) was up 2.8%. That is still clearly too high, Powell confirmed. But he added that these figures have not significantly changed the picture. This may have provided relief on the financial markets.
Yesterday’s job figures from pay slip processor ADP, which serve as an appetizer for the main course that will be served tomorrow (the non-farm Payrolls), at least gave Powell the space to wait and see. More jobs were added than expected. And wages had also risen sharply: by 5.1% on an annual basis.
Other Fed officials this week delivered a similar message to Powell: Rates will definitely go down, but please be patient. Policymaker Raphael Bostic of the Atlanta Fed showed himself to be a somewhat bigger hawk. He takes into account only one interest rate cut this year if inflation figures disappoint, instead of the three now penciled in.
So nothing new under the sun. The fact that Wall Street did go up could also be that buyers jumped on the dip. For example, Tesla (+1.1%), which despite negative analyst reports, managed to recover somewhat from the share price fall of the previous day.
Perhaps it is also a factor that Tesla has the major Chinese competitor BYD again has overtaken as the largest seller of electric cars in the world. American car sales fell sharply in Q1, but BYD’s fell even sharper:
The indicators:
- The European stock markets are expected to open flat to slightly higher.
- Most stock markets in Asia recovered nicely, but China was closed.
- The CBOE VIX index (volatility) drops slightly to 14.33.
- The euro is slightly lower and is trading at 1.0831 against the dollar.
- Calm on the interest rate front. The Dutch ten-year interest rate is unchanged at 2.66%. The American is also taking a step back and records 4.36%.
- The gold price is flirting with the $2,300 mark and is slightly below that at $2,295.69 per troy ounce.
- Oil prices are rising slightly. A barrel of WTI now costs $85.58 and a barrel of Brent costs $89.45. Iran has announced retaliation for Israel’s attack on the Iranian embassy in Damascus, which is not helping oil prices.
- Bitcoin is down 0.6% at $65,518.67. $70,000 is still a long way off.
The AEX is expected to open flat.
News, advice, shorts and agenda
- 08:03 AEX probably starts slightly higher
- 07:48 AMG enters nuclear energy cooperation
- 07:47 Azerion closes credit facility
- 07:42 Strong start to the year for DGB
- 07:22 Asian stock markets are in the green
- 07:14 European stock markets open flat
- 06:54 Exhibition agenda: Dutch companies
- 06:54 Stock market agenda: foreign funds
- 06:54 Stock market agenda: macroeconomic
- April 3 Stock market update: AEX on Wall Street
- Apr 03 Wall Street ends divided
- Apr 03 Oil price rises
- 03 apr Wall Street wint
- Apr 03 Powell: still insufficient evidence for interest rate cuts
- Apr 03 European stock markets close higher
IEX also produces an overview of the most important news in the morning newspapers every morning. The complete news overview can be found here.
The AFM reports this shorts.
Many investors are not happy with the moisture problems at Alfen:
Advice
Few shifts, a small price target increase and decrease:
- Heineken: to €103 from €101 and buy – Barclays
- Air France-KLM: to €9.00 from €9.10 and sell – JP Morgan Research
Agenda: European producer prices and purchasing data
As mentioned, today’s agenda is not very exciting. We are mainly waiting for the American jobs report that will be published tomorrow.
At most, European producer prices for February could cause a small ripple on the market today, because that is a measure of inflation. These had fallen more than expected in January: by 0.9% on a monthly basis, while a decline of 0.2% had been expected. On an annual basis, producer prices fell by 8.6%. That was less sharp than the decline of 10.7% the month before. This is mainly due to energy prices, which were much higher last year than now.
Economists take into account that Eurostat will soon announce a price drop of 0.7% on a monthly basis and – just like in January – 8.6% on an annual basis.
The minutes of the latest ECB meeting could also trigger a market reaction if they contain a surprise.
Furthermore, Europe is the last to publish the purchasing managers’ indexes for services. China, Japan and the US had already passed yesterday. In China it is going to a crescendo. There is still growth in Japan, but less strong than expected. Two indexes were published in the United States: S&P Global and ISM. Sometimes they point in different directions, but yesterday they were unanimous: there is a slowdown in growth.
The purchasing data for the industry, which had already been published, also showed a mixed picture: contraction in Europe and Japan, growth in China and the US. The turning point is 50 points. Everything above indicates growth, a number below indicates shrinkage. These were the figures for the industry:
- Eurozone: decrease from 46.6 to 46.1 (so contraction)
- Netherlands: increase from 49.3 to 49.7 (smallest contraction in 17 months)
- Japan: increase from 47.2 to 48.2 (still shrinking)
- China (S&P): increase from 50.9 to 51.1 (growth and highest level in 13 months)
- China (government): increase from 49.1 to 50.8 (from contraction to growth)
- US (S&P): decline from 52.2 to 51.9 (third month of growth in a row, but growth slowdown)
- US (ISM): increase from 47.8 to 50.3 (faster growth than expected).
Finally, here is the full agenda for the rest of the day:
- 09:55 Dui purchasing managers index services March (final)
- 10:00 EU purchasing managers index services March (final)
- 10:30 UK purchasing managers index services March (final)
- 11:00 EU producer prices Feb
- 13:30 Minutes of last ECB meeting
- 2:30 PM US aid applications – weekly
- 14:30 US trade balance Feb
You’ve caught up again. Good luck and above all have fun today!
2024-04-04 06:34:33
#Boring #day #European #producer #prices #shaking #IEX.nl
