(ABM FN-Dow Jones) The European stock markets will open lower on Friday, after a series of Chinese macro figures and in anticipation of American figures.
On Thursday evening, Federal Reserve Chairman Jerome Powell made it clear that there is no rush to cut interest rates.
IG predicts an opening loss of 65 points for the German DAX and a minus of 38 points for the French CAC 40. The British FTSE looks set to open 23 points lower.
Stock markets in Europe ended higher on Thursday, benefiting from positive corporate news, after sentiment was still subdued on Wednesday.
According to Naeem Aslam of Zaye Capital Markets, investors’ focus continues to be on economic data and comments from Donald Trump, who is currently shaping his government.
On Wednesday, inflation figures from the US showed that the Federal Reserve’s battle is not over yet. “This is a trend we are seeing not only in the US, but also in Europe, the UK and Australia,” Aslam said.
Market analyst Bas van Geffen of Rabobank, meanwhile, saw no major surprises in the minutes of the European Central Bank’s latest interest rate decision, which were published this afternoon.
“All in all, the minutes underline that these 25 basis points were a ‘recalibration’ on a risk distribution that has become slightly more balanced,” said Van Geffen, who further pointed to increased concerns about growth prospects.
According to Rabobank, the question is to what extent the ECB will make major changes to the growth path in December. “Although I don’t think they can take the Trump policy into account until this is more concrete,” said the analyst.
According to Carsten Brzeski of ING, the risk of stagflation has increased and so the question is not whether the ECB will cut interest rates in December, but by how much: 25 or 50 basis points.
It was also announced on Thursday that the eurozone economy grew by 0.4 percent on a quarterly basis in the third quarter. On an annual basis there was a growth of 0.9 percent. The figures were the same as an earlier estimate.
Company news
Siemens saw profits increase more than expected in the fourth quarter of the past financial year and expects to continue to benefit from strong demand for electrical infrastructure from data centers. The dividend also went up. The share gained 4.9 percent in Frankfurt.
Furthermore, Infineon stood out positively in the DAX, with a plus of 4.6 percent, while Merck KGaA had to let go 3.4 percent after lowering the outlook. Car shares did good business on the German stock exchange on Thursday.
Burberry shares shot up by almost 19 percent in London, after the share recently took a dive. Burberry today reported results that Stifel analysts said were “weak, but not worse than feared.” Citi analysts believe that Burberry is taking the right steps and say that the new strategic plan provides some “relief”.
LVMH announced on Thursday that the new CFO will start in February. Earlier this year, the owner of Louis Vuitton came up with a plan to appoint Cécile Cabanis as financial director, succeeding Jean-Jacques Guiony. The management change, which is accompanied by a number of other changes at the top, is part of a larger reorganization within the board. The share gained 1.8 percent in Paris.
Kering also did well in the CAC 40, with a gain of 4.0 percent, while Thales had a difficult day, with a loss of 1.9 percent. ArcelorMittal won 3.9 percent. STMicroelectronics ended up 2.8 percent.
Among the main shares in Amsterdam, ASML led with an increase of 7.0 percent. ASML maintained the outlook for 2030 in the run-up to its investor day, while many analysts had expected that after the warning for 2025, the medium-term prospects would also be cut. The headwind expected for 2025 is therefore likely temporary in nature, Jefferies said.
Unilever rose slightly on a report from the Reuters news agency that the company is investigating the sale of several Dutch brands.
In Brussels, Elia led with a profit of 3.1 percent. Melexis improved by 2.4 percent.
Euro STOXX 50 4,833.53 (+2.0%)
STOXX Europe 600 507,03 (+1,1%)
DAX 19.263,70 (+1,4%)
CAC 40 7.311,80 (+1,3%)
FTSE 100 8.071,19 (+0,5%)
SMI 11.783,65 (+0,7%)
AEX 874.48 (+1.3%)
BEL 20 4.237,33 (+0,6%)
FTSE MIB 34.358,16 (+1,9%)
IBEX 35 11.524,30 (+1,3%)
US STOCKS
Wall Street heads to a red opening on Friday/
The American stock markets ended lower on Thursday. Investment manager Simon Wiersma of ING pointed to the valuation of American shares, which has risen sharply since the elections.
