October 4, 2023

Taylor Daily Press

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European stock markets are expected to open lower

European stock markets are expected to open lower

Image: Deutsche Boerse AG

(ABM FN-Dow Jones) European stock markets will open slightly lower on Tuesday, awaiting new inflation numbers from the euro zone.

IG expects an opening loss of 10 points for the German DAX and 17 points for the French CAC 40. The British FTSE is looking to open 8 points higher.

Stock markets in Europe ended lower on Monday.

“We may see the latest rate hikes from the Bank of England and the Swiss Central Bank, while the Fed may have already done so but has not explicitly signaled it yet, and the Bank of Japan may just be getting started, although perhaps not,” he said. “OANDA summarized an important week full of interest rate decisions.

“It goes without saying that it could be a rough ride for the markets,” market experts said.

While the European Central Bank raised interest rates last week, the US central bank is likely to keep interest rates unchanged next Wednesday. The FedWatch tool shows that the market estimates the chance of a breakout at 99 percent.

After the ECB and the Federal Reserve, the Bank of England will also make an interest rate decision on Thursday. The British Central Bank raised interest rates in August. Analyst Naeem Aslam of Zaye Capital Markets expects that the central bank is not done raising interest rates yet. It is based on an interest rate of 5.8 per cent, the highest level since 2007. The UK interest rate is now 5.25 per cent.

Company news

Bessie and Adin were the biggest losers in Amsterdam on Monday. PC stock fell 4 percent, and Aden stock became more than 6 percent cheaper. UBS lowered its price target for Adyen to €772. According to the analyst, the competition faced by payment specialists in Europe is underestimated. Bank of America was cautious about a recovery in demand at PC in the second half of the year and in 2024. ASML fell by almost one percent after the price target was cut by Bank of America.

Shares of semiconductor companies in the Nordic countries fell sharply by 10% in Oslo after the forecasts were cut.

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Moreover, semiconductor stocks in Frankfurt and Paris were also under pressure. Infineon shares lost nearly 3 percent and ST Microelectronics 1.5 percent.

In the German DAX index, Rheinmetall shares rose by more than one and a half percent. The Unibail-Rodamco-Westfield Index fell slightly in the CAC 40 after a positive analyst report from Barclays. Thus, the stock limited the damage in the index in which there was almost no upside.

Société Générale Bank suffered a loss of 12% after the strategic update. The French bank announced on Monday morning that it wants limited growth in the coming years, by investing capital only in online broker Boursorama and in car rental company ALD, while artificial intelligence software should help save costs.

Prosus stock fell more than 2 percent in Amsterdam. CEO Bob Van Dijk resigned immediately. In a clarification, Chairman Koos Bekker said that if the decision was made to continue with a new CEO, it would be better for the old one to leave immediately.

Euro Stoxx 50 4,242.15 (-1.2%)
STOXX Europe 600 456.72 (-1.1%)
DAX 15,727.12 (-1.1%)
CAC 40 7,276.14 (-1.4%)
FTSE 100 7,652.94 (-0.8%)
SMI 11,090.61 (-1.0%)
EEX 735.85 (-0.8%)
Bill 20 3,674.04 (-1.0%)
FTSE MIB 28,585.86 (-1.1%)
IBEX 35 9,482.10 (-0.7%)

US stocks

Wall Street is also expected to open slightly lower on Tuesday.

US stock markets remained close to home on Monday.

“Investors are becoming more concerned that the latest economic figures point to higher inflation and an interest rate environment in which interest rates stay higher for longer. This could impact the S&P 500, where very large technology companies have a heavy weighting,” SPI said. asset management.

Investors will wait until mid-week when the Federal Reserve makes its interest rate decision. An increase is not expected on Wednesday evening, but the market is interested in the dot plot with interest rate forecasts and new growth and inflation estimates.

Economists at ING find inflation data in recent months encouraging. But the Fed won’t want to take any risks, so while interest rates will be maintained this week, “the door to a potential future increase remains open,” according to the bank. However, economists do not expect this eventual increase to actually happen.

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The Fed will also release a new dot plot on Wednesday, from which it estimates the future range of the federal funds rate. In June, the chart showed an average of 5.6%, which means another increase in the interest rate from current levels, although the market is not counting on this.

A bullet chart showing the number of potential interest rate cuts in 2024 will likely be revised to lower cuts than the four 25 basis point steps the Fed considered in June, economists at Bank of America believe, who now expect three. Interest rates cuts in 2024

“They will say that given the resilience of the economy, fewer cuts are needed,” Bank of America said. “If this happens, it will come as a big surprise to the markets,” the US bank said.

On a macroeconomic level, the situation was calm on Monday. Confidence among US homebuilders was announced to have dropped from 50 to 45 in September, meaning sales conditions are currently negative. NAHB noted mortgage rates continue to rise above 7 percent, which continues to erode builders’ confidence.

Oil prices rose further on Monday. At a settlement of $91.48, a barrel of WTI became 0.8 percent more expensive. Last week, WTI became about 4% more expensive.

Oil prices are trading near annual record levels as Saudi Arabia and Russia maintain production cuts to create tight markets.

Company news

Nikola shares rose more than 33 percent on Monday after announcing the appointment of Mary Chan as its new chief operating officer.

The Wall Street Journal reports that Tesla may want to build a factory in Saudi Arabia, although CEO Elon Musk denies this regarding Company X. Tesla wants to sell twenty million cars annually by 2030, compared to 1.3 million cars in In 2022. That’s much twice that. The best-selling manufacturer of 2022, Toyota, with 10.5 million vehicles sold. The stock fell more than 3 percent.

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Shares of Ford, Stellantis, and General Motors closed clearly in the red zone, with losses ranging from one and a half to more than 2 percent, as workers continued their strike from Friday to Monday. At the end of last week, consultations resumed between the two major American automakers and the United Auto Workers union.

Online grocery company Instacart will make its stock market debut on Tuesday. This will be a good test of investor interest in agile gig economy companies with large online platforms. Following the success of ARM’s IPO, Instacart decided last week to increase its IPO price range from $26 to $28 to $28 to $30.

S&P 500 4,453.53 (+0.07%)
Dow Jones 34,624.30 (+0.02%)
Nasdaq Composite 13,710.24 (+0.01%)


Asian stock markets remained close inland, although Japan’s stock market fell slightly after it closed on Monday.

Nikkei 225 33,215.27 (-1.0%)
Shanghai Composite 3,126.52 (+0.0%)
Hang Seng 17,933.66 (+0.0%)


The EUR/USD was trading at 1.0679 this morning. On Monday evening, the pair was trading at 1.0685. The medium-term outlook for the dollar is deteriorating, according to Capital Economics. Analysts believe that consumer prices in the United States are falling more quickly than in Europe, and the Federal Reserve is more likely to cut interest rates than the European Central Bank.

USD/JPY 147.73 yen
EUR/USD EUR 1.0679
EUR/JPY 157.76

Overall agenda:
11:00 Inflation – August Final (EUR)
2:30 PM Residential Construction and Permitting – August (US)

Company News:
– There are no items on the agenda

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.