European stock markets are expected to open higher

(ABM FN-Dow Jones) The European stock markets will have a green opening on Monday. It promises another one Busy week with sufficient business figures and macroeconomic data.

IG predicts an opening gain of 62 points for the German DAX and a plus of 26 points for the French CAC 40. The British FTSE looks to open 28 points higher.

Stock markets in Europe ended higher on Friday, although the picture was mixed throughout the week. But most European stock markets were confronted with a loss on a weekly basis.

On a macroeconomic level, further attention was paid to purchasing data from the United Kingdom and the United States on Friday. For example, the British services sector grew slightly faster in April than a provisional estimate showed, with an index reading of 55.0.

Risers and fallers

In Frankfurt, Henkel led with a profit of 7.2 percent. Henkel raised its sales and profit expectations, despite sales falling in the first quarter. However, the market has already taken this into account. Rheinmetall also did good business again and climbed 4.7 percent.

Fresenius wants to reduce the debt by divesting activities. The first step is the sale of the 67 percent stake in Vamed to PAI Partners. The remaining 33 percent interest remains in the hands of Fresenius. Berenberg thinks that investors will appreciate the plans. The price closed 0.1 percent lower.

Daimler Truck Holding had a bad day and fell 3.8 percent. This comes after the company warned of a cooling market despite higher first-quarter profits that exceeded expectations.

In Paris, Edenred won 3.0 percent and Saint-Gobain 2.6 percent.

Credit Agricole reported solid first-quarter figures and its strength lay in the corporate investment bank and also in insurance, JPMorgan indicated. Retail showed a divided picture, according to JPMorgan analysts. These activities encountered headwinds, especially in France. The price closed 1.1 percent higher.

AXA did not see the sale of the German life insurance portfolio, but according to JPMorgan this has no further consequences for the results. AXA lost 1.4 percent.

Danone had a weak day, losing 2.9 percent, but the biggest loss was for Société Générale. Although it exceeded expectations with its first quarter figures, the stock lost more than 5 percent.

Glencore would consider a bid for Anglo American, according to Reuters news agency. Anglo previously rejected a $39 billion bid from BHP. Anglo closed 3.3 percent higher in London, Glencore 1.4 percent lower.

In Amsterdam, Besi led with a gain of 4.1 percent, followed by UMG with a gain of 3.6 percent, after solid quarterly figures. Deutsche Bank increased the price target for Universal Music Group by one euro to 33.00. The buy recommendation was maintained. UBS and Bank of America also increased the price target.

In Brussels it was Umicore’s day, which lost 4.5 percent yesterday, but was able to add 6.5 percent today for no apparent reason and against a background of heavy trading volumes. Galapagos lost 1.3 percent, after unsurprising quarterly figures.

Euro STOXX 50 4,921.48 (+0.6%)
STOXX Europe 600 505.53 (+0.5%)
DAX 18,001.60 (+0.6%)
CAC 40 7,957.57 (+0.5%)
FTSE 100 8,213.49 (+0.5%)
SMI 11,272.95 (+0.6%)
AEX 887.44 (+1.0%)
BEL 20 3,913.37 (+0.5%)
FTSE MIB 33,629.21 (-0.3%)
IBEX 35 10,854.70 (-0.16%)

US STOCKS

Wall Street is expected to have a broadly flat opening on Monday. The futures signal a gain of 4 points for the S&P and a loss of 5 points for the Nasdaq.

The American stock markets ended higher on Friday on the hope that the Federal Reserve will still cut interest rates this year. Or by achieving inflation targets or if the labor market deteriorates significantly.

On a weekly basis, the S&P 500 gained 0.6 percent, the Nasdaq rose 1.3 percent and the Dow Jones index rose 1.2 percent.

It was mainly a matter of waiting for the US job figures on Friday. Figures from the US Department of Labor showed that employment rose by 175,000 jobs in April, while the market expected an increase of 240,000 jobs. Unemployment rose from 3.8 percent to 3.9 percent. And that was all a bit disappointing, although the expected wage growth was somewhat better than expected. But this was still 3.9 percent annually.

However, the disappointing job growth in April is not yet so alarming that the Fed will have to intervene soon. The central bank needs three to four more of these figures to be able to lower interest rates during the year. Market analyst Philip Marey of Rabobank said this to ABM Financial News on Friday.

