(ABM FN-Dow Jones) The European stock markets are heading for a higher opening on Friday, after Wall Street showed a recovery during the trading day on Thursday.
IG anticipates an opening win of 52 points for the German DAX and a plus of 42 points for the French CAC 40. The British FTSE 100 probably opens 35 points higher.
Stock markets in Europe ended much lower on Thursday.
Renewed concerns about the strong resurgence of the coronavirus and tougher measures in Europe dominated the mood, market analyst David Madden of CMC Markets saw.
Madden pointed out that the focus recently has been on a possible new round of stimulus in the United States, as the virus flared up again in full force.
“We are now in a scenario where the pandemic comes back to the forefront while the likelihood of new US stimulus ahead of the election is very slim,” said Madden, prompting the stock market selloff.
Just as important are the Brexit negotiations that took place on Thursday and the deadline set by London, which also officially ends on Thursday. Brussels said after the summit that there is not enough progress for a deal and called on London on Thursday to continue to talk in the coming weeks.
According to Madden of CMC, the Brexit uncertainty continues and it is again the same situation that we saw in negotiations earlier. “Both sides say they want an agreement, but no major compromises have been made so far.”
Real estate fund Unibail-Rodamco-Westfield was the positive outlier on Thursday as a consortium of European investors in the real estate fund announced that it strongly opposed the proposed 3.5 billion euro issue as part of the real estate fund’s RESET plan. In a response, Unibail indicated that it would remain in talks with these investors, but that they also adhere to the strategic plan. The share rose 14.1 percent.
After ASML’s quarterly results on Wednesday, analysts revised their estimates, which in most cases led to a higher target price for the stock. Berenberg even increased the price target to 405 euros. ASML nevertheless fell 3.5 percent.
The same as with ASML was also the case with Just Eat Takeaway. After Wednesday’s gains, the stock rose another 1.8 percent on Thursday.
Ryanair plans to fly at a capacity of 40 percent compared to last year this winter, due to increasing restrictions in Europe to prevent further spread of the corona virus. The stock lost 4.3 percent in value. Sector peers such as Air France-KLM, easyJet and Lufthansa lost about 2 to 3 percent.
Roche achieved limited revenue growth in the first nine months of this year, with the corona crisis weighing on its results. The Swiss pharmaceutical company did maintain the outlook for the whole of this year. In addition, there is room to further increase the dividend. Roche still closed 3.5 percent lower.
Euro STOXX 50 3,192.69 (-2.5%)
STOXX Europe 600 362,91 (-2,1%)
DAX 12.703,75 (-2,5%)
CAC 40 4,837.42 (-2.1%)
FTSE 100 5,832.52 (-1.7%)
SMI 10,067.96 (-2.2%)
AEX 560,47 (-2,0%)
BEL 20 3,242.06 (-2.2%)
FTSE MIB 19.065,44 (-2,8%)
IBEX 35 6.816,80 (-1,4%)
US futures indicate a lower opening for Wall Street on Friday.
Wall Street ended lower on Thursday. Hopes that a new bailout package will be agreed in the United States before the elections is waning day by day, while rising global corona infections and associated measures to contain the virus are casting a shadow over the global economic outlook.
While the tug-of-war over new stimulus in the US was seen by the markets as a positive sign in recent weeks because negotiations were in progress, the mood has now turned, according to market strategist Jim McCormick of Natwest Markets. “And there are setbacks in the development of corona vaccines and there is a general negative sentiment because of the worsening Covid situation in Europe.”
US President Donald Trump told Fox News on Thursday that he has ordered Treasury Secretary Steven Mnuchin to negotiate a bailout package in excess of $ 1.8 trillion. The Democrats previously targeted a $ 2.2 trillion package. Many Republicans want a lower stimulus package.
On a macroeconomic front, there were few bright spots for investors on Thursday. 898,000 new claims for unemployment benefits were made in the US last week. That was a lot more than the 830,000 new applications that economists were counting on.
This indicates that the US labor market recovery is losing steam, according to JPMorgan Asset Management market strategist Hugh Gimber. “The market is recovering much slower than earlier this year, so there is still a long way to go.”
According to market analyst Naeem Aslam of AvaTrade, the labor data is another warning to US policymakers to come up with a stimulus package quickly before the economic situation in the US deteriorates further.
In general, market sentiment is a lot more cautious in the run-up to elections in less than three weeks. According to McCormick of Natwest Markets, investors are increasingly counting on a blue sweep for the Democrats, but there is a reluctance to fully value this given the experience of 2016, when Trump unexpectedly won.
Other macro data from the US that appeared on Thursday showed a decline in the New York Fed index between September and October, while the same index for the Philadelphia region unexpectedly showed a strong improvement.
The oil price fell slightly on Thursday. A barrel of West Texas Intermediate became 0.2 percent cheaper at $ 40.96 at settlement.
The losses towards settlement were largely made up after a fall in American oil stocks and firm language from OPEC + that all participating countries must comply with the production agreements.
Morgan Stanley performed much better than expected in the third quarter. Both in terms of revenue and net profit, the investment bank performed better than analysts had foreseen. Revenues rose to $ 11.7 billion year-over-year from an expected $ 10.7 billion. Net income was $ 2.7 billion, or $ 1.66 per share, while consensus was $ 1.28 per share. The stock rose 1.3 percent on Thursday.
United Airlines posted sharply lower sales in the past quarter and plunged into the red due to the impact of the corona crisis. “While the negative impact of the coronavirus will continue in the near term, we are now focusing on positioning the airline for a strong recovery,” said CEO Scott Kirby. The stock lost 3.8 percent.
Alcoa managed to reduce its net loss in the past quarter despite slightly lower sales. CEO Roy Harvey spoke of solid results in all business segments. According to the CEO, the improvement in the result was due to better prices in combination with an increase in sales of aluminum products. The stock lost 5.4 percent.
Walgreens Boots Alliance delivered better than expected earnings and sales figures in the fourth quarter of its broken fiscal year. The profit per $ 1.02 was better than the $ 0.96 the market was expecting. The share rose 4.8 percent.
Tiffany & Co saw its annual operating profit increase by 25 percent in August and September, while sales declined slightly. A clear improvement since May of this year, according to the jewelry chain. The recovery was particularly strong in China. The share rose 2.2 percent.
Twitter and Facebook were under pressure on Thursday after strong criticism from US President Trump. He called social media a stronghold of the Democrats. Shares lost up to 2.0 percent. Twitter rose slightly.
Shares of Vertex Pharmaceuticals were worth 20.7 percent less. The biotech company announced late on Wednesday that it would stop developing a potential treatment that fights a disorder that causes lung or liver disease.
S&P 500 3.483,34 (-0,2%)
Dow Jones index 28.494,20 (-0,1%)
Nasdaq Composite 11.713,87 (-0,5%)
The Asian stock markets were divided on Friday.
Nikkei 225 23.413,43 (-0,4%)
Shanghai Composite 3.322,85 (-0,3%)
Hang Seng 24,347.65 (+ 0.8%)
The euro / dollar was trading at 1.1704 on Friday morning. At the close of the US stock exchanges on Thursday, the currency was trading at 1.1705.
USD/JPY Yen 105,21
EUR/USD Euro 1,1704
EUR/JPY Yen 123,14
11:00 Inflation – September final (EUR)
11:00 Trade balance – August (eur)
2:30 PM Retail sales – September (US)
15:15 Industrial production – September (US)
16:00 Consumer confidence Michigan – October vlpg. (USA)
13:00 Honeywell – Third quarter figures (US)
ABM Financial News; [email protected]; Redactie: +31(0)20 26 28 999.
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