European stock markets open lower
Friday, March 19, 2021 at 7:06 am
(ABM FN-Dow Jones) European stock markets are heading to a lower open on Friday.
IG expects an opening loss of 97 points for the German DAX Index, minus 52 points for the French CAC 40 and a decrease of 52 points for the British FTSE 100 Index.
European stock markets on Thursday strengthened the Federal Reserve interest rate decision and the US central bank’s commitment to continue its accommodative policy until the US economy recovers from the effects of the Corona crisis.
ActivTrades analyst Pierre Ferrett said: “European assets have followed the global upward trend after the market continued to cheer on the Fed’s interest rate decision.” The market was relying on a more aggressive tone than Fed Chairman Jerome Powell, according to Ferrett.
The Bank of England did not change its monetary policy as expected. The policy rate remained at 0.1 per cent on Thursday and the repurchase program maintains its size of £ 895 billion. The central bank appeared slightly more dovish than expected by maintaining the current pace of quantitative easing purchases and signaling that more evidence is needed that inflation is moving towards the 2 per cent target.
The Turkish central bank surprised Thursday by raising interest rates more than expected to 19 percent to support the lira.
On the macroeconomic front, the eurozone trade surplus was announced on Thursday to rise year-on-year in January, as imports fell faster than exports. The trade surplus amounted to 6.3 billion euros.
Company news
Nokia announced new plans to achieve profitable and sustainable growth. The outlook for 2021 was maintained on Thursday and new growth targets for 2023 were introduced. The stock fell 5.7 percent.
The Asset Management division will have a separate status within Credit Suisse from April 1, underlining the division’s strategic importance. The stock won 2.5 percent.
Nespresso, the coffee division of the Swiss food group Nestlé, is investing CHF 117 million in expanding its production center in Avanche, Switzerland, to meet the growing demand for its coffee cups. Nestle’s share price rose 0.2 percent.
Volkswagen rose sharply at first, but ultimately lost 2.8 percent. BMW won by 0.8 per cent and Daimler with 4.2 per cent. In Paris, Stilantis rose 3.1% and Renault 1.1%. European car stocks have performed well in recent days anyway, after several presentations on the future of the electric car.
Sartorius, a supplier of pharmaceutical and laboratory equipment, rose 9.7 percent after the group revised upward its revenue and margin forecast for the current year, based on strong performance in the first ten weeks of 2021.
Euro Stoxx 50 3867.54 (+ 0.5%)
STOXX Europe 600 426,59 (+ 0,4%)
DAX 14.775,52 (+ 1,2%)
CAC 40 6062.79 (+ 0.1%)
FTSE 100 6779.68 (+ 0.3%)
SMI 10,973.76 (+ 0.5%)
AEX 682,39 (+ 0,3%)
BEL 20 3921.95 (+ 1.0%)
FTSE MIB 24.360,49 (+ 0.3%)
IBEX 35 8,624,60 (+ 0,3%)
US stocks
Wall Street opened slightly higher on Friday, according to US futures.
US stock markets closed lower on Thursday.
The Dow closed above 33,000 points for the first time on Wednesday and appears to remain above it on Thursday, but in the last hour of trading in New York the index fell like other markets.
The Federal Reserve announced on Wednesday that it will continue its accommodative monetary policy until the US economy recovers from the Corona crisis.
Although the economy is recovering faster than expected, it is “not the time” to talk about ending the Fed’s bond-buying program, Chairman Jerome Powell said in an explanation of the interest rate decision.
Powell also cautioned that the market should not focus too much on the central bank’s monetary policy expectations. The new point plot showed that four monetary policymakers are now expecting to raise interest rates in 2020. There was another one in December. Seven officials expect to raise interest rates in 2023.
“It was the best modernization in both worlds, as the Federal Reserve increased [economische] He expects growth, but at the same time doesn’t see a need to raise interest rates anytime soon, ”said David Madden, market analyst at CMC Markets.
It was mainly profit-taking on Thursday after the 10-year US interest rate rose to 1.74%. Madden said technology stocks once again suffered greatly from this.
Meanwhile, in the bond market, investors continue to expect inflation to rise clearly as the economy recovers further, according to Brooks MacDonald analyst Edward Park.
“It’s all about inflation expectations; the fact that we are heading towards inflation that goes beyond the Fed target creates fear in the bond market.”
On the macroeconomic front, it was announced on Thursday that the number of first jobless claims claims in the United States rose last week by 45,000 to a total of 770,000. The number was disappointing because economists expected a drop in the number of new orders to 700,000.
Better news came from Philadelphia, with the Philly Fed index rising from 23.1 in February to 51.8 in March.
The main indexes rose 0.2% in February, after a 0.5% increase in January.
Oil is more than 7 percent cheaper on Thursday.
Company news
Oil funds such as ExxonMobil and Chevron lost about 4 percent after a sharp drop in oil prices
Boeing closed down nearly 3 percent after US regulators removed the aircraft manufacturer’s authority to inspect and certify many of the newly produced 787 Dreamliners.
The general dollar lost 5 percent. Although the deal shop operator performed better than expected in the fourth quarter, the outlook for the current fiscal year was disappointing.
Tesla dropped nearly 7 percent. US safety agencies are investigating an accident in Michigan of a Tesla vehicle. According to local police, a Y driver was carrying the car in autopilot mode when he collided with a police car on a highway. The stock was also affected by the rise in interest rates on Thursday.
This also applies to Apple, which is down by more than 3 percent. The media has also reported that the tech giant may release newer and faster iPad models in April.
Starbucks closed 2.6 percent lower. Shareholders in the coffee chain rejected a proposal to reward the coffee company’s directors.
Six Flags Entertainment fell 1.7 percent after the company announced it would reopen two theme parks in California and one in Mexico.
S&P 500 3.915.46 (-1.5%)
Dow Jones 32.862.30 (-0.5%)
Nasdaq Composite 13.116.17 (-3.0%)
Asia
Asian stock markets fell on Friday.
Nikkei 225 29.773,11 (-1,5%)
Shanghai Composite 3.405.52 (-1.6%)
Hang Seng 28,830.76 (-2.0%)
Evaluation
The EUR / USD was trading at 1.1916 on Friday morning. When the US stock markets closed on Thursday, the currency pair moved at 1.1910.
USD / JPY 108.89
EUR / USD EUR 1,1916
Euro / Japanese Yen 129.73
Macro agenda:
00:30 Inflation – February (Japan)
05:00 Bank of Japan – Interest Rate Decision (Japan)
08:00 Producer Prices – Feb (Germany)
Company news:
– There are no items on the agenda
ABM Financial News; [email protected]; Revised text: +31 (0) 20 26 28999.
