European stocks open higher

ABM
Thursday 2 June 2022 07:07

European stocks open on Thursday.

IG expects an opening result of 21 points for the German DAX and a plus of 14 points for the French CAC 40. London is closed today.

European equities closed lower on Wednesday after falling on Wall Street.

European markets fluctuated between small gains and losses throughout the trading day amid persistent concerns about a potential recession, high inflation and rising interest rates. In particular, concerns about inflation, which has been at its highest level for decades, remain a concern. The key question is how this will affect the Federal Reserve’s plans to tighten monetary policy. The risk that the US Federal Reserve will continue to raise interest rates and reduce its balance sheet is that it could affect economic demand to a point of recession.

“After some quiet times over the last few weeks, stocks and bonds have gone back to selling within the last 24 hours as the fear of inflation has shot in,” noted Deutsche Bank market analyst Jim Reid.

At the macroeconomic level, euro area manufacturing declined in May, although the slowdown was less pronounced than expected. The index for purchasing managers in the industry fell from 55.5 to 54.6.

The separate indices showed a mixed picture. In the UK, growth slowed, while German industry grew slightly faster in May. Growth also slowed in France as well as in Italy. In Spain, growth increased slightly, while Dutch industry grew slightly less rapidly than in the previous month.

German retail sales fell sharply in April. On a monthly and annual basis, sales fell by 5.4 percent and 0.4 percent, respectively.

Unemployment in the eurozone was stable at 6.8 percent in April, the same as in March.

Company news

The car manufacturers had the wind behind them on Wednesday. In Paris, the share prices of Stellantis and Renault led with increases of 1.8 percent and 3.9 percent, respectively. In Frankfurt, Volkswagen shares rose by 2.5 per cent. The share price of BMW rose 2.3 percent and Porsche by about 4.0 percent. Mercedes rose about 1.8 percent. Asset manager Fred van Deijck from Bustelberg Effectenkantoor pointed to reports that Japanese carmakers are well able to pass on the higher prices to customers.

In Frankfurt, Zalando caught the eye with a loss of almost 7.0 percent.

In Paris, Totalenergies lost about 2.4 percent, while Capgemini fell 2.5 percent. Carrefour rose 1.3 pct.

Euro STOXX 50 3,759.54 (-0.8%)
STOXX Europe 600 438.72 (-1.0%)
DAX 14,340.47 (-0.3%)
CAC 40 6,418.89 (-0.8%)
FTSE 100 7,532.95 (-1.0%)
SMI 11,498.12 (-1.0%)
AEX 701.19 (-1.6%)
BEL 20 3,854.14 (-1.0%)
FTSE MIB 24,283.56 (-0.9%)
IBEX 35 8,747.20 (-1.2%)

AMERICAN SHARES

Wall Street opens in green on Thursday, according to US futures.

US stocks closed even lower on Wednesday.

Wednesday’s session heralded another trading month, but few investors expect volatility to end. Many investors remain concerned about the pace of Federal Reserve rate hikes and whether it will send the U.S. economy into recession. Eight of the Fed’s last 11 rate hikes have ended in recession, analysts at Deutsche Bank said.

St. Louis Fed Chairman James Bullard said on Wednesday that the Fed will have to implement the market-expected rate hikes, advocating a half-percentage point rate hike at the Federal Reserve’s next policy meeting on 14-15. June.

In the second half of the trading day, the focus was mainly on the Federal Reserve’s Beige Book. All twelve Federal Reserve districts have experienced sustained economic growth in the most recent reporting period. A majority of the districts spoke of weak or modest growth, while four districts spoke of moderate growth. Four districts explicitly indicated that the growth rate had slowed since the previous period, the report found.

Most districts reported moderate or modest employment growth. All districts called the labor market tight. Most districts experienced strong or robust price increases, according to the Beige Book.

Two purchasing manager indices for the industry showed a mixed picture. Figures from the Institute for Supply Management showed that the U.S. manufacturing industry rose unexpectedly in May. The ISM Purchasing Managers Index rose to 56.1 last month from 55.4 in April.

However, the Markit index indicated a slowdown in growth in May. The index fell from 59.2 in April to 57.0 in May.

The number of mortgage applications in the U.S. fell 2.3 percent last week. The market index fell from 315.5 to 308.3.

The number of vacancies in the United States fell from 11.9 in March to 11.4 vacancies in April.

Construction costs in the U.S. rose 0.2 percent in April, while the market expected a 0.5 percent increase.

Futures in July for a barrel of West Texas Intermediate crude closed 0.5 percent higher on the New York Mercantile Exchange on Wednesday at $ 115.26.

At the macroeconomic level, five publications are on the agenda in the United States on Thursday. The ADP job report, weekly assistance requests and payroll costs will be released before the fair, followed by factory orders in April and weekly oil statements.

Company news

Shares in Salesforce rose more than 10.0 percent after stronger-than-expected quarterly sales, allaying concerns about demand for Salesforce’s software. Revenue grew 24 percent in the first quarter, and Salesforce raised its profit forecast for this year.

HP Inc. has also posted positive earnings prospects despite supply chain disruptions and the impact of sanctions against Russia on the laptop and printing business. In recent months, the demand for computers has come primarily from business customers. Companies are still investing in computers for their employees, which are shifting from working from home to hybrid. However, the cheaper laptops are less likely to be sold than during the corona pandemic. The stock rose more than 4.0 percent.

Delta Air Lines has raised its second quarter revenue forecast despite lower capacity, while expecting higher costs. The stock was nearly 5.0 percent lower.

DoorDash raised its expectations for orders in the second quarter as customers order meals more frequently and for larger quantities. Where the gross order value was previously $ 12.1 to $ 12.5 billion, it is now $ 12.5 to $ 12.7 billion, and a little more with the Finnish acquisition of Wolt. The stock fell more than 6.0 percent.

S&P 500 Index 4,101.23 (-0.8%)
Dow Jones Index 32,812.90 (-0.5%)
Nasdaq Composite 11,994.46 (-0.7%)

ASIA

Asian stocks were mostly lower on Thursday.

Nikkei 225 27,428.19 (-0.1%)
Shanghai Composite 3,188.22 (+ 0.1%)
Hang Seng 20,906.45 (-1.6%)

CURRENCIES

Euro / dollar is trading at 1.0655. When US markets closed on Wednesday, the currency pair was still moving at 1.0654, and at the close of European markets, there was still a position of 1.0651 on the plates.

USD / JPYYen 130.05
EUR / USD Euro 1.0655
EUR / JPY Yen 138.57

MACRO AGENDA:
09:00 London Stock Exchange closed (UK)
11:00 Producer prices – April (eur)
14:15 ADP Job Report – May (USA)
14:30 Support Requests – Weekly (US)
14:30 Wage costs – first quarter def. (U.S)
16:00 Factory Orders – April (USA)
17:00 Oil Warehouses – Weekly (USA)
00:00 OPEC Meeting

COMPANY NEWS:
– No agenda items

Learn more about the topics in this post:

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