European stock markets are expected to open lower

(ABM FN-Dow Jones) European stock markets are set to open lower on Thursday after minutes from last night’s Federal Reserve meeting showed central bankers worried about a return to inflation.

IG expects an opening loss of 91 points for the German DAX, negative 38 points for the French CAC 40 and a decline of 27 points for the UK FTSE 100.

European stock markets closed divided on Wednesday, awaiting minutes from the US Federal Reserve’s latest policy meeting.

Analysts from CMC Markets said: “Recent comments from several FOMC policymakers seem to indicate the growing divisions between those who think a pause is appropriate now and those who want more tightening.” “It will be interesting to see if this turns out in the minutes.”

According to the CME FedWatch Tool, 89 percent of investors expect the Fed not to raise interest rates on September 20.

On the macro level, it was announced that the eurozone economy grew by 0.3 percent in the second quarter, after zero growth in the previous quarter.

Manufacturing in the eurozone produced 0.5 percent more in June than in May. On a yearly basis, production decreased by 1.2 percent.

Company news

Carlsberg’s results are improving over the past six months, the Danish brewer announced Wednesday morning, after the company had already issued a positive earnings warning on Tuesday. The turnover in the past six months was DKK 37.8 billion. Volumes increased by 0.8 percent. Today, Carlsberg also started a new share buyback program worth 1 billion DKK, which is equivalent to about 134 million euros. This program was already announced yesterday. However, the share fell 2.0 percent.

In Amsterdam, Prosus closed down 2.3 percent, after disappointing numbers from Tencent. Tencent’s revenue and profits rose by double digits last quarter, but analysts expected more.

In Frankfurt, Adidas shares rose 3.0 percent, while Rheinmetall fell 1.9 percent.

In Paris, Michelin was the most bullish, with profits of 1.0 percent, Hermes International rose 0.7 percent, while Eurofins Scientific shares fell by 2.1 percent.

Euro Stoxx 50 4,284.27 (-0.1%)
Stokes Europe 600455.29 (-0.1%)
DAX 15,789.45 (+0.1%)
CAC 40 7,260.25 (-0.1%)
FTSE 100 7,356.88 (-0.4%)
SMI 10992.31 (+0.1%)
Ax 756.85 (-0.3%)
Bell 20 3,644.18 (-0.8%)
FTSE MIB 28,169.96 (-0.9%)
IBEX 35 9350.50 (0.0%)

US stocks

Wall Street will open in the green on Thursday, after closing lower on Wednesday after the release of minutes from the Federal Reserve’s latest policy meeting, according to US futures.

This minutes from the July 25-26 policy meeting showed that most Fed officials expressed persistent concerns about “significant upside risks to inflation,” which may require further tightening of monetary policy.

Two officials from the moderate camp said they wanted to keep interest rates stable at the July meeting. In the end, the US central bank raised interest rates by 25 basis points to 5.25 percent to 5.50 percent.

The big question facing Fed officials was whether the level of interest rates is now “constrained enough” to bring inflation back to the 2% target.

The next meeting is scheduled for September 19 and 20. By then, there will be more new data on the labor market, inflation and other economic indicators. But if the signals do not change dramatically in the coming weeks, economists and market watchers are betting that the US central bank will not raise interest rates.

The stronger-than-expected increase in US retail sales in July caused some traders to revise their expectations for a rate cut next year.

There are concerns that higher retail sales will lead to higher interest rates for a longer period. According to Capital Economics, the data suggests that tighter monetary policy continues to have remarkably little effect on real economic activity, although they say this shouldn’t necessarily be an issue for the Fed as inflationary pressures appear to be abating quickly.

Right now, according to the CME FedWatch Tool, 89 percent of investors expect the Fed not to raise interest rates on September 20th.

Based on the minutes, ING concludes that the US central bank appears to be leaning toward a rate hike at its next policy meeting, though the bank doesn’t expect that to happen in the end.

On the macro level, it was announced in the United States on Wednesday that the number of mortgage applications in the United States decreased by 0.8 percent last week. The market index decreased from 194.5 to 193.0.

The number of building permits issued in the United States rose 0.1 percent month-on-month in July, while the number of homes under construction rose 3.9 percent.

US industrial production rose 1.0% in July, after declining 0.8% in June.

September futures for a barrel of West Texas Intermediate crude closed 2.0%, or $1.61, lower Wednesday at $79.38 on the New York Mercantile Exchange. The latest data released by the US Energy Agency (EIA) on Wednesday showed that US crude inventories fell last week.

On Thursday, three macro-level releases are scheduled for release in the US. The weekly pre-market support calls and the Philadelphia Fed will be issued, followed by the major indices later in the day.

Company news

Tencent saw profits grow much faster than revenue in the second quarter. This appeared, on Wednesday morning, from the numbers of the Chinese technology company, in which Prosus, which is listed in Amsterdam, is very interested. The stock rose by about 3.6 percent.

Target managed to surprise significantly in terms of earnings, but cut the forecast for 2023. The stock rose about 2.3 percent.

Intel decided not to move forward with the acquisition of Israeli semiconductor maker Al-Araj, because the regulator had not yet approved the plans. Presumably, it is the Chinese regulator that has not yet given the green light. The value of the acquisition amounted to more than 5 billion dollars. Intel’s share decreased by 3.6 percent.

S&P 500 4,404.33 (-0.8%)
Dow Jones 34,765.74 points (-0.5%)
Nasdaq Composite 13,474.63 (-1.2%)

Asia

Asian stock markets mainly fell on Thursday, but losses remained limited.

Nikkei 225 31,652.89 (-0.4%)
Shanghai Composite 3150.29 (+0.0%)
Hang Seng 18308.06 (-0.1%)

currencies

The euro/dollar was quoted at 1.0865. When the US stock markets closed on Wednesday, the currency pair was still trading at 1.0874 and when the European stock markets closed the position was still at 1.0905.

USD/JPY 146.39 yen
EUR/USD EUR 1.0865
EUR/JPY 159.05.000

Macro agenda:
00:50 Trade Balance – July (Japan)
06:30 Unemployment Rate – July (NL)
2:30 PM Support Requests – Weekly (US)
2:30pm Philadelphia Fed – August (US)
4:00 PM Leading Indicators – July (US)

Company news:
1:00 PM Walmart – Second Quarter Numbers (US)
22:00 Applied Materials – Third Quarter Numbers (US)

Source: ABM Financial News

ABM Financial News is a resource for stock market news, video and data, for both online and offline real-time trading platforms, trading rooms and media publications. The information in this article is not intended to be professional investment advice or as a recommendation to make certain investments.