Correction: European stock markets open significantly higher

(APMF IN-DOW JONES) European stock markets are set to open significantly higher on Thursday, after the Federal Reserve confirmed on Wednesday evening that it still expects three interest rate cuts in 2024.

IG Markets expects an opening gain of 189 points for the German DAX index, in addition to 79 points for the French CAC 40 index and a rise of 73 points for the British FTSE 100 index.

European stock markets closed almost flat on Wednesday, awaiting the Federal Reserve's interest rate decision on Wednesday evening. The French stock market fell only due to disappointing numbers from fashion giant Kering.

It was a relatively quiet trading session in the run-up to the US interest rate decision.

European Central Bank President Christine Lagarde spoke in Frankfurt. She said the ECB may cut interest rates in June if new inflation and wages numbers meet the ECB's expectations. “The coming months will help us build a clearer picture,” Lagarde said.

British inflation was lower than expected in February. The Bank of England is scheduled to make a decision on the interest rate on Thursday. German producer prices are still falling significantly, but slightly lower in February than in January.

Company news

In Paris, Kering shares fell nearly 12%. The company expects its sales to decline by 10 percent in the first quarter of this year. This is mainly due to the strong decline in Gucci's sales, especially in Asia, Kering said. Shares of its counterparts in the sector, such as LVMH, lost 1.6 percent, and Hermes shares rose slightly.

Teleperformance had a better day and was up 2.7 percent.

In Frankfurt, chemical groups Covestro and BASF advanced with gains of 2.2 and 2.5 percent.

Rheinmetall took a step back and lost more than 2 percent, but is already up 60 percent this year on expectations that the company will benefit from higher defense spending planned in Europe.

Continental shares lost 1.3 percent. According to South Korean financial magazine MoneyToday, Continental would be interested in withdrawing part of its activities. Citi Research may see this as a logical choice, given the German company's ambition to uncover hidden value.

Shares of Raiffeisen Bank fell by 8.7 percent after reports that the United States is pressuring the Austrian bank to halt its plans to buy a 1.5 billion euro stake in the construction group. This construction group will be under the control of sanctioned Russian oligarch Oleg Deripaska.

British insurance company Prudential lost about 5 percent. The insurance company posted better than expected profit numbers in 2023. Only in China are things not going well so far due to low interest rates. The insurance group remains committed to its intention to invest $1 billion and increase profits by 7 to 9 percent this year. JPMorgan did not rule out the possibility of increasing profits further in 2025.

Euro Stoxx 50 5,000.31 (-0.15%)

STOXX Europe 600 505.21 (+0.00%)

DAX 18,015.13 (+0.15%)

CAC 40 8,161.41 (-0.48%)

FTSE 100 7,737.38 (-0.01%)

SMI 11,618.63 (+0.35%)

EEX 860.54 (-0.01%)

Bill 20 3,685.41 (+0.12%)

FTSE MIB 34,293.29 (+0.09%)

IBEX 35 10,752.50 (+0.48%)

US stocks

Wall Street opened higher on Thursday, according to US futures.

US stock markets breathed a sigh of relief after the US interest rate decision and statements by Jerome Powell, who maintained expectations of three cuts before the end of 2024.

As expected, interest rates remained unchanged. Members also stuck to three interest rate cuts this year. Chairman Jerome Powell said after the meeting that if the Federal Open Market Committee's forecasts come true and inflation takes a bumpy road downward, lower interest rates will be justified. Powell said the timing of any declines would depend on monthly inflation data.

“We do not know whether the recent rise in inflation represents a bump in the road or something more,” the Chairman of the Board of Directors said in a press conference after the meeting.

Philippe Marie, market strategist at Rabobank, told ABM Financial News that three interest rate cuts this year are possible. However, the Fed does not want to be too quick due to still stubborn inflation, but it also does not want to wait too long, especially if the labor market deteriorates. Therefore, these numbers will be closely monitored in the near future.

Powell also noted that the pace of balance sheet reduction may slow. Not surprising, Mary said. Lower interest rates are a form of quantitative easing, and reducing the balance sheet is a form of quantitative tightening, and the Fed will have to find a new equilibrium, according to Marey.

