(ABM FN-Dow Jones) The European stock markets will open lower on Wednesday.
IG predicts an opening loss of 42 points for the German DAX, a minus of 19 points for the French CAC 40 and a decline of 23 points for the British FTSE 100.
European stock markets closed mainly lower on Tuesday, after a round of profit-taking. The Portuguese PSI 20 even fell 2.5 percent after Prime Minister Antonio Costa resigned.
According to ING investment manager Simon Wiersma, investors are taking “some profits here and there” this week. And according to him that is very normal. “Prices never go up in a straight line.”
The previous gains were due to the belief that policy rates will not rise again. According to Frank Vranken of Bank Edmond de Rothschild, the financial markets are now pricing in at least one interest rate cut in the US by June 2024. However, the Fed will have to be careful with statements about its interest rate policy. On Monday, Neel Kashkari of the Minneapolis Fed told The Wall Street Journal that he would rather keep monetary policy tight for too long than do too little to reduce inflation.
UBS Group closed almost 2 percent higher on Tuesday. The Swiss bank beat expectations for underlying profit, contributing to the growth of former rival Credit Suisse, which UBS took over in March when the Zurich city rival was in danger of collapsing. The share closed 0.5 percent lower.
Car manufacturers were among the big decliners. Renault lost more than 3 percent and Stellantis more than one percent, Mercedes-Benz and Porsche around one percent and BMW one and a half percent.
Oil companies also lost ground due to the lower oil price. TotalEnergies closed more than 2 percent lower. Iberdrola lost one percent, Repsol almost 3 percent.
The Portuguese stock market suffered heavily after the unexpected resignation of the prime minister. Mota-Engil closed 5.5 percent lower and Banco Comercial Português lost more than 3 percent.
Euro STOXX 50 4,153.37 (-0.13%)
STOXX Europe 600 442.81 (-0.16%)
DAX 15.12.64 (+0.11%)
CAC 40 6,986.23 (+0.39%)
FTSE 100 7,410.04 (+0.10%)
SMI 10,571.03 (-0.05%)
AEX 735.74 (+0.40%)
BEL 20 3,463.70 (-0.31%)
FTSE MIB 28,395.90 (-0.69%)
IBEX 35 9,235.90 (-0.06%)
Wall Street opens in the red on Wednesday, according to US futures.
The American stock markets closed even higher on Tuesday, continuing their winning streak, while the oil price fell sharply. For the S&P500 it was the seventh consecutive day of gains, which last happened in November 2021. Technology stocks helped the Nasdaq to its eighth straight day of gains.
The rally in recent days followed a previous market correction that lasted about three months. The pessimism was then exaggerated, concluded Solita Marcelli of UBS Global Wealth Management. “While we see more upside potential in fixed income in the short term, the outlook for equity returns is positive in our view,” she said. According to UBS, it is a good time to expand a diverse, balanced portfolio that includes fixed income, equities and alternative investments.
An important driver for share prices was the yields on government bonds. Higher safe returns make shares less attractive. The ten-year US Treasury bond rose above 5 percent last month, which was the highest level in sixteen years. After a short-lived drop below 4.5 percent, the yield crept up again on Tuesday to 4.58 percent.
Investors continue to speculate about a possible Fed rate cut next year, especially if the US economy were to enter a recession. Fed officials emphasize that they do not want to cut interest rates too quickly before inflation has been tamed again.
The oil price fell more than 4 percent on Tuesday to $ 77.37 per barrel, the lowest closing level since July 21. Low oil prices can soothe concerns about inflation, according to analysts.
On a macroeconomic level, it was quiet on Tuesday. Trade data showed that US exports rose 2.2 percent in September, while imports rose 2.7 percent. The trade deficit was higher than expected at $61.5 billion.
Uber Technologies processed slightly more bookings in the third quarter of 2023 than the company itself expected, while turnover increased and the bottom line remained in the black. The outlook for the current quarter was better than expected. The share rose 3.7 percent.
NXP, the Dutch chip company listed on the Nasdaq, gained 1.6 percent. NXP managed to achieve its own expectations in the third quarter, but was quite cautious in its outlook on Monday evening.
Tripadvisor managed to beat expectations with its quarterly results. The share rose 11 percent.
Trading in WeWork shares has been halted since Monday. The ailing office landlord has now requested a deferment of payment. The company, which is near bankruptcy, was valued at $47 billion at its peak.
After the fair, electric vehicle maker Rivian opened its books. The share traded higher after hours, after a plus of 1.4 percent in regular trading.
S&P 500 index 4,378.38 (+0.3%)
Dow Jones index 34,152.60 (+0.2%)
Nasdaq Composite 13,639.86 (+0.9%)
The Asian stock markets were in the red on Wednesday, but with modest losses.
Nikkei 225 32,203.44 (-0.2%)
Shanghai Composite 3,049.51(-0.3%)
Hang Seng 17,622.25 (-0.2%)
The euro/dollar traded at 1.0684. When the American stock exchanges closed on Tuesday, the currency pair was still trading at 1.0696 and when the European stock exchanges closed the value was 1.0691.
USD/JPY Yen 150.60
EUR/USD Euro 1.0684
EUR/JPY Yen 160.90
08:00 Inflation – October final (Gld)
11:00 Retail Sales – September (eur)
1:00 PM Mortgage Applications – Weekly (US)
4:00 PM Wholesale Stocks – September (US)
07:00 Adidas – Third quarter figures (Dld)
07:00 Airbus – Third quarter figures (Fra)
07:00 Bayer – Third quarter figures (Germany)
07:00 Commerzbank – Third quarter figures (Dld)
07:00 Credit Agricole – Third quarter figures (Fra)
07:00 E.ON – Third quarter figures (Dld)
07:00 Siemens Healthineers – Annual figures (Dld)
10:00 PM AMC Entertainment – Third Quarter Figures (US)
10:00 PM Disney – Fourth Quarter Figures (US)
10:00 PM Lyft – Third Quarter Numbers (US)
Source: ABM Financial News
ABM Financial News is a supplier of stock market news, video and data, both for real-time trading platforms and dealing rooms and for online and offline media publications. The information in this article is not intended as professional investment advice or as a recommendation to make certain investments.
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