(ABM FN-Dow Jones) European shares are set to open higher on Monday.
IG expects an opening gain of 151 points for the German DAX and 63 points plus for the French CAC 40. It looks like the UK FTSE will open 44 points higher.
Stock markets in Europe closed higher on Friday.
Market analyst Michael Hewson of CMC Markets saw a rebound at the end of a highly volatile trading week, with consumer goods stocks particularly hard hit.
On Friday, European stocks managed to stay in the green, but as the closing bell approached, some of the gains gave up after Wall Street’s drop.
The initial optimism was fueled by the news that the Chinese central bank cut its five-year yield by 15 basis points. “With this, it appears that China wants to give the housing market some extra breathing space. Demand for loans has recently fallen sharply, indicating a lack of confidence between businesses and consumers,” said investment expert Kevin Verstreet of Lynx.
ING investment director Simon Wiersma described the rate cut as an important boost for the Chinese economy. Suppose the closures in a number of [Chinese] Cities are relaxed? That would be a strong positive signal for stock markets, Wersma said, and it would also reduce fears of a recession that we think is exaggerated.
Producer prices in Germany rose faster in April than they did in March. On an annual basis, prices rose 33.5 percent last month. This was more than the 30.9 percent reported for the month of March.
UK retail sales rose 1.4 per cent month-on-month in April, when a 0.3 per cent decline was expected. The 4.9 percent year-over-year decline was a windfall gain compared to an expected shortfall of 7.2 percent.
Eurozone consumer confidence improved slightly in May. The preliminary index came in at negative 21.1 compared to negative 22 in April.
Air France-KLM is in talks with Apollo Global Management about a 500 million euro capital injection. The stock gained one percent.
In Paris, Unibail-Rodamco-Westfield led the way with more than 3 percent. Xavier Niel increased his stake in Unibail to 27.07 per cent. The French billionaire has no plans to control Unibail, but he wants to expand his stake further.
Last but not least in the CAC 40 were luxury brands Hermes and LVMH, which lost an average of 2%.
It was another good day for Merck KGaA in Frankfurt. The stock gained nearly 3 percent. HelloFresh has also done a good job in DAX.
Reinsurers Munich Re and Hannover Re have bottomed out, taking losses of 1 to 3 per cent, possibly due to severe weather that has plagued parts of Germany yesterday and today.
Euro Stoxx 50 3653.51 (+0.4%)
Stokes Europe 600431.10 (+0.7%)
DAX 13981.91 (+0.7%)
CAC 40 6285.24 (+0.2%)
FTSE 100 7,389.98 (+1.2%)
SMI 11,308.98 (-0.00%)
Ax 682.96 (+0.7%)
BEL 20 3923.17 (+0.8%)
FTSE MIB 24,095.00 (+0.1%)
IBEX 35 8,484.50 (+0.9%)
US property rights
US futures are anticipating a higher open on Monday.
Wall Street closed mostly higher on Friday. Investors initially responded favorably to the interest rate cut by China’s central bank. After that, the markets sank and it appeared that the S&P was entering a bear market. A late shift in New York prevented it.
Stock markets came under pressure last week due to concerns about the global economy and a possible recession. Investors are questioning how robust the Fed will respond to China’s high inflation and coronavirus lockdowns. The latter causes slower growth and ongoing supply chain problems.
Disappointing quarterly reports from retailers such as Walmart, Kohl’s and Target also raise fears of a recession.
“Stock markets are still fragile. The list of investor concerns is growing,” said Fouad Razakzadeh, market analyst at City Index and Forex.com.
The market expert said: “Inflation. High interest rates. Low economic growth. Stagflation. Recession. Perhaps most importantly for stocks: the Fed is not there to provide a buffer as it once was.”
The Dow lost more than 3 percent last week and is now on its longest losing streak in 90 years. The S&P and Nasdaq indices lost about 3.5 and 4.5 percent on a weekly basis, respectively.
The price of oil rose slightly on Friday. At a settlement of $110.28, the price of a barrel of West Texas Intermediate is nearly half a percent. On a weekly basis, the price of oil has remained almost stable.
Applied Materials reported lower-than-expected profits in the second quarter of the current fiscal year, in part due to ongoing supply chain issues. The outlook was also disappointing, with the stock already under pressure after trading Thursday. On Friday, the stock lost 4 percent.
Deere raised its forecast after stronger-than-expected numbers in the second quarter of the current disrupted fiscal year. The stock continued to decline 14 percent.
Growth stocks came under pressure on Friday. Nvidia lost 2.5 percent and Tesla lost 6.5 percent.
After heavy losses earlier this week, Walmart and Target closed higher on Friday.
S&P 500 Index 3,901.36 (+0.01%)
Dow Jones 31261.90 (+0.03%)
Nasdaq Composite 11,354.62 (-0.30%)
Asian stocks were traded on Monday.
Nikkei 225 26914.49 (+0.7%)
Shanghai Composite 3,131.80 (-0.5%)
Hang Seng 20327.28 (-1.9%)
The EUR/USD is trading at 1.0588 this morning. When US markets closed on Friday, the currency pair moved at 1.0556.
US dollar / Japanese yen
EUR / USD EUR 1.0588
EUR / JPY 134.93
00:00 Owner Existing Home Prices – April (Netherlands)
10:00 Ifo Business Confidence – May (Germany)
14:30 Chicago Fed Index – Apr (US)
There are no items on the agenda
Source: 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.
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