(ABM FN-Dow Jones) European stock markets will open lower on Friday, following a speech by US Federal Reserve Chairman Jerome Powell on Thursday evening.
IG predicts an opening loss of 93 points for the German DAX and a minus of 41 points for the French CAC 40. The British FTSE looks set to open 56 points lower.
Stock markets in Europe ended higher on Thursday. Investment manager Simon Wiersma of ING noted that the stock markets are benefiting from the lower interest rates. “The further interest rates fall, the more positive the mood on the stock markets,” says Wiersma. For example, on Wednesday the US ten-year interest rate fell to the lowest levels since September 22.
On a macroeconomic level it was quiet. It was announced that consumer prices in China fell by 0.2 percent on an annual basis in October, after a slowdown a month earlier. Economists had previously expected a decline of 0.1 percent. The last time consumer prices fell in China was July this year. Then there was a price drop of 0.3 percent.
Producer prices in China fell again in October, although slightly less sharply than expected. On an annual basis, prices fell by 2.6 percent, after a decline of 2.5 percent a month earlier. Economists expected a decline of 2.7 percent.
Although this means deflation in China, ING prefers the term disinflation. “What we are seeing now is mainly the result of a supply glut and not a collapse in demand,” the bank said.
Siemens Energy did good business in Frankfurt, with a plus of more than 6 percent. Merck KGaA rose almost 4 percent after opening the books. Analysts think the bottom has been reached for the company, which became slightly more negative about the outlook for 2023.
Henkel actually became more positive about the year as a whole when presenting the quarterly figures. The share rose 3.5 percent in the DAX. Deutsche Telekom gained more than 2 percent after raising the outlook. Hannover Re was the biggest faller in the German main index with a loss of more than 2 percent.
After the third quarter figures and an investor day at which new targets were presented, the Adyen share in Amsterdam rose by no less than 38 percent. Degroof Petercam spoke of reassurance and Jefferies increased the price target.
Schneider Electric jumped more than 8 percent in Paris after issuing new targets. Worldline benefited from a significant increase in Adyen in Amsterdam and gained more than 5 percent.
ArcelorMittal ended up in the bottom regions of the CAC 40 after lower profits were achieved in the third quarter. The steel group said on Thursday that it remains positive about steel demand in the medium and long term. The share fell more than one and a half percent. Bottom line Airbus dropped almost 2 percent after announcing figures that turned out to be below expectations.
Euro STOXX 50 4,229.20 (+1.2%)
STOXX Europe 600 447.80 (+0.8%)
DAX 15,352.54 (+0.8%)
CAC 40 7,113.66 (+1.1%)
FTSE 100 7,455.67 (+0.7%)
SMI 10,644.99 (+0.5%)
AEX 749.16 (+2.0%)
BEL 20 3,478.91 (+0.7%)
FTSE MIB 28,644.09 (+0.7%)
IBEX 35 9,405.20 (+1.3%)
Wall Street is heading for a slightly higher opening on Friday.
The American stock markets ended lower on Thursday. The indexes in New York fell after a speech by Federal Reserve Chairman Jerome Powell. According to him, it is still too early to put a definitive end to the historic interest rate increases of the past two years.
The Fed raised interest rates this year to their highest level in 22 years to combat inflation by slowing economic activity. The US central bank aims for an interest rate that is “sufficiently restrictive” to bring inflation back to the 2 percent target over time.
“We are not confident that we have achieved this yet,” Powell said Thursday. However, he left the door wide open to maintaining the federal funds rate again at its current level of 5.25 to 5.50 percent at the next meeting in December.
Kathleen O’Neill Paese of the St. Louis Fed said Thursday that the central bank has room to wait for new macro data on the economy and inflation before deciding whether to raise rates further. In September, Paese was one of the Fed members who predicted one more rate hike in 2023.
The ten-year interest rate in the US has fallen in recent days from a sixteen-year high of around 5 percent to around 4.5 percent. On Thursday evening the yield was 4.64 percent.
The stock markets are currently moving in line with bond yields. “The fear is that those higher rates on the curve will act as a drag on the economy,” said James Ragan of DA Davidson.
The earnings season in the US is now coming to an end. About 88 percent of the companies in the broad S&P 500 index have presented their results. While profit expectations were often exceeded, declining demand resulted in only 62 percent exceeding revenue expectations.
Economic news was on Thursday regarding weekly new jobless claims in the US, which showed a slight decline, but did not come as a surprise.
WTI oil became half a percent more expensive on Thursday. In the previous days, oil prices fell sharply due to concerns about a weakening global economy and relief that the conflict around Gaza has not yet really spread to other countries in the Middle East.
Disney posted better-than-expected profits and added nearly 7 million “core subscribers.” The share gained almost 7 percent.
ARM reported better than expected results, but the outlook was mediocre and so the share fell more than 5 percent.
Lyft also reported a bigger-than-expected profit, projecting fourth-quarter revenue to be around 5 percent higher than the third quarter. The share still lost 6 percent, because the growth in the number of bookings clearly lagged behind that of rival Uber, which opened its books earlier this week.
Beyond Meat saw its losses shrink last quarter, but turnover was also under pressure. The share rose as much as 2.5 percent.
Shares of Warner Bros and Paramount closed in the green on Thursday after it was announced that a preliminary agreement had been reached between the actors and major film studios and streaming giants in Hollywood. This puts an end to a months-long strike. Netflix’s share fell slightly.
Tesla fell 5.5 percent on Thursday, after a sell recommendation from HSBC.
S&P 500 index 4,347.35 (-0.8%)
Dow Jones index 33,891.94 (-0.7%)
Nasdaq Composite 13,521.45 (-0.9%)
Asian stock markets traded lower on Friday.
Nikkei 225 32,548.64 (-0.3%)
Shanghai Composite 3,036.50 (-0.6%)
Hang Seng 17,233.27 (-1.6%)
The euro/dollar was trading at 1.0669 this morning. On Thursday evening the currency pair was trading at 1.0667.
USD/JPY Yen 151.36
EUR/USD Euro 1.0669
EUR/JPY Yen 161.50
06:30 Industrial production – September (NL)
08:00 Economic growth – Third quarter vlpg (UK)
08:00 Industrial Production – September (UK)
08:00 Trade balance – September (UK)
4:00 PM Consumer Confidence – November vlpg (US)
07:00 Allianz – Third quarter figures (Dld)
07:00 Aperam – Third quarter figures
07:00 IMCD – Third quarter figures
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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