(ABM FN-Dow Jones) European shares will open lower on Thursday, after a battle on Wall Street Wednesday night.
IG expects an opening loss of 84 points for the German DAX, minus 31 points for the French CAC 40 and a drop of 38 points for the British FTSE 100.
European shares closed lower on Wednesday after US stocks fell on weak retail results.
European investors were able to respond to US Federal Reserve Chairman Jerome Powell’s comments on Tuesday evening. Powell warned that curbing hyperinflation would not be easy. And the Fed chief warned it “could hurt a bit”. However, the banker believes that a fairly smooth landing is possible. According to Jim Reed, an economist at Deutsche Bank, Powell’s stance is not new, but he did note that interest rates could rise above neutral levels.
According to Naim Aslam, market analyst at AvaTrade, UK inflation meanwhile is “totally out of control”, putting pressure on the Bank of England to intervene. “But in reality, the Bank of England is in trouble and can’t do much,” the analyst said.
Britons saw an even greater rise in consumer and producer prices in April, with increases of 9 and 14 per cent year on year. Eurozone inflation was 7.4 percent in April, the same as in March, and just slightly lower than the previously reported 7.5 percent.
The European Union participated in the war in Ukraine. The European Union is lending the country 9 billion euros to pay the bill this year, similar to the United States. Ukraine is at war with Russia, which is trying to annex large parts of the neighboring country, as before with the Ukrainian coastal province of Crimea.
US oil inventories fell and US building permits and home construction also fell. Still, slashing US retailer Target’s earnings in half seems to scare investors even more. The Do-It-Yourself series also recorded a lower turnover.
Dutch and Belgian car sales fell further in April.
Siemens Energy confirmed on Wednesday that it is considering an offer to buy shares of Siemens Gamesa that it does not yet own. Siemens Energy confirmed this after the media reported the deal. Shares of Siemens Energy rose 1.3 percent and GEMSA nearly 13 percent.
ABN AMRO shares fell after the quarterly figures. The profit wasn’t too bad, but the costs were disappointing. The stock fell 12 percent.
Euro Stoxx 50 3,634.00 (-2.36%)
Stokes Europe 600434.13 (-1.10%)
DAX 13,868.50 (-2.16%)
CAC 40 6,242.00 (-2.17%)
FTSE 100 7,367.50 (-1.64%)
SMI 11,490.50 (-1.77%)
Aix 682.40 (-2.54%)
Bell 20 3,967.23 (-1.13%)
FTSE MIB 23,530.00 (-1.72%)
IBEX 35 8412.00 (-0.41%)
US property rights
Wall Street opens in the green on Thursday, according to US futures.
US stocks closed Wednesday with heavy losses, nullifying the recovery on Tuesday after major retail companies reported earnings under pressure.
Major retailers report profits are under pressure from rising costs, weak sales and supply chain disruptions. Target lost 25 percent after disappointing quarterly results. Dollar Tree, Dollar General and Costco Wholesale also posted the biggest price losses in years.
Retail reports are forcing Wall Street once again to realize that the global economy may plunge into recession. The controversy is not resolved yet, but stock markets have fallen sharply in recent weeks, not easing back much amid these concerns.
Inflation, which has not been very high in decades, is what keeps investors most interested. The big question is to what extent monetary policy makers want to tighten the financial environment. Federal Reserve Chairman Powell said on Tuesday that the Fed’s determination to curb inflation should not be questioned, even if it leads to higher unemployment. However, the banker believes that a fairly smooth landing is possible.
According to Jim Reed, an economist at Deutsche Bank, Powell’s stance is not new, but he did note that interest rates could rise above neutral levels.
The war in Ukraine, which is once again in danger of losing parts of the country after a major military invasion by neighboring Russia, has alarmed the market and caused energy prices to rise sharply.
As interest rates rise, bond prices fall as well, which are usually a safe haven when stocks are struggling.
It was calm on the macroeconomic front. It was announced before the fair that the number of homes under construction decreased slightly, while the number of licenses issued decreased more sharply.
Target saw its first-quarter profit halve to $1 billion, despite slightly higher sales. The supermarket chain pointed to high transportation costs and excess inventory that had to be disposed of. This compresses the margins. Target lowered its margin forecast for this fiscal year from at least 8 percent to about 6 percent. The stock fell 25 percent.
Lowe’s companies saw a slight drop in sales, but earnings per share rose faster than analysts had expected. The DIY series reiterated its predictions for this year. However, the stock fell 5 percent.
Walmart, which actually released a disappointing quarterly update yesterday, lost nearly 7 percent. The supermarket giant warned of margin pressures and lowered its forecast.
Netflix is letting 150 employees go on a new round of layoffs. Most of them work in the United States. The spokesperson said the layoffs are primarily related to the company’s new focus and not the individual performance of employees. The company previously stated that Netflix lost subscribers in the last quarter and it will only get worse in the current quarter. The stock closed down 7 percent.
The Dow Jones index lost 1,164 points on Wednesday, closing down 3.57 percent at 3,1490.07 points. The S&P500 fell 4.04 percent, also a rare strong decline for this broad index, to 3,923.68 points. The technology Nasdaq also lost 4.73 percent and closed at 11418.15.
S&P 500 Index 3,923.68 (-4.0%)
Dow Jones 31,490.07 (-3.6%)
Nasdaq Composite 11.418.15 (-4.7%)
Asian stocks fell across the board on Thursday.
Nikkei 225 26408.06 (-1.9%)
Shanghai Composite 3,083.39 (-0.1%)
Hang Seng 20179.30 (-2.3%)
The EUR/USD was trading at 1.0495. When the US markets closed on Tuesday, the currency pair was still moving at 1.0646 and when the European markets closed there were 1.0511 on the plates.
US Dollar / Japanese Yen 128.85
EUR / USD EUR 1.0495
EUR / JPY 135.22
06:30 Unemployment Rate – April (NL)
06:30 Industrial Production – March Final (YAP)
13:30 European Central Bank – minutes (EUR)
14:30 Support Requests – Weekly (US)
14:30 Philadelphia Fed Index – May (US)
16:00 Existing Home Sales – April (US)
13:00 Coles – US First Quarter Numbers
22:00 Applied Materials – US Second Quarter Figures
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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