European stock exchanges open in red

(ABM FN-Dow Jones) The European stock markets are heading for a lower opening on Thursday.

IG anticipates an opening loss of 82 points for the German DAX, a minus of 40 points for the French CAC 40 and a drop of 26 points for the British FTSE 100.

The European stock markets were closed lower on Wednesday in anticipation of new impulses.

The UK FTSE fell sharply, pushed down by a stronger pound sterling. This was prompted by optimism about a Brexit deal between the EU and the British, after EU negotiator Michel Barnier said that a deal is within reach.

Because many companies on the London stock exchange generate a lot of turnover outside the UK, a more expensive pound has a depressing effect on stock prices.

Concerns about stricter measures to repress the coronavirus also contributed to the lower prices, market analyst David Madden of CMC Markets said.

Furthermore, the lack of agreement on a new round of support in America was also a reason for lower share prices in Europe. The optimism about this that was cranked up on Tuesday by Democrat leader Nancy Pelosi dropped somewhat on Wednesday.

Consumer prices in the United Kingdom rose more year-on-year in September than in August. The country’s producer prices in the same month remained equally under pressure year-on-year, falling 0.9 percent.

Company news

Ericsson maintained its outlook for the entire year on Wednesday, after feeling only limited impact from the corona crisis. The share rose 9.6 percent.

Nestlé saw organic sales pick up in the first nine months of 2020 and raised its expectations for the year. The share price fell 0.8 percent in Zurich.

Randstad clearly outperformed in the third quarter and also saw positive volumes in October. KBC Securities increased the target price from EUR 46.00 to EUR 50.00. The share price climbed 6.2 percent.

Worldline will honor its takeover offer for Ingenico now that the 60 percent mark has been passed. The interest has increased to 88.64 percent of the shares of Ingenico. Worldline closed 1.7 percent lower.

Centamin plummeted by 19.2 percent. The London and Toronto-listed miner produced less gold in the third quarter.

AkzoNobel made more profit on less turnover and will buy back 300 million euros worth of its own shares. Degroof Petercam increased the target price from 86.00 to 92.00 euros while maintaining the Houden advice. The share lost 0.8 percent in Amsterdam.

Airbus fell sharply in Paris, with a loss of 4.3 percent. Unibail-Rodamco also lost about 5 percent. In Frankfurt, Delivery Hero and MTU Aero Eng suffered.

Euro STOXX 50 3,180.70 (-1.5%)
STOXX Europe 600       360,81    (-1,3%)
DAX                    12.557,64 (-1,4%)
CAC 40 4,853.95 (-1.5%)
FTSE 100 5,776.50 (-1.9%)
SMI 9,989.75 (-1.5%)
AEX                    557,40    (-1,2%)
BEL 20 3,201.24 (-1.8%)
FTSE MIB               19.085,95 (-2,0%)
IBEX 35                6.811,50  (-1,7%)

AMERICAN SHARES

Wall Street opens with a loss on Thursday, according to American futures.

The American stock markets fell somewhat on Wednesday evening and eventually closed slightly lower.

“The mood on Wall Street was initially slightly optimistic, despite there still being no deal between Democrats and Republicans on a bailout package,” said CMC Markets market analyst David Madden. Madden pointed to statements made by Larry Kudlow, economic adviser to President Donald , that the talks this morning were encouraging.

“Investors are initially heading back into the market, although it seems unlikely that anything will be achieved in the short term around a support package,” said Madden. Later, the American stock markets fell somewhat in the wake of the European stock markets.

“The fact that US policymakers have not yet closed a deal played a role in the negative sentiment,” said CMC Markets’ market researcher.

It remains to be seen whether a support package can be approved before the elections. A deal is expected to come under heavy fire from the Republican majority in the Senate.

“We can hear all about progress in the talks, but some senators have already said they are not going to support any package,” said Seema Shah of Principal Global Investors. She sees no deal in store for the elections.

The risk of a contested election result is currently underestimated by the market, Shah thinks. She advises investors to ignore the election noise. “Look the other way: forget the noise and trade on the fundamentals.”

Meanwhile, the number of coronavirus infections in the US has been on the rise again, for three days and possibly more than two weeks. This may mean more stringent lockdown measures from local authorities. “We seem to be in a very fragile period for the markets, balancing between how the virus is developing and the upcoming elections,” said State Street’s Altaf Kassam. “All the haggling around the negotiation of a support package is also not helping. It is more noise than signal and the markets are tossed back and forth.”

