(ABM FN-Dow Jones) The European stock markets will open a deep red on Monday.
IG foresees an opening loss of 400 points for the German DAX and a minus of 162 points for the French CAC 40. The British FTSE appears to be opening 73 points lower.
Market analyst Salah Bouhmidi of IG points to the “European energy crisis that is spreading”. The German stock market in particular suffers from this. “The support at 12,800 is being broken and could indicate a volatile continuation of the September downtrend for the DAX.”
Stock markets in Europe ended significantly higher on Friday. After what was a negative week across the board, the solid US jobs report offered European markets a breather, said market analyst Michael Hewson of CMC Markets.
The focus now shifts to the European Central Bank’s interest rate decision, which will raise interest rates further next Thursday. The question is by how much: 50 or 75 basis points.
Economist Carsten Brzeski of ING thinks that 75 points is “a bridge too far” for the pigeons within the ECB, but does not rule out such an increase completely.
On a macroeconomic level, the eurozone focused on a German trade balance on Friday, with the surplus shrinking due to declining imports and exports.
Eurozone producer prices rose 4.0 percent on a monthly basis in July and 37.9 percent on an annual basis. An increase of 3.0 percent on a monthly basis and an annual increase of 37.0 percent was expected. In June, the increases were 1.1 and 35.8 percent respectively.
CEO Ben van Beurden plans to resign from Shell in 2023. This was reported by Reuters news agency on Friday, citing sources. Shell itself announced the sale of its stake in California’s Aera Energy. The deal is worth nearly $2 billion. Shell rose around 2 percent in London.
Ryanair carried more passengers in August than in the same month a year earlier, when air traffic was still suffering from the corona pandemic. Ryanair fell slightly in London.
In Paris, Société Générale did good business, with a plus of almost 5 percent. Crédit Agricole and BNP Paribas rose about 3 percent. There were no descenders in the CAC 40.
In Frankfurt, Volkswagen was the leader, with a profit of almost 7 percent and Deutsche Bank rose 5.5 percent. Henkel was the only loser in the DAX, falling around half a percent.
Euro STOXX 50 3,545.85 (+2.6%)
STOXX Europe 600 415.97 (+2.0%)
DAX 13,050.27 (+3.3%)
CAC 40 6,167.51 (+2.2%)
FTSE 100 7,281.19 (+1.9%)
SMI 10,891.71 (+2.1%)
AEX 678.57 (+1.7%)
BEL 20 3,614.82 (+2.3%)
FTSE MIB 21,921.26 (+2.9%)
IBEX 35 7,932.20 (+1.6%)
Wall Street will be closed Monday for Labor Day in the United States.
US stocks ended lower on Friday. Much attention was paid to the US jobs report. In August, 315,000 jobs were added, while the market expected 318,000 jobs. Unemployment stood at 3.7 percent, against an expected 3.5 percent. Average hourly wages rose 5.2 percent year-on-year to $32.36. The employment rate was 62.4 percent.
According to market analyst Philip Marey of Rabobank, the rise in unemployment may be positive.
“This is due to the entry of 786,000 people into the working population. This may be due to, for example, the ebbing effect of the corona support. For the Fed, this is a signal that at least people are still looking for work and that reduces the great tension. on the American labor market and tempering wage developments and thus inflation and therefore the need to accelerate even more monetary than is already the case,” said Marey.
IG market analyst Salah Bouhmidi thinks the continued strong labor market is reason for the Fed to “raise interest rates by 75 basis points at its next meeting. This could increase pressure on equity markets later in the month,” he warned.
Some market experts described the job numbers as a “goldilocks report” because it was spot on. Not too strong, so that the Fed would have to intervene even more aggressively, but also not so weak that the US economy is further compromised.
“From a market perspective, this continues the discussion about increasing 50 or 75 basis points,” said Anthony Saglimbene, market strategist of Ameriprise Financial.
A majority of the market is still expecting a 75 basis point hike, according to the FedWatch Tool, but Saglimbene thinks US inflation data coming later this month will be the deciding factor for the Fed.
It was also announced on Friday that US factory orders fell unexpectedly in July. It was the first drop in nine months.
WTI oil cost $87 on Friday, slightly more expensive than Thursday.
The main gas pipeline to Europe, Nord Stream 1, will remain closed for the time being. This was reported by Bloomberg news agency Friday evening based on statements by the Russian manager Gazprom.
According to Gazprom, a technical problem has been identified and the pipeline will not operate until it is repaired. Nord Stream was set to reopen on Saturday after a three-day maintenance.
If the pipeline remains closed, the energy crisis in Europe in particular will escalate, possibly resulting in energy rationing and a severe recession.
Broadcom rose about 2 percent. The US chip and software maker posted higher sales and profits in the quarter, thanks to solid demand. CEO Hock Tan said he expects that demand to continue into the current quarter.
Lululemon Athletica gained 6.5 percent after the sports and yoga apparel specialist reported better-than-expected revenue and profit for the past quarter.
Bed Bath & Beyond closed 8.6 percent lower on Thursday and fell another percent on Friday.
PagerDuty lost 2.5 percent. The software vendor reported better-than-expected revenue and a smaller loss for the second quarter.
S&P 500 index 3,924.26 (-1.1%)
Dow Jones index 31,318.44 (-1.1%)
Nasdaq Composite 11,630.86 (-1.3%)
Asian stocks traded on Monday. The Chinese services sector saw growth slow down in August, while the Japanese services sector even shrank slightly.
Nikkei 225 27,653.23 (+0.0%)
Shanghai Composite 3,189.54 (+0.1%)
Hang Seng 19,203.24 (-1.3%)
The euro/dollar traded at 0.9899 this morning. On Friday evening, the currency pair traded at 0.9947.
EUR/USD Euro 0.9899
EUR/JPY Yen 138.97
02:30 Purchasing managers index services – August def. (jap)
03:45 Services Purchasing Managers Index – August (Chi)
09:15 Services Purchasing Managers Index – August (Spa)
09:30 Services Purchasing Managers Index – August (Ita)
09:50 Services Purchasing Managers Index – August def. (fra)
09:55 Services Purchasing Managers Index – August def. (German)
10:00 Services Purchasing Managers Index – August def. (EUR)
10:30 Services Purchasing Managers Index – August Final (UK)
11:00 Retail sales – July (eur)
11:00 Retail Sales – July (Call)
3:30 pm Wall Street closed on Labor Day
00:00 OPEC+ . Meeting
– No agenda items
Source: ABM Financial News
From Beursplein 5, the editors of ABM Financial News closely follow 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.