“That makes the chance of a continuation of the rally in the short term less likely. A lot of good news has now been incorporated into the prices,” according to the expert.
According to Federal Reserve Chairman Jerome Powell, the central bank may take the time to cut interest rates further as the US economy continues to perform well.
“The economy is not sending any signals that we should rush to cut rates,” Powell said in a speech in Dallas. “The strength we are currently seeing in the economy gives us the opportunity to approach our decisions with caution.”
The Fed cut its key interest rate by 50 basis points in September and by another 25 basis points last week, bringing the federal funds rate to a range of 4.50 to 4.75 percent.
According to CME FedWatch, a small majority of the market expects another interest rate cut of 25 basis points in December. After that, the pace of reductions should slow down.
“We also expect the Fed to cut the policy rate by 25 basis points next month,” ING’s Wiersma said.
Frank Vranken is less sure about that. “The Fed still has a lot of inflation and jobs data to process in the meantime. And in the meantime, interest rates and the dollar are rising, while commodity prices are under pressure,” noted Bank expert Edmond de Rothschild. “The higher interest rates will not affect large multinationals very much, but smaller companies will do so.”
On Thursday it was announced that producer prices in the US rose by 0.2 percent in October, which was also expected. Core prices also rose by 0.3 percent, as expected.
On an annual basis, producer prices rose by 2.4 percent in October. A month earlier the increase was 1.9 percent. Core prices rose 3.5 percent year-on-year in October. In September this was 3.3 percent.
Powell reiterated in his speech that inflation is likely to decline further, “albeit on a sometimes bumpy path” and Fed policy officials will be “paying close attention” to ensuring inflation falls in line with the central bank’s expectations.
On a macroeconomic level, it also emerged that new applications for unemployment benefits in the US last week amounted to 217,000, while 220,000 new applications were expected.
Bond yields rebounded after Powell’s words. Oil prices rose slightly. Last week, US oil inventories rose, but gasoline, diesel and heating oil inventories declined.
Company news
Disney exceeded its own profit expectations in the fourth quarter of its broken financial year. The entertainment group also issued an outlook for the current financial year on Thursday. Disney is now targeting high single-digit growth in adjusted earnings per share. The cash flow should be around $15 billion. The dividend must grow further and Disney also wants to buy back 3 billion dollars of its own shares.
For the following year, adjusted earnings per share should even increase by double digits, as should the operating cash flow. Double-digit profit growth is also expected for 2027, Disney said. The stock shot up 6.2 percent on Thursday.
Cisco Systems reported a decline in turnover and profit over the past quarter. However, on an adjusted basis, earnings exceeded analyst expectations. The company also increased its outlook. Investors were not impressed and the share fell by 2.1 percent.
JD.com saw sales and profits increase in the third quarter. The American listing of the Chinese e-commerce company nevertheless fell by 6.6 percent because the results were below expectations.
The European Commission has imposed a fine of €798 million on Meta for linking advertisements on Facebook Marketplace to the social network Facebook. Meta shares closed 0.5 percent lower.
Super Micro Computer fell 11.4 percent. The share was also under pressure on Wednesday, after the chip company indicated that it needed extra time to submit its quarterly report. The share has fallen sharply from its all-time high in March 2024 and is down more than 29 percent on a weekly basis.
Applied Materials reported quarterly figures after the close on Wall Street on Thursday and, after a green regular session, lost 3.5 percent in after-hours trading. Although expectations were beaten, the outlook disappointed.
Sonos reported a quarterly loss that was wider than a year earlier, but its adjusted loss per share was smaller than expected. Sales at the wireless speaker manufacturer fell by 16 percent, but exceeded expectations. The share fell by 2.3 percent.