The beige book of the Federal Reserve showed Wednesday evening that the US economy is growing at a modest pace. The Federal Reserve noted that manufacturing, banking and housing in particular grew faster than other sectors. The Beige Book reported positive growth in consumer spending, with a small increase in the tourism sector. Prices for food, cars and household appliances also increased significantly.

A November futures for a barrel of crude oil closed 4 percent on Wednesday, or $ 1.67, lower at $ 40.03 on the New York Mercantile Exchange.

FXTM analyst Lukman Otunuga pointed to data from the US Energy Information Administration that showed a limited decline in oil stocks last week. Although the figures are relevant, according to Otunuga, the attention in the oil market is currently mainly focused on the increase in the number of corona infections worldwide and its impact on energy demand.

The euro / dollar was trading at 1.1870. At the close of the US stock exchanges on Tuesday, there was a stand of 1.1825 on the plates.

Company news

Investors are also reviewing companies’ new quarterly results to see how they weather the economic downturn.

Shares of Netflix fell just under 7 percent after the company reported that subscriber growth slowed sharply in the third quarter, especially in North America. This confirms the growing competition from challengers who are setting up their own streaming services. The corona crisis also brought growth to the fore in the previous quarters, when people were suddenly confined to their homes and looked to Netflix series.

Snap closed nearly 30 percent higher, on reports that the number of users has risen to nearly a quarter of a billion. In addition, advertisers have resumed spending on the Snapchat platform, and increased their budgets in some cases, according to Snap, while investors feared the coronavirus may have squeezed ad revenue.

Texas Instruments’ results were better than expected. Sales increased and profit was higher than expected. The outlook for the fourth quarter was also better than expected. The stock nevertheless lost three percent.

Abbott Laboratories surprised with sales growth of 10 percent, mainly thanks to its Diagnostics division, where sales were up 38 percent. The pharmaceutical company also saw its net profit increase sharply from $ 960 million to $ 1,232 million. Abbott decided to revise the earnings forecast for the whole of 2020 upwards. The share lost approximately two percent.

Verizon had less sales, but managed to increase cash flow. Earnings per share fell from $ 1.25 to $ 1.05, mainly due to a tax expense. Like Abbott, Verizon also decided to raise expectations for 2020. The share lost just under one percent.

Disney criticizes California’s strict guidelines for reopening theme parks, which significantly complicate efforts to reopen Disneyland. The famous amusement park has been closed for seven months. Disney’s share rose by more than one percent.

S&P 500 index                   3.435,56 (-0,2%)
Dow Jones index            28.210,82 (-0,4%)
Nasdaq Composite           11.484,69 (-0,3%)

ASIA

The Asian stock markets were broadly lower on Thursday.

Nikkei 225                     23.467,52 (-0,7%)
Shanghai Composite      3.297,32 (-0,8%)
Hang Seng 24,699.11 (-0.2%)

EVALUATE
The euro / dollar was trading at 1.1842. When the US stock markets closed on Thursday, the currency pair was still moving at 1.1870.

USD/JPY Yen  104,70
EUR/USD Euro  1,1842
EUR/JPY Yen   124,00

MACRO-AGENDA:

06:30 Consumer confidence – October (NL)
06:30 Household consumption – August (NL)
06:30 Investments – August (NL)
08:00 Consumer confidence GfK – November (Ger)
08:45 Business confidence – October (Fra)
14:30 Support Applications – Weekly (US)
4:00 PM Existing Home Sales – September (US)
16:00 Leading indicators – September (US)
16:00 Consumer confidence – October vlpg. (EUR)

COMPANY NEWS:

07:00 Pernod Ricard – First quarter figures (Fra)
08:00 Unilever – Third quarter figures (UK)
13:00 American Airlines – Third Quarter Figures (US)
13:00 AT&T – Third Quarter Figures (US)
13:00 Coca-Cola – Third quarter figures (US)
13:00 Dow Inc – Third Quarter Figures (US)
13:00 Kimberly-Clark – Third Quarter Figures (US)
22:00 Intel – Third quarter figures (US)
00:00 Nucor – Third quarter figures (US)

ABM Financial News; [email protected]; Redactie: +31(0)20 26 28 999.

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