At the macroeconomic level, it was announced to the stock exchange that the number of mortgage applications decreased by 1.6 percent last week. The market index fell from 201.5 to 198.1.

Oil prices closed lower on Wednesday after hitting multi-month highs in the previous session. Traders took into account, among other things, the recent US interest rate decision and lower US inventory numbers. In the week ending March 15, crude oil inventories fell by 2.0 million barrels to 445.0 million barrels.

The 10-year interest rate fell slightly to 4.28 percent and the euro/dollar rose to 1.0920. At the beginning of the trading day in Europe, the currency pair was still trading at the level of 1.0844, and when American stock exchanges closed on Tuesday, the level was 1.0865.

Company news

Paramount Global shares jumped 11.8 percent after a report stated that Apollo Global Management had offered $11 billion to buy its film and television studio.

Intel shares rose 0.3 percent after news that the US government gave Intel $8.5 billion to help finance new chip factories in four states. The group also expects to benefit from the tax scheme offered by the US Treasury. In addition, Intel may be eligible for federal loans of up to $11 billion.

BioNTech stock fell more than 4 percent after disappointing quarterly numbers.

General Mills was able to add more than 1 percent after the food company reported better-than-expected earnings for the past quarter, thanks to price increases and cost savings.

JetBlue Airways shares rose about 7 percent. This is after the company said that it is planning several [Amerikaanse] cities and reduce the number of flights from Los Angeles as the airline looks to focus more on better-performing routes.

Gildan Activewear shares rose 1.7 percent. The stock rose about 10 percent on Tuesday after the T-shirt maker said it had received confidential, non-binding expressions of interest in an acquisition.

Chipotle Mexican Grill's board of directors approved a stock split that gives shareholders 50 shares each. The stock rose 3.5 percent to new record levels.

JPMorgan Chase shares rose 1.3 percent after the group increased its quarterly dividends 9.5 percent to $1.15 from $1.05 per share.

Amcor shares fell 2.5 percent after the Australia-based packaging company said CEO Ron D'Elia would leave the company for health reasons.

Micron rose about 13 percent after the close. The company beat expectations again and raised its forecast for the next quarter

S&P 500 5,224.62 (+0.89%)

Dow Jones 39,512.13 (+1.03%)

Nasdaq Composite 16,369.41 (+1.25%)

Asia

Asian stock markets rose on Thursday.

Nikkei 225 40,799.47 (+2.0%)

Shanghai Composite 3,083.34 (+0.1%)

Hang Seng 16,900.59 (+2.2%)

Currencies

The euro/dollar was trading at 1.0935. When US stock exchanges closed on Wednesday, the currency pair was still at 1.0919, and when European stock exchanges closed, shortly before the interest rate decision, the value was 1.0863.

USD/JPY 150.94 yen

EUR/USD EUR 1.0935

EUR/JPY 165.06

Overall agenda:

00:50 Trade Balance – February (Japan)

06:30 Unemployment – ​​February (Netherlands)

01:30 Composite PMI – March (Japan)

09:15 Composite PMI – March (France)

09:30 Composite PMI – March (DLD)

09:30 Swiss National Bank – Interest Rate Decision (Zwi)

10:00 Composite PMI – March (in EUR)

10:00 Bank of Norway – Interest rate decision (no)

10:30 Composite PMI – March (UK)

13:00 Central Bank of Turkey – Interest Rate Decision (Phase)

13:00 Bank of England – Interest Rate Decision (UK)

1:30 PM Help Requests – Weekly (US)

13:30 Philadelphia Fed Index – March (US)

14:45 Composite PMI – February (US)

3:00 PM Existing Home Sales – February (US)

3:00 PM Leading Indicators – February (US)

Company News:

00:00 IBA – Q4 numbers

9:00 PM FedEx – Q3 numbers (US)

21:00 Nike – Q3 numbers (US)

Correction: Mention of discounts in the title

Source: ABM Financial News

ABM Financial News is a resource for stock market news, video and data, both for real-time trading platforms and trading rooms and for online and offline media publications. The information in this article is not intended to provide professional investment advice or a recommendation to make particular investments.