(ABM FN) The Brussels Stock Exchange is expected to start slightly lower on Monday. Euro Stoxx 50 futures indicated a loss of several tenths of a percent an hour before the stock market bell. Wall Street is closed today in observance of Martin Luther King Day.
Bel20 lost 0.4 percent to 4,242.11 points on Friday. The index closed the previous week at 4,306.37 points. On the equity front, this year’s results have been very strong due, among other things, to the sector’s rotation from expensive technology stocks to value stocks and cyclical stocks, due to the potential for higher interest rates.
Investors are increasingly convinced that the Federal Reserve will raise interest rates as early as March, driving up bond yields and volatility in stock trading. The yield on the 10-year US Treasury was around 1.80 per cent this morning. At the beginning of the trading year, the interest rate was still around 1.50 percent.
The rise in interest rates is mainly due to the sharp rise in inflation, which has forced central banks to warn that they are easing monetary policy in an attempt to stem the rise in prices. It was announced last week that the US inflation rate was 7.0% in December, and core inflation was 5.5%.
Economists at Deutsche Bank believe that US inflation will peak in January, but will decline thereafter. Economists note that the omikron variant of the coronavirus appears to be milder than expected, easing concerns about further disruption to the global supply chain. This turmoil is seen as an important reason for the rise in inflation.
Meanwhile, investors are looking forward to the start of earnings season, which gets a full international start this week, so that attention isn’t just focused on interest rates and the corona. In recent years, the quarterly earnings season has also often been favorable for investors, resulting in many better-than-expected reports and higher stock markets.
On Wall Street, investment bank Goldman Sachs and Morgan Stanley, food giant Procter & Gamble and streaming service Netflix come in with the numbers. And judging by the numbers, Netflix already announced Friday night that it will raise its North American subscription prices from $13.99 to $15.49 per month. Traditionally, earnings season in Brussels begins a little later. Today the company’s agenda is still empty.
Wall Street kicked off the final race late Friday night in the lead-up to a long weekend, as a result of which the benchmark S&P 500 index closed in the green, 0.1 percent. In the middle of the trading day, a loss of more than 1 percent was still on the plates. The tech Nasdaq also gained more than half a percent, while the traditionally component Dow Jones lost more than half a percent. Wall Street also lost ground on a weekly basis in the second trading week of the new year.
The start of earnings season in the US, with numbers mainly from the money giants, received a mostly negative reception on Friday. Investment bank JPMorgan fell 6 percent, despite beating earnings expectations, while Citigroup and BlackRock also fell after their reports. Market analyst Michael Hewson of CMC Markets noted disappointing results in the trading activities of Citigroup and JPMorgan. Well Fargo closed 3.5 percent higher after posting better-than-expected earnings.
Asian stock markets are trading this morning. Hong Kong and Seoul give up 0.9 percent and 1.3 percent, respectively. Other major exchanges are trading in the green with modest gains.
In China, industrial production grew faster in December, but the increase in Chinese retail sales actually slowed. In 2021, the Chinese economy grew by 8.1%. In the fourth quarter, growth was only 4.0 percent. Growth last year was mainly in the first half of the year, after recovering from the Corona pandemic.
US oil futures are also up more than half a percent this morning. Last week, the price of oil futures rose 6% to $83.82 a barrel. Thus, oil investors are sending a signal that they do not expect the omikron variant to affect global mobility. The brutal crackdown on the uprising in Kazakhstan has also eased concerns about a possible disruption to Kazakhstan’s oil exports.
Federal Share and Investment Corporation announced a 6.3 percent stake in Ageas.
Azelis has acquired a majority stake in Catalite, the Thai distributor of specialty chemicals in the personal care market. Financial details not mentioned.
Retail Estates has sold a retail park in Lommel for 11.5 million euros.
Close positions on Wall Street
Techindex and Nasdaq closed up 0.6 percent on Friday at 14,893.75 points. The Standard & Poor’s 500 Index wiped out a loss to close 0.1 percent higher at 4,662.85 points, while the Dow Jones lost 0.6 percent to 3,591.81 points.
Pron: ABM Financial News
From Beursplein 5, Editors ABM Financial News Keep a close eye on 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.
“Total coffee specialist. Hardcore reader. Incurable music scholar. Web guru. Freelance troublemaker. Problem solver. Travel trailblazer.”