Red Opening Against European Stocks

(ABM FN-Dow Jones) European stocks are set to open lower on Wednesday, likely awaiting what US Federal Reserve Chairman Jerome Powell has to say before Congress today.

IG expects an opening loss of 154 points for the German DAX, minus 68 points for the French CAC 40 and a drop of 68 points for the British FTSE 100.

European shares closed higher on Tuesday but kept gains modest as Wall Street cheerfully started the week after Monday.

“The rebound in risky assets is gaining momentum, with US markets leading the way in afternoon trading,” said Chris Beauchamp of IG.

Beauchamp said there will be no more major central banks raising interest rates this week, and that should help stabilize sentiment. “Anyway, the markets last week hit a low point and promised at least a jump in the short term.”

Deutsche Bank economist Jim Reed said the market was helped by comments by Chairman Christine Lagarde that the European Central Bank will raise interest rates next month. And plans to prevent government bond yields from different eurozone countries from diverging too much are becoming somewhat clearer.

According to investment manager Simon Wiersma of ING, it will likely do slightly better for investors in the second half of the year. “We believe there is some recovery in the pipeline for both stocks and most bond classes,” said one market follower.

The US Treasury Secretary said, on Monday, that the United States is in talks with Canada and other allies on setting a ceiling for Russian oil prices to further limit Moscow’s revenues.

company news

JPMorgan said aviation is recovering beyond expectations, which could be good for European airline stocks and aircraft manufacturers. The industry association IATA expects growth of 98 percent this year, compared to 51 percent in October. It will be a challenge to meet the demand. Air France-KLM shares fell 4.5 percent and Airbus nearly 1 percent.

In Belgium, telecom stock prices came under pressure after the spectrum auction. Orange Belgium limits the price loss to less than one percent, but Telenet’s share price is down more than 7.5 percent, just like Proximus.

Online supermarket Ocado has raised £578 million by issuing nearly 73 million shares. The shares were offered at a discount of more than 9 percent. Shares fell 2.5 percent in London on Tuesday.

Euro Stoxx 50 3,494.00 (+0.70%)
STOXX Europe 600 XXX, XX (+ X, X%)
DAX 13292.40 (+0.20%)
CAC 40 7,152.05 (+0.42%)
FTSE 100 X.XXX, XX (+ X, X%)
SMI 10490.40 (+0.04%)
Ax 648.03 (+ 1.03%)
Bill 20 3736.32 (+0.37%)
FTSE MIB 22,089.41 (+0.39%)
IBEX 35 8,235.60 (-0.61%)

US property rights

Wall Street opened lower on Wednesday, according to US futures.

US stocks closed higher on Tuesday after bargain hunters hit the trading floor after a long weekend as Wall Street was closed for a holiday on Monday.

According to market analyst Naeem Aslam of AvaTrade, the positive mood was mainly due to bargain hunters. He warned that this may not be more than the so-called
Dead Cat Bounce: One bounce followed by another fall.

There was no trading in New York on Monday. Last week, Wall Street indexes fell on concerns about interest rates and a recession. US President Joe Biden said Monday that a recession is “not inevitable.” According to economists at Goldman Sachs, the probability of a US recession next year has increased from 15 to 30%.

James Bullard of the Federal Reserve expects the US economy to grow further in the coming months.

Bullard said yesterday that the US economy will not contract and will grow faster than market expectations, and the fact remains that the US economy is only one estimate away from recession, Aslam said. It also remains unclear when inflation will peak in the US, “which is of even greater concern to investors and traders.”

In the afternoon, US existing home sales turned out to have fallen as expected in May, while the Chicago Fed’s activity index fell to zero in May, indicating activity stabilization with no growth or contraction.

Ten-year Treasury yields rose sharply from 3.238 percent on Friday to 3.298 percent. Bitcoin rose 2 percent to $20,924, after hitting below $18,000 a few days ago.

company news

Profits were enjoyed across a broad front. Energy stocks led the way, with ExxonMobil climbing 6 percent.

Demand for growth stocks, such as chip maker Nvidia and software company Palantir Technologies, was also up 4 and 6 percent. Tesla rose 9 percent and Roku 8 percent.

Homebuilder Lennar managed to beat expectations in the second quarter, but is seeing a slowdown in demand in the current third quarter. Stewart Miller, CEO of Lennar, said the rapid rise in interest rates and inflation is causing many homebuyers to pause and think twice before buying a new home. The stock gained 1.6 percent.

JetBlue has increased its offer for Peer Spirit Airlines from $31.50 to $33.50 per share. JetBlue lost its initial price gain, losing 1.4 percent and Spirit taking 8 percent.

Food producer Mondelez International has acquired Clif Bar for at least $2.9 billion. Mondelez won by 1.8 percent.

Kellogg is liquidating part of the company. The US food manufacturer announced this on Tuesday. It comes to the division of grain and vegetable products in Canada, the United States, and the Caribbean. These activities collectively represent 20 percent of the group’s sales. Kellogg wants to grow faster and therefore focus more and more on snacks. The stock rose 2 percent.

S&P 500 Index 3764.79 (+2.45%)
Dow Jones 30,530.25 (+2.15%)
Nasdaq Composite 11.069.30 (+2.51%)

Asia

Asian shares were broadly lower on Wednesday.

Nikkei 225 26,229.26 (-0.1%)
Shanghai Composite 3,295.95 (-0.3%)
Hang Seng 21291.75 (-1.2%)

Currencies

The EUR/USD was trading at 1.0491. When the US markets were closed on Tuesday, the currency pair was still moving at 1.0532 and when the European markets were closed there was still 1.0558 on the plates.

US Dollar / Japanese Yen 136.21
EUR / USD EUR 1.0491
EUR / JPY 142.89

Macro schedule:
00:00 Owner Occupied Existing Home Prices – May (NL)
06:30 Consumer Confidence – June (Netherlands)
06:30 Household Consumption – April (NL)
06:30 Investments – April (NL)
10:30 Consumer and Producer Prices – May (UK)
13:00 Mortgage Applications – Weekly (US)
15:30 Federal Reserve Chairman Powell’s testimony on monetary policy in the US Senate
16:00 Consumer Confidence – vlpg for June (Europe)

Company news:
There are no items on the agenda

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.