European stock markets are expected to open lower

(EBMFN) European stock markets are heading for a red open on Tuesday, after Wall Street kept its doors closed on Monday.

IG expects an opening loss of 49 points for the German DAX and minus 17 points for the French CAC 40. The British FTSE looks set to open 4 points lower.

Stock markets in Europe were divided on Monday. The Stoxx Europe 600 index hit a new record.

ING saw little impact from the reopening of Chinese stock exchanges, after a long week of Chinese New Year celebrations.

“The American holiday may have an impact,” ING said, referring to Presidents' Day in the United States, which kept Wall Street closed on Monday.

Moreover, the situation was quiet on a macroeconomic level and there were only a few company-specific critical figures on the agenda.

Composite PMIs to be published on Thursday could cause movement, according to ING, especially for the euro.

“The consensus currently expects a limited rebound in euro zone PMI data, but all measures still show contraction,” ING said.

Minutes from the European Central Bank's latest policy meeting are also scheduled to be released on Thursday.

Deutsche Bank now expects a more gradual ECB easing cycle. The German bank expects the central bank to cut interest rates by 150 basis points this year, followed by interest rate cuts of 50 basis points in 2025.

“Overall, we still believe the first rate cut will come in April rather than June, but recent data and comments point to a more gradual easing cycle than we expected,” said Deutsche Bank, which now expects 25% cuts instead of June. More than 50 basis points at a time.

Company news

In the German DAX index, Rheinmetall shares achieved convincing gains, achieving gains of more than 4 percent. Adidas won 2 percent, otherwise profits were limited. Tire maker Continental ranked last on the Frankfurt Stock Exchange on Monday, losing nearly 4 percent. Shares of German automakers were also under pressure.

Bayer shares could move on Tuesday after the German company announced a major dividend cut after Monday's close to address its mountain of debt. Bayer wants to pay just €0.11 per share in 2023, compared to €2.40 in 2022. The stock rose another percent on Monday.

Financial stocks were rising in Paris, with an increase of more than one percent for Credit Agricole. BNP Paribas closed in the green by more than half a percent. Luxury brands such as EssilorLuxottica and LVMH also had a good day.

Defense company Thales lost nearly 5%, ending at the bottom of the CAC 40. ArcelorMittal was clearly under pressure as well, losing 3%.

UBS increased its price target on DSM-Firmenich while maintaining a Buy rating. The share rose by half a percent in Amsterdam. Heineken shares also rose half a percent in Amsterdam, despite Deutsche Bank cutting its price target. Buy recommendation remains.

The German bank increased its price target for Universal Music Group, with a buy recommendation unchanged. The stock rose more than half a percent. Shell received a cut in its price target from Berenberg, but the buy recommendation remained. The share rose nearly half a percent.

Umicore shares fell more than one and a half percent in Brussels, after the price target was cut by Berenberg, while maintaining Houden's advice.

Shares in London-listed Currys jumped more than 36 percent on Monday after Chinese e-commerce giant JD.com said it was considering a bid for the British electrical consumer goods retailer. This could lead to a bidding war with Elliott Investment Management, after the US hedge fund indicated last weekend that it was considering making a bid, valuing Currys at around £700m.

Euro Stoxx 50 4,763.07 (-0.1%)

STOXX Europe 600 492.39 (+0.2%)

DAX 17,092.26 (+0.2%)

CAC 40 7,768.55 (+0.00%)

FTSE 100 7,728.50 (+0.2%)

SMI 11,398.44 (+0.8%)

EEX 855.85 (-0.3%)

Bill 20 3,685.02 (-0.1%)

FTSE MIB 31,676.05 (-0.2%)

IBEX 35 9,944.80 (+0.6%)

US stocks

Wall Street is heading to open in the red on Tuesday, after US stock markets closed on Monday for Presidents' Day in the United States.

Indices in New York ended lower on Friday and also slowed on a weekly basis, as a rapid interest rate cut by the Federal Reserve became increasingly out of sight.

About 65% of the market now no longer expects a rate cut in May, while a cut in March is almost completely unlikely. According to CME's FedWatch tool, a large majority now expects the first rate cut in June.

The Federal Reserve is scheduled to release minutes from its latest policy meeting on Wednesday evening. “Markets found this meeting disappointing at the time because Pres [Jerome] Powell did not really indicate that interest rate cuts would be coming soon. Since then, economic news coming out of the United States seems to support and justify this position. “But any delay does not mean it will not happen,” said economist Luc Appin of Van Lanshut Kempen.

The Chicago Fed and composite PMI are also scheduled for release later in the week. Moreover, it is a relatively quiet week in the United States.

“It remains to be seen whether US PMIs can confirm last month’s sharp increase. The opportunity looks great given the strong economic data we have received across the ocean in recent weeks,” Abin said.

Earnings season is now past its peak, but there are still a number of interesting companies on the docket. In addition to a number of major retailers, such as Walmart and Home Depot, Nvidia opens its books on Wednesday evening.

According to analysts from CMC Markets, the market will mainly be interested in trading volume in the data center sector. Nvidia's outlook could also move the stock.

According to CMC, the options market is currently very bullish on Nvidia. This also means that the company has to significantly exceed expectations, as Meta has done before.

Of the 396 companies in the S&P 500 that have reported quarterly numbers so far, 78 percent beat analysts' earnings expectations by an average of 7.5 percent. “The result is excellent, prompting a number of analysts and strategists to increase their target price for the S&P 500 before the end of this year,” said Simon Wiersma of ING.

S&P 500 5,005.57 (-0.5% – Friday closing position)

Dow Jones 38,627.99 (-0.4% – Friday closing position)

Nasdaq Composite 15,775.65 (-0.8% – closing position on Friday)

Asia

Asian stock markets fell broadly on Tuesday.

Nikkei 225 38,368.44 (-0.3%)

Shanghai Composite 2,901.37 (-0.3%)

Hang Seng 16,097.92 (-0.4%)

Currencies

The EUR/USD was trading at 1.0770 this morning. On Monday evening, the currency pair was trading at 1.0766.

USD/JPY 161.96 yen

EUR/USD EUR 1.0770

EUR/JPY 150.41

Overall agenda:

06:30 Consumer Confidence – February (Netherlands)

06:30 Investments – December (Netherlands)

4:00 PM Leading Indicators – January (US)

Company News:

07:00 Worldline – Q4 numbers (France)

1:00 PM Home Depot – Q4 Numbers (US)

13:00 Walmart – Q4 numbers (US)

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.