European stock markets open significantly higher

(APMF IN-DOW JONES) European stock markets are set for a higher open on Thursday, after Nvidia managed to beat expectations on Wednesday evening and rose almost 9 percent after the close.

In the fourth quarter, Nvidia reported revenue of $22.1 billion, an increase of 265 percent year over year. Nvidia itself used a forecast of roughly $20 billion and analysts consulted by FactSet were aiming for $20.4 billion.

Nvidia expects revenue of $24.0 billion for the current quarter. The market was expecting an expected sales volume for this quarter of more than $22 billion.

IG expects an opening gain of 106 points for the German DAX index, in addition to 59 points for the French CAC 40 index and a rise of 28 points for the British FTSE 100 index.

European stock markets were closed on Wednesday.

The focus on Wednesday was first on publishing the Federal Reserve's meeting minutes, in hopes of gaining more insight into the US central bank's future interest rate policy.

In addition, the market was looking forward to Nvidia's numbers, “because they are very important for overall market sentiment. As one of the largest technology companies, investors are hoping for strong results. Analysts are already positive,” Lynx analyst Yanni Helibut said. .

At a macroeconomic level, consumer confidence in the euro area was reported to have risen slightly in February, but remains well below the long-term average. The confidence index rose by 0.6 percentage points to -15.5.

Company news

HSBC Bank incurred a loss of $153 million in the fourth quarter of last year after reducing the value of its stake in a major Chinese bank. The bank expressed an optimistic tone regarding interest income. It expects these revenues to reach at least $41 billion by 2024, up from about $35.8 billion last year, an 18 percent increase year over year. HSBC shares fell more than eight percent.

Rio Tinto performed better than expected over the full fiscal year thanks to underlying results and earnings. According to investment bank Jefferies, the mining company follows a risk-off strategy with a conservative investment policy. Rio is still dependent on raw material prices, but with costs stabilizing and demand increasing in the coming years, the future does not look so bleak, according to the bank. Rio Tinto shares fell 1.4 percent.

Swiss commodities trading company Glencore saw its annual profits fall by 75 percent in 2023 compared to 2022, after coal prices fell. The company omitted stock buybacks and cut dividends sharply. Glencore shares traded down 1.0 percent.

According to Citi Research, Fresenius issued a conservative forecast, which also fell below consensus, while the company's results were better than expected. The price closed 1.2 percent higher.

Wolters Kluwer saw sales and profits rise in 2023, while its dividend was increased further. The data company also announced a new €1 billion share buyback program on Wednesday. The stock closed down 1.0 percent.

Carrefour saw its sales volume increase by more than 10 percent in 2023, while profits rose faster and profits increased significantly, as became clear on Tuesday evening. Carrefour decided to increase dividends by 55 percent to 0.87 euros per share. The department store chain also announced a share buyback program worth 700 million euros. The stock traded up 5.0 percent.

Euro Stoxx 50 4,775.31 (+0.3%)

STOXX Europe 600 491.05 (-0.2%)

DAX 17,118.12 (+0.3%)

CAC 40 7,812.09 (+0.2%)

FTSE 100 7,662.51 (-0.7%)

SMI 11,428.74 (-0.3%)

EEX 846.79 (-0.2%)

Bill 20 3,677.35 (+0.2%)

FTSE MIB 32,018.40 (+1.0%)

IBEX 35 10,107.20 (+0.7%)

US stocks

Wall Street also opened sharply higher on Thursday, according to US futures, after US stock markets closed slightly higher on Wednesday, although minutes from the Federal Reserve's latest meeting showed continuing concerns about inflation risks.

Immediately after the minutes were published, US indices fell, but rebounded towards the end of the trading day.

However, the trading day on Wednesday was mainly dominated by Nvidia's quarterly after-hours numbers.

The minutes showed that US central bank officials were afraid to act too quickly. Most participants pointed to the risks of easing monetary policy too quickly. Only two officials cited the risks associated with maintaining overly restrictive policies for too long. Officials have estimated that the interest rate is likely to be at its highest level in this tightening cycle.

It is not clear when the central bank will consider starting to lower interest rates. Powell said after the meeting that the Fed may cut interest rates more slowly or slow the process if inflation proves more persistent. In contrast, interest rates can be lowered more quickly if the labor market is weak or if there is very low inflation.

Economist Paul Ashworth of Capital Economics concluded that the Fed minutes were “a bit hawkish” but did not rule out a rate cut in May. The economist said it is somewhat disappointing that it is not clear what it means in practice that officials have more confidence that inflation will move sustainably towards 2 percent.

On a macroeconomic level, five releases are scheduled for Thursday in the United States. Weekly support orders, Chicago Fed index and February composite PMI will be released before the market opens, followed by weekly existing home sales and oil inventories later in the day.

Company news

Palo Alto Networks stock fell more than 28.0 percent after the cybersecurity company cut its full-year revenue guidance. Its sector peers such as Zscaler and Crowdstrike respectively scored approximately 14.0 percent and approximately 10 percent lower.

SolarEdge lost more than 11.0 percent after giving a weak forecast for the first quarter.

Shares of digital healthcare company Teladoc Health fell about 25.0 percent after its guidance for the current quarter and 2024 came in below Wall Street expectations. Cathie Woods ARK Investment Management is Teladoc's largest shareholder, according to FactSet.

S&P 500 4,981.80 (+0.1%)

Dow Jones 38,612.24 (+0.1%)

Nasdaq Composite 15,580.87 (-0.3%)

Asia

Asian stock markets rose broadly on Thursday.

Nikkei 225 38,967.61 (+1.8%)

Shanghai Composite 2,973.46 (+0.8%)

Hang Seng 16,584.54 (+0.5%)

Currencies

The euro/dollar was trading at 1.0832. When US stock exchanges closed on Wednesday, the currency pair was still at 1.0820 and when European stock exchanges closed, the value was still at 1.0812.

USD/JPY 150.26

EUR/USD EUR 1.0832

EUR/JPY 162.76

Overall agenda:

00:00 Prices of existing, owner-occupied homes – January (Netherlands)

01:30 Composite PMI – February (Japan)

09:15 Composite PMI – February (France)

09:30 Composite PMI – February (today)

10:00 Composite PMI – February (in EUR)

10:30 Composite PMI – February (UK)

11:00 Inflation – January Final (EUR)

13:00 Central Bank of Turkey – Interest Rate Decision (Phase)

13:30 European Central Bank – Meeting Minutes (EUR)

2:30 PM Help Requests – Weekly (US)

14:30 Chicago Fed Index – January (US)

15:45 Composite PMI – February (US)

4:00 PM Existing Home Sales – January (US)

5:00 PM Oil Inventories – Weekly (US)

Company News:

07:00 AXA – Q4 numbers (France)

1:00 PM Moderna – Q4 numbers (US)

1:00 PM Nikola – Q4 Numbers (US)

Source: ABM Financial News