(ABM FN-Dow Jones) European stock markets will open higher on Monday.
IG expects an opening gain of 61 points for the German DAX and 22 points for the French CAC 40. It appears that the British FTSE Index will open 5 points higher.
Stock markets in Europe ended lower on Friday.
Investors were shocked by the news that SVB Financial, which focuses, among other things, on financing startups in Silicon Valley, has to issue new shares and sell assets at high discounts to support the balance sheet. Analysts also pointed to the bankruptcy of Silvergate, a bank that was primarily a lender to crypto companies.
Concerns that rapidly rising interest rates were causing a rapid increase in defaults led to a sector-wide sell-off of banks. Financials that are part of the S&P 500 fell on average more than four percent on Thursday.
“This is an issue that can affect all banks, including the big ones, because since the financial crisis of 2007/2008, banks have accumulated a lot of assets at skyrocketing prices, and they have had to pay almost no compensation for bank deposits, because interest rates have been there for so long. close to zero,” Swissquote Bank said.
This afternoon we focused on the US jobs report. Job growth remained strong in February, but unemployment also rose, while wage growth slowed. The latter is favorable for the Fed, according to market analyst Philippe Marie of Rabobank.
In Germany, final inflation was in line with preliminary readings. In the UK, it was found that the industry was producing less in January, but the drop of 0.3 percent was not surprising. British exports fell by about 2 percent, and imports fell by about 9 percent. On a monthly basis, the UK showed slight economic growth again in January, after contracting by half a percent in December.
European financial institutions came under pressure on Friday. Deutsche Bank fell more than seven percent. Société Générale lost 4.5 percent, and Crédit Agricole lost 2.5 percent. ING is down more than 4.5 percent, just like Aegon.
Real estate struggled again. Vonovia lost more than 3 percent, and Unibail-Rodamco-Westfield lost more than 2.5 percent.
In Paris, Eurofins Scientific took the lead with nearly 3 percent. Carrefour won by nearly one and a half percent. Schneider Electric and Legrand shares fell about 3.5 percent.
Fresenius Medical Care did well in Frankfurt, with profits of more than 2%. Other than that the earnings were very modest. Continental and Daimler Truck lost about 3.5 to 4.5 percent.
Euro Stoxx 50 4,219.11 (-1.6%)
Stokes Europe 600453.76 (-1.4%)
DAX 15,427.97 (-1.3%)
CAC 40 7,220.67 (-1.3%)
FTSE 100 7,748.35 (-1.7%)
SMI 10,765.26 (-1.7%)
Aix 743.03 (-1.4%)
Bell 20 3,746.75 (-2.0%)
FTSE MIB 27,281.96 (-1.6%)
IBEX 35 9,285.00 (-1.5%)
On Monday, US stock markets will enjoy a big green open, after ending lower on Friday. On a weekly basis, the three major indices lost about 4 to 5 percent, making it the worst week of 2023 so far.
Concerns about US financial bank SVB, which focuses on financing startups in Silicon Valley, also weighed on sentiment on Friday. SVB Financial is now considering selling. The California regulator has now closed the bank and assigned a receiver.
Trading at SVB Financial was halted on Friday due to the malaise, having already fallen more than 60 percent on Thursday.
The market also learned about the US jobs report, which will play a major role in the Federal Reserve’s decision at its policy meeting later this month, as well as inflation data next week.
In February there was a job growth of 311,000. The market was expecting an increase of about 200,000 jobs. The unemployment rate was 3.6 percent in February. That was 3.4 percent in January. Economists expected the rate to be flat for the month of February.
Earnings per hour last month increased by $0.08 to $33.09. On an annual basis, this was an increase of 4.6 percent. This was calculated at 4.8 percent.
Job growth for January was revised from 517,000 to 504,000 and for December from 260,000 to 239,000.
“The business data is as strong as it gets,” said market analyst Naeem Aslam of Zaye Capital Markets. “It is now almost certain that the Fed will raise interest rates by 50 basis points at the next policy meeting,” he added.
According to market analyst Philippe Marie of Rabobank, the jobs report suits the Fed well, particularly because of rising unemployment and sluggish wage developments.
With this report, the US labor market appears to be more balanced, as well as in terms of wage development. That means the chance that the Fed will choose to raise interest rates by 50 basis points on March 22 looks somewhat smaller, Mary says, but a lot will depend on the inflation rate for February next Tuesday.
The US 10-year interest rate was set on Friday evening at 3.687 percent. Oil prices rose on Friday, benefiting from a weaker dollar. Settling at $76.68, the price of a barrel of WTI was down 1.3 percent. On a weekly basis, the price of oil has lost nearly 4 percent.
Problems in the SVB are putting pressure on the financial sector. US Bancorp fell by 4 percent and First Republic Bank by about 15 percent. Goldman Sachs lost more than 4 percent.
Oracle closed down more than 3 percent after disappointing quarterly numbers.
DocuSign lost nearly 23 percent, even though the e-signature software company posted a profit last quarter, while revenue beat expectations.
The gap fell more than 6 percent after the clothing retailer reported a loss for the past quarter that was larger than a year earlier. Sales fell 6 percent to $4.2 billion.
S&P 500 3,861.59 (-1.5%)
Dow Jones 31,909.64 (-1.1%)
Nasdaq Composite 11,138.89 (-1.8%)
Asian stock markets are split this morning.
Nikkei 225 27,744.73 (-1.4%)
Shanghai Composite 3,255.77 (+0.8%)
Hang Seng 19,672.01 (+1.8%)
EUR/USD is trading at 1.0719 this morning. On Friday evening, the currency pair was trading at 1.0640.
US dollar / Japanese yen 134.34
EUR/USD EUR 1.0719
EUR/JPY JPY 144.00
06:30 Bankruptcies – Feb (NL)
07:30 Basic-Fit – Fourth Quarter Numbers (NL)
Source: ABM Financial News
Following editors from Beursplein 5 ABC Financial News Developments on stock exchanges, and the Amsterdam Stock Exchange in particular, closely watched. The information in this column is not intended as professional investment advice or as a recommendation to make certain investments.
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