According to ING, it was not very bad, but there are signs of weakening visible. “Perhaps Fed Chair Powell got an early look at the jobs report given his dovish-sounding press conference on Wednesday,” said economist James Knightley, referring to Powell’s comments after the interest rate decision. According to Knightley, it’s not a terrible jobs report, “but it is the first time in a long time that every part of the report is weaker than expected.”

According to ING, the market is therefore fully taking into account an interest rate cut of 25 basis points in September and a second cut before the end of the year, which should bring a total of approximately 50 basis points of cuts in 2024.

Still, Fed Governor Michelle Bowman warned on Friday that as far as she is concerned, an interest rate increase is not off the table as long as inflation in the US remains high. Earlier this week, Fed Chairman Jerome Powell seemed to hint at the interest rate decision that the market need not fear an increase.

The chance of an interest rate cut in June was less than 10 percent on Thursday. On Friday, that chance rose to 14 percent. The chance of an increase in July is now estimated at 36 percent and for September the chance is now 67 percent, according to CME’s FedWatch Tool.

On a macroeconomic level, further attention was paid to the figures for purchasing managers for services in the US on Friday. And that showed a somewhat mixed picture. S&P Global’s purchasing managers index showed a slight growth slowdown for April to 51.3, while ISM purchasing data pointed to an unexpected contraction in the American services sector. That index stood at 49.4 in April.

Oil prices fell further, with WTI oil down 1.06 percent at $78.11. On a weekly basis, this was a loss of no less than 6.85 percent, the largest weekly percentage loss since early February.

Interest rates fell again after the jobs report. For example, the American ten-year interest rate was 7 basis points lower at 4.50 percent and the euro/dollar rose to 1.0770.

Risers and fallers

Heavyweight Apple rose 6.0 percent after the American tech giant reported better-than-expected profit and revenue figures despite selling fewer iPhones. Apple will also buy back an additional $110 billion in its own shares.

Coinbase lost 2.5 percent, despite the American crypto platform comfortably exceeding expectations in the first quarter.

Biotech stock Amgen rose nearly 12 percent after reporting better-than-expected earnings, and the company gave a positive update on an experimental obesity drug. The group said it was “very encouraged” by an interim analysis of a Phase 2 trial of injectable weight-loss drug MariTide.

Expedia lost more than 15.3 percent. The online travel agency exceeded expectations but lowered its full-year revenue outlook.

Sector peer Booking actually rose 3.0 percent after the company reported better figures than expected. Chief Executive Glenn Fogel said the company had seen customers visiting Booking.com more often, with more travelers using their premium products.

Block’s shares fell 1.2 percent after the company rose about 7 percent at the opening. The financial technology company beat profit expectations as first-quarter revenue rose 19 percent, boosted by Bitcoin.

Cloudflare fell 16.4 percent. This came after the group reported better than expected results, but expectations for the whole of 2024 were considerably disappointing.

DraftKings shares fell nearly 3 percent. This is despite the company reporting better-than-expected revenue and profit and raising its 2024 guidance.

Shares of Live Nation entertainment rose more than 7 percent on better-than-expected first-quarter revenue. Management said it expects a strong stadium year in 2025 and continued growth in concert attendance.

S&P 500 index 5,127.79 (+1.3%)
Dow Jones index 38,675.68 (+1.2%)
Nasdaq Composite 16,156.33 (+2.0%)

ASIA

The Asian stock markets remained close to home on Monday.

Nikkei 225 Closed.
Shanghai Composite 3,137.36 (+1.1%)
Hang Seng 18,466.91 (-0.1%)

CURRENCIES

The euro/dollar was trading at 1.0761 this morning. On Friday evening the currency pair was trading at 1.0762.

USD/JPY Yen 153.91
EUR/USD Euro 1.0761
EUR/JPY Yen 165.92

MACRO AGENDA:
03:45 Purchasing managers index services – April (Chi)

09:15 Purchasing managers index services – April final. (Spa)

09:45 Purchasing managers index services – April final. (Ita)

09:50 Purchasing managers index services – April final. (Fra)

09:55 Purchasing managers index services – April final. (Gld)

10:00 Purchasing managers index services – April final. (EUR)

10:30 Purchasing managers index services – April final. (UK)

11:00 Producer prices – March (eur)

COMPANY NEWS:

07:00 PostNL – First quarter figures

07:30 TKH – First quarter figures

07:00 Siemens Healthineers – Interim figures (Dld)

13:00 Tyson Foods – First quarter figures (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.