(ABM FN-Dow Jones) European stock markets will open higher on Wednesday, pending Nvidia data and some preliminary PMIs.
IG expects an opening gain of 48 points for the German DAX, as well as a 14-point gain for the French CAC 40 and an 8-point gain for the British FTSE 100.
European stock markets closed higher on Tuesday, supported by an initial rally in the US’s Nasdaq, which benefited technology stocks in Europe.
Optimism about Nvidia’s results, which could benefit greatly from the boom in online AI applications, appears to have led to higher prices. Trade in Asia was also positive on Tuesday.
Investor attention was also focused on the upcoming annual meeting of central bankers in Jackson Hole. According to Niels Christensen of Nordea Bank, the markets are pricing in “very quickly” interest rate cuts by the Fed.
He says that with inflation soaring and a very strong job market, it will take some time for the economy to slow down. “The Fed says interest rates will stay high for longer and the market is not listening.” Christensen believes that the dollar may strengthen after recent strong US economic data on expectations of further interest rate hikes by the Federal Reserve.
After the gains in the Nasdaq index, semiconductor stock prices rose. ASMI and ASML shares rose 2.8 and 3.3 percent in Amsterdam, and ST Microelectronics rose 2.5 percent in Paris. Infineon shares rose 2.7 percent in Frankfurt.
Steel company ArcelorMittal was also among the strong stocks that rose after positive figures on global steel production, as well as train builder Alstom. Industrial company Siemens and software giant SAP also won.
Shares in consumer goods makers such as L’Oreal, Pernod Ricard and Danone fell, as did supermarket names Ahold and Carrefour.
The Adyen payment company remained the biting dog. The stock fell 1.5 percent in Amsterdam.
ARM Ltd, the British company that designs the circuits found in billions of electronic devices, reported a drop in profits of more than 50 percent in the past quarter ahead of an IPO that is likely to be the largest of the year.
Euro Stoxx 50 4,260.75 (+0.90%)
Stokes Europe 600 451.70 (+0.68%)
DAX 15,705.62 (+0.66%)
CAC 40 7,240.88 (+0.59%)
FTSE 100 7,270.76 (+0.18%)
SMI 10,875.68 (+0.25%)
EEX 738.21 (+0.63%)
Bell 20 3,627.80 (+0.91%)
FTSE MIB 28,164.99 (+0.64%)
IBEX 35 9,314.00 (+0.55%)
Wall Street will open in the green on Wednesday, after closing mostly lower on Tuesday, pulling back after a positive start, on the back of modest results from retail chain Macy’s and downgrades in banks’ credit ratings.
Technology stocks were still hot on Monday with Nvidia being one of the biggest gainers ahead of Wednesday’s quarterly earnings. Expectations about Nvidia’s results are high due to the hype surrounding the AI applications the company believes will benefit from it. “Nvidia better meet its $11 billion revenue guidance for last quarter or there’s a chance we’ll see a significant downward correction,” Swissquote warned.
Meanwhile, attention has also turned to the annual meeting of central bankers in Jackson Hole, Wyoming. There, Fed Chair Jerome Powell will deliver a speech that “has the potential to become the markets’ next test,” Interactive Investor’s Richard Hunter said. The big question is whether interest rates will be raised again, and how quickly they will be lowered again. “The battle against inflation is far from over, as we saw with the latest consumer price index,” Hunter said.
Credit rating agency S&P Global Ratings on Tuesday downgraded KeyCorp, Comerica and other banks. These banks are facing higher funding costs now that customers have moved their savings to other banks that offer higher savings rates. At the same time, another source of liquidity for banks, safe-haven securities, has fallen in value.
After rising to a new high of 4.339 per cent on Monday, the highest level since 2007, the 10-year yield fell again on Tuesday.
On the macroeconomic level, things were quiet. On Tuesday, 2.2 percent fewer existing homes were sold in the US in July than in June. The average selling price rose by 1.9 percent.
Higher mortgage rates have made selling their homes less attractive to many homeowners. Real estate association NAR said on Tuesday that undersupply is a good thing for US homebuilders. The sector that produces new homes has already gained 31 percent in the stock market this year.
Retailer Macy’s reported 8 percent lower sales and suffered a loss last quarter. The company will save 200 million in costs. The stock fell by 14 percent.
The do-it-yourself retailer Lowe’s outperformed expectations and maintained expectations for the rest of the year. The stock rose 4 percent.
Chinese search engine Baidu generated more sales in the second quarter and saw profits rise by tens of percent. CEO Robin Lee was pleased with the performance and said that AI and generative language models offer great opportunities. The stock rose 3 percent.
Video conferencing service Zoom Video Communications posted more sales and profits after Monday’s close. Quarterly results were better than expected, but the stock fell 1.1 percent.
Microsoft has submitted a new acquisition plan for Activision Blizzard to the British Competition Authority (CMA). British authorities have approved Broadcom’s acquisition of VMWare.
Standard & Poor’s 500 Index 4,387.55 (-0.28%)
Dow Jones Index 34,288.83 (-0.51%)
Nasdaq Composite 13,505.87 (+0.06%)
Most Asian stock markets rose on Wednesday.
Nikkei 225 31,885.67 (+0.1%)
Shanghai Composite 3,103.10 (-0.6%)
Hang Seng 17,852.43 (+0.4%)
The euro / dollar was traded at 1.0858. At the close of the US stock markets on Tuesday, the currency pair was still trading at 1.0847 and at the close of the European stock markets, 1.0851 was on the boards.
US dollar / Japanese yen 145.63 yen
EUR/USD EUR 1.0858
01:30 Composite PMI – August (Japan)
06:30 Consumer Confidence – August (Netherlands)
06:30 Investments – June (Netherlands)
09:15 Composite PMI – August (France)
09:30 Composite PMI – August (Germany)
10:00 Composite PMI – August (EUR)
10:30 Composite PMI – August (UK)
1:00 PM Mortgage Applications – Weekly (US)
15:45 Composite PMI – August (US)
4:00pm New Home Sales – July (US)
16:00 Consumer Confidence – Aug vlpg (euro)
4:30 PM Oil Inventories – Weekly (US)
1:00 p.m. Coles – US second quarter numbers
13:00 Peloton – Q4 numbers for the US
22:00 Nvidia – Q2 numbers (US)
Source: ABM Financial News
ABM Financial News is a resource for stock market news, video and data, whether for real-time trading platforms and trading rooms or for online and offline informational publications. The information in this article is not intended to be professional investment advice or as a recommendation to make certain investments.
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