European stock markets are expected to open lower.

(APMFN-Dow Jones) European stock markets are heading for a lower open on Wednesday. IG forecasts an opening loss of 80 points for the German DAX, -63 points for the French CAC 40 and a 20 point drop for the UK’s FTSE 100.

European stock markets closed mixed on Tuesday, as investors processed a slew of corporate earnings in the run-up to quarterly results from two major U.S. tech giants.

According to some investors, stock markets appear ready for a correction as the summer holiday season begins. “What we’re really concerned about is the level of valuations,” said Roger Aliaga Diaz, an economist at Vanguard. Such conditions make stocks ripe for a correction, he added, “although it’s hard to predict when that will happen.”

In the afternoon, fewer homes were sold in the US in May, while consumer confidence in the eurozone improved somewhat, though it remains weak.

Company News

Sartorius was a notable gainer, up 6.8 percent. Infineon shares fell, with the share price down 3.5 percent, ahead of results from Amsterdam peer ASMI.

SAP saw healthy momentum in its cloud business in the second quarter, with demand up 28 percent. SAP deviated from its industry peers, which are experiencing demand challenges. The stock rose more than 7 percent.

Porsche has cut its sales and return on investment forecasts for 2024. Instead of $42 billion to $44 billion, Porsche now expects sales of $30 billion to $34 billion. Revenue forecasts have also been cut. The price has fallen by almost 3 percent. Daimler Trucks lost more than 4 percent and Volkswagen closed down 1 percent.

Thales met expectations, but space margins were disappointing. The company expects pressure from fewer commercial communications businesses. The price fell 7 percent.

Givaudan performed better than expected in the first six months of the year. The flavor maker’s share price is still down 3.9 percent.

Edenried also lost heavily and had to give up 13.5 percent after the figures. Safran was the biggest winner in Paris, gaining 2.3 percent.

Banco de Sabadell reported better-than-expected second-quarter results and raised its outlook. The stock rose 1.5 percent on Tuesday. The share price is now 4 percent higher than Banco Bilbao Vizcaya Argentaria’s hostile bid, which was launched in May this year.

Spotify beat expectations on subscribers and revenue. Shares rose more than 10 percent.

Euro Stoxx 50 4,917.10 (+0.40%)
Stoxx Europe 600 XXX.XX (+%)
DAX 18,557.70 (+0.82%)
CAC 40 7,598.83 (-0.31%)
FTSE 100 8,167.37 (-0.38%)
SMI 12,285.59 (-0.09%)
AEX 914.97 (-0.22%)
Bill 20 4,036.10 (-0.04%)
FTSE MIB 34,637.75 (+0.07%)
IBEX 35 11,212.70 (+0.62%)

US Stocks

Wall Street opened in the red on Wednesday, according to U.S. futures.

U.S. stock markets also closed slightly lower on Tuesday, after investors grappled with a slew of corporate results.

US elections, market rotation, Taiwan’s future or the blue screen of death: investors may forget all that on Tuesday and go back to basics to analyze the quarterly results of major companies.

Some investors say the recent market moves have less to do with the U.S. presidential election, the Federal Reserve or even inflation than with high stock valuations. “What we’re really concerned about is the level of valuations,” said Roger Aliaga Diaz, an economist at Vanguard. Such conditions leave stocks ripe for a correction, he said.

Home sales fell faster than expected in June, weighed down by higher prices and mortgage interest rates, a report said Tuesday.

Company News

Tesla shares fell 3 percent after hours, after the automaker reported stronger-than-expected second-quarter sales but lower profits. Tesla cited a tough operating environment and said its approach to expanding with new models would deliver smaller cost savings than previously thought. The price also fell slightly in regular trading.

Alphabet shares rose 1.8 percent in after-hours trading. The Google parent company said investments in artificial intelligence helped boost sales and profits. YouTube ad turnover has been disappointing.

Lockheed Martin reported strong results and raised its 2024 outlook. The stock rose 5.6 percent.

Kimberly-Clark raised its 2024 outlook again on Tuesday, after the maker of Kleenex and Huggies diapers did so in April. The stock closed down 5.7 percent.

Coca-Cola Co. reported slightly lower net income on higher sales volume in the fourth quarter, but again raised its full-year outlook. The stock rose 0.3 percent.

NXP lost 7.6 percent. Although the Dutch chipmaker posted lower sales, profit margins improved. ING’s investment manager Simon Wiersma pointed to a disappointing outlook.

General Motors Co. raised its 2024 financial targets after beating Wall Street’s earnings expectations as the company restructures its loss-making self-driving cars and Chinese operations. The stock fell 6.4 percent.

UPS cut its forecast and reported lower earnings and revenue. The stock fell 12 percent.

Shares of Barbie maker Mattel fell 7.7 percent, largely erasing gains after takeover speculation on Monday. Private equity firm L Catterton is interested in acquiring the toy company, Reuters reported.

Visa and Texas Instruments also released numbers after hours. Visa lost 2 percent after hours after showing volumes fell in the new quarter, not for credit cards but for debit cards that are deducted directly from a bank balance.

Texas Instruments beat expectations and traded up 4 percent in after-hours trading.

S&P 500 Index 5,555.74 (-0.16%)
Dow Jones Index 40,358.09 -0.14%)
Nasdaq Composite 17,998.97 (-0.05%)

Asia
Asian stock markets were broadly lower on Wednesday. However, there was some good news from Japan, where the PMI pointed to economic growth again.

Nikkei 225 39,172.57 (-1.1%)
Shanghai Composite 2,918.27 (+0.1%)
Hang Seng 17,361.12 (-0.6%)

Currencies
The EUR/USD was trading at 1.0846. When US exchanges closed on Tuesday, the currency pair was still trading at 1.0859 and when European exchanges closed, it was still at 1.0846.

USD/JPY 154.58
EUR/USD EUR 1.0846
EUR/JPY 167.63

Overall agenda:
01:30 Composite PMI – July (Japan)
08:00 Consumer Confidence – August (Today)
09:15 Composite PMI – July (France)
09:30 Composite PMI – July (Germany)
10:00 Composite PMI – July (EUR)
10:30 Composite PMI – July (UK)
13:00 Central Bank of Turkey – Interest Rate Decision (Mod)
1:00 PM Mortgage Applications – Weekly (US)
15:45 Composite PMI – July (US)
4:00 PM New Home Sales – June (US)
4:30 PM Oil Inventories – Weekly (US)

Company News:
07:00 Banco Santander – Q2 figures (SPA)
07:00 BNP Paribas – Q2 figures (France)
07:00 Carrefour – Q2 figures (France)
07:00 Deutsche Bank – Q2 figures (DLD)
07:00 Orange – Q2 figures (France)
07:00 Remy Cointreau – Q1 figures (France)
07:00 UniCredit – Q2 figures (Italy)
1:00 PM AT&T – Q2 Numbers (US)
22:00 IBM – Q2 Numbers (US)

Source: ABM Financial News

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