Ibotta lost 12 percent, despite the digital marketing platform reporting quarterly revenue and profit that exceeded Wall Street estimates. Ibotta went public in April.
Nu Holdings, the Brazil-based digital bank, fell nearly 3 percent even though third-quarter profit matched expectations and revenue even exceeded expectations. Warren Buffett and Cathie Wood, among others, are investors in the company.
S&P 500 index 5.949,17 (-0,6%)
Dow Jones index 43.750,86 (-0,5%)
Nasdaq Composite 19.107,65 (-0,6%)
ASIA
The Asian stock markets are mainly higher, after a series of Chinese macro figures. Those figures varied.
Nikkei 225 38.796 (+0,7%)
Shanghai Composite 3.377 (-0,1%)
Hang Seng 19,517 (+0.4%)
VALUE
The euro/dollar was trading at 1.0540 this morning. On Thursday evening the currency pair was trading at 1.0522.
USD/JPY Yen 156.44
EUR/USD Euro 1,0540
EUR/JPY Yen 164.89
MACRO-AGENDA:
00:50 Economic growth – Third quarter (Jap)
04:00 Industrial production – October (Chi)
04:00 Retail Sales – October (Chi)
08:00 Economic growth – Third quarter vlpg (UK)
08:00 Industrial Production – September (UK)
08:00 Trade balance – September (VK)
08:45 Inflation – October final (Fra)
2:30 PM Retail Sales – October (US)
2:30 PM Import Prices – October (US)
15:15 Industrial Production – October (US)
4:00 PM Corporate Stocks – September (US)
COMPANY NEWS:
07:00 Aegon – Third quarter figures (NL)
12:00 Alibaba – Second quarter figures (Chi)
Bron: ABM Financial News
ABM Financial News is a supplier of stock market news, video and data, both for real-time trading platforms and dealing rooms and for online and offline media publications. The information in this article is not intended as professional investment advice or as a recommendation to make certain investments.
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Oh, What a Frightening Friday for European Markets!
Well, folks, here we are again! The European stock markets are prepping to open lower on a fine Friday, not due to hangover from Thursday’s successes, but rather a mix of Chinese macro data resembling soggy noodles and American figures that have us biting our nails in anticipation. Who knew finance could be as suspenseful as a horror movie?
The Powers That Be Speak
Jerome Powell, the Chairman of the Federal Reserve, made it crystal clear that he’s not quite ready to play the “Cut Interest Rates” game, which is disappointing news for those who were hoping for a quick financial trip to Disneyland. “No rush,” he said, probably while sipping on a latte. Guess he didn’t get the memo that we’d all like a bit of economic joy at the moment!
Market Predictions: More Drama Than a Soap Opera!
According to IG, the impoverished German DAX is looking at a predicted loss of 65 points, the French CAC 40 is down 38 points, and our beloved British FTSE is set for a charming drop of 23 points. It feels a bit like they’re all on a sinking ship, and the captain is just stirring the pot.
After the Good News Comes the Bad!
Let’s take a moment to reflect on yesterday. Stock markets in Europe had a lovely Tuesday, fueled by some positive corporate news. But Wednesday struck back harder than a comedy punchline, as inflation data in the US suggested the central bank’s battle against rising prices isn’t finished. It’s like trying to get the last slice of pizza—everyone wants it, but it doesn’t always end well.
The Word from the Analysts: Grab Your Popcorn
Analyst Naeem Aslam says investors are still fixated on economic data and the latest Twitter drama from Donald Trump, who somehow manages to shape the government like a moldy piece of playdough. Meanwhile, Rabobank’s Bas van Geffen, clearly channeling his inner philosopher, tells us that the recent ECB interest rate hike was simply a “recalibration.” Now, I don’t know about you, but the only calibration I care about is the one that makes my coffee maker work!
Company News: The Good, The Bad, and the Truly Bizarre
Siemens is feeling great about themselves—profits up, dividends up, and likely an ego boost as they bask in that 4.9% rise in Frankfurt. On the flip side, Merck KGaA is down 3.4%, which is maliciously ironic because they were probably just trying to mind their own business. Burberry, on the other hand, soared almost 19% in London, bouncing back from the stock equivalent of a mini-crisis. It seems even luxury brands can have their ups and downs!
Across the Pond: Wall Street’s Turn to Frown
The drama continues as American markets prepare for a red opening. Simon Wiersma from ING warns us that the rallies seen lately might just be at their wit’s end, particularly with Powell suggesting that the Fed isn’t rushing to cut rates. Seems like we’re all hanging off the edge of our seats waiting for the next economic cliffhanger!
Asian Markets Show Some Signs of Life
Meanwhile, over in Asia, while the markets were mostly higher, it was a mixed bag. The Nikkei 225 hopped up by 0.7%, while the Shanghai Composite stumbled a bit with a 0.1% drop. Good luck deciphering what’s going on there—Chinese macro figures can feel like a puzzle wrapped in an enigma, and I love a good riddle!
Conclusion: Don’t Forget the Main Event!
So, as we brace ourselves for the opening bell, remember that stock markets are a bit like life—full of surprises, not all are pleasant, and you can be sure that it’s never quite over until the fat lady sings (or until Jerome Powell takes the stage again). Stay tuned, keep your helmets on, and let’s see where this financial rollercoaster will take us today!
Until next time, hope your stocks rise higher than my expectations for a quiet Friday!
(ABM FN-Dow Jones) The European stock markets are poised for a downward opening on Friday, influenced by a slew of macroeconomic data out of China and in anticipation of key figures expected from the United States.
On Thursday evening, Federal Reserve Chairman Jerome Powell conveyed a cautious stance, emphasizing that there is no immediate urgency for the central bank to reduce interest rates, as the economic indicators remain robust.
Market analysts at IG forecast an initial drop of 65 points for the German DAX index, while the French CAC 40 is expected to see a decline of 38 points. The British FTSE 100 is set to open 23 points lower, reflecting overall investor sentiment.
Despite a positive session on Thursday where European stock markets closed higher, buoyed by encouraging corporate earnings reports, the overall mood remained somewhat tempered following a lackluster performance earlier in the week.
According to Naeem Aslam of Zaye Capital Markets, the investing community is closely monitoring economic data and statements from former President Donald Trump as he forms his advisory team, which could have broader implications for market sentiment.
On Wednesday, it was reported that inflation rates in the US indicated that the Federal Reserve’s struggle with price stability is far from over, a sentiment echoed by Aslam, who noted similar trends are emerging across Europe, the UK, and Australia.
Market analyst Bas van Geffen of Rabobank remarked that the minutes from the European Central Bank’s recent meeting presented no unexpected developments, suggesting that the 25 basis points adjustment was a necessary recalibration given the shifting risk landscape.
Looking ahead, Rabobank analysts are questioning the extent to which the ECB may revise its growth forecasts in December, stressing that policy adjustments might not fully reflect the evolving political climate influenced by Trump’s administration until more details emerge.
Carsten Brzeski of ING raised concerns regarding the elevated risk of stagflation, arguing that the real issue for the ECB now is whether to reduce interest rates in December and, if so, by how much—be it 25 or 50 basis points.
On Thursday, it was reported that the eurozone economy experienced a quarterly growth rate of 0.4 percent in the third quarter, and an annual growth rate of 0.9 percent, aligning with earlier estimates.
Siemens announced a profit surge exceeding market expectations in the fourth quarter of its financial year, attributing this to ongoing strong demand for electrical infrastructure from data centers. The company also boosted its dividend, prompting shares to rise by 4.9 percent in Frankfurt.
Infineon also saw positive momentum in the DAX, with shares increasing by 4.6 percent, while Merck KGaA faced a downturn of 3.4 percent following a downward adjustment in its earnings outlook. The automobile sector performed well amid this rally on the German stock exchange.
In London, Burberry shares surged nearly 19 percent as the company reported results that analysts deemed “weak, but not worse than feared,” providing some reassurance following a recent stock decline. Citi analysts commended Burberry’s strategic plans as potentially beneficial for future performance.
LVMH disclosed that its new CFO will assume duties in February, following a plan unveiled earlier this year to appoint Cécile Cabanis in place of Jean-Jacques Guiony. This management overhaul is part of a broader restructuring within the company, contributing to a 1.8 percent gain in share price in Paris.
Meanwhile, Kering also enjoyed a 4.0 percent rise within the CAC 40, while Thales experienced a difficult day, losing 1.9 percent. On the upside, ArcelorMittal gained 3.9 percent and STMicroelectronics closed up by 2.8 percent.
Among Amsterdam’s major stocks, ASML led with an impressive gain of 7.0 percent after maintaining its long-term outlook for 2030 ahead of its investor day; this was unexpected given the firm’s recent warnings regarding 2025.
Unilever’s stock showed slight improvement following reports indicating that the company is exploring potential sales of several brands in the Netherlands, reflecting strategic realignment efforts.
In Brussels, Elia topped the gainers’ list with a 3.1 percent increase, while Melexis shares rose by 2.4 percent, signaling positive investor sentiment in the region.
On the macroeconomic front in the US, producer prices recorded a 0.2 percent increase in October, aligning with expectations. Year-over-year, producer prices rose by 2.4 percent, while core prices experienced a year-on-year increase of 3.5 percent.
Investors are also reacting to statements from Jerome Powell, who indicated that the current economic environment does not warrant expedited rate cuts and that inflation is expected to ease further over time.
As markets prepare for a potential interest rate cut, the broader trend is under scrutiny, particularly in light of fluctuating oil prices and bond yields reacting to Powell’s assurances.
On Thursday, Disney reported exceeding its profit forecast for the fourth quarter, along with ambitious growth projections for the upcoming financial year, spurring a significant 6.2 percent rise in its stock.
Conversely, Cisco Systems reported a decline in revenue and profits, yet exceeded adjusted earnings expectations, leading to a 2.1 percent drop in shares as investor confidence waned.
JD.com, a prominent Chinese e-commerce company, saw its shares fall by 6.6 percent despite announcing rising sales and profits for the third quarter, driven by results that fell short of market expectations.
The European Commission fined Meta €798 million for linking advertisements on Facebook Marketplace to Facebook, contributing to a 0.5 percent decline in the company’s shares.
Super Micro Computer’s shares plummeted by 11.4 percent after the company announced it required additional time to file its quarterly report, marking a significant drop of more than 29 percent over the past week.
In the Asian market, financial activity reflected a mixed outcome, with the Nikkei 225 climbing 0.7 percent, while the Shanghai Composite dipped slightly by 0.1 percent.
The euro was trading at 1.0540 against the dollar, a modest change from 1.0522 the previous evening.
Upcoming macroeconomic reports include third-quarter economic growth figures from Japan and October industrial production and retail sales figures from China, both of which are anticipated to drive market reactions.
How are mixed economic indicators influencing investor sentiment towards monetary policy decisions?
Ed to remain a significant challenge for the Federal Reserve. This has led many to speculate on the trajectory of monetary policy in the coming months, with some analysts predicting potential rate adjustments as the central bank navigates the complex landscape of inflation and economic growth.
as investors gear up for another dynamic day in the markets, the overarching sentiment appears cautious amid the mixed signals from various economic indicators and corporate earnings reports. The anticipation of Powell’s next moves and ongoing developments in global markets will undoubtedly keep participants on their toes, all while maintaining a healthy level of skepticism about the current environment.
So, fellow investors, hold on tight as we continue to navigate this unpredictable financial journey, armed with a touch of humor and a willingness to embrace the chaos!
