(ABM FN-Dow Jones) The European stock markets are heading for a considerably lower opening on Monday, now that there is still no new corona support package in the US and the number of infections continues to rise.
IG anticipates an opening loss of 159 points for the German DAX and a minus of 34 points for the French CAC 40. The British FTSE 100 probably opens 26 points lower.
According to market analyst David Madden of CMC Markets, the mood in Europe was positive on Friday after the announcement that Gilead’s remdesivir has been approved in the United States as a corona treatment.
This ended a mediocre week for the European equity markets with some sparkle.
“Much of the [afgelopen] week, investors were concerned about the corona crisis and new restrictions [om het virus in te dammen] plus a lack of new stimulus in the US, ”said Madden.
On a macroeconomic front, it was announced on Friday that the composite purchasing managers index for the eurozone fell from 50.4 in September to 49.4 last month, the lowest level in four months. The decrease was mainly caused by a contraction in the services sector.
According to Markit’s Chris Williamson, the eurozone is at risk of a new strong contraction now that there is a second corona wave.
“The likelihood of another recession puts even greater pressure on the ECB to deploy more stimulus measures and on national governments to mitigate the impact of lockdown measures,” Williamson said.
“The further decline in the Eurozone composite PMI in October confirms that the second wave of corona infections and the tightened measures are placing a heavy burden on the economy,” said Ima Sammani, currency analyst at Monex Europe.
The bright spot in today’s data was Germany, according to Sammani.
“This is in line with the virus picture. Daily infections in France are growing fast and the French government has tightened up the measures considerably. The second virus wave in Germany, on the other hand, appeared considerably later.”
Company news
ABN AMRO received a buy recommendation from Goldman Sachs and rose 2.8 percent. Other financials also went higher. ING won 2.2 percent and Deutsche Bank rose 2.5 percent. Société Générale closed the day 1.9 percent in the plus. Barclays even gained 7.0 percent after strong quarterly figures.
Airbus stock rose 5.6 percent in value on Friday, after the airline company allegedly asked suppliers to prepare for a possible increase in production of its A320 aircraft, with the company citing an increase of 18 percent for the second half of 2021. .
Renault posted less sales in the third quarter of 2020. The stock closed 0.5 percent in the min. Rival Daimler published quarterly figures that were equal to previously released preliminary results and increased the outlook for 2020. The stock closed 1.0 percent higher.
The group of activist shareholders in Unibail-Rodamco-Westfield recently increased their stakes in the ailing real estate fund, but they don’t want to take a controlling stake. The stock ended 0.4 percent higher on Friday.
L’Oreal recovered in the third quarter. This emerged from a quarterly update from the cosmetics giant on Thursday. The share rose 1.2 percent.
Michelin has raised expectations for 2020. This became apparent on Thursday evening from a quarterly update from the French tire manufacturer. The stock closed 3.7 percent higher.
Euro STOXX 50 3,198.86 (+ 0.9%)
STOXX Europe 600 362,50 (+0,6%)
DAX 12.645,75 (+0,8%)
CAC 40 4,909.64 (+ 1.2%)
FTSE 100 5,860.28 (+ 1.3%)
SMI 10,023.90 (+ 0.3%)
AEX 554,34 (+0,03%)
BEL 20 3,246.45 (+ 1.4%)
FTSE MIB 19.285,41 (+1,1%)
IBEX 35 6.893,40 (+1,4%)
AMERICAN SHARES
The American futures indicate a red opening for Wall Street on Monday.
Wall Street is closed on Friday. The three indexes returned on a weekly basis.
According to market analyst David Madden of CMC Markets, there was little enthusiasm among investors in New York on Friday.
“There is a lot of talk about a new stimulus package but at the same time there are still plenty of disagreements,” said Madden, pointing to statements by President Trump’s economic adviser Larry Kudlow. Madden says there is little chance that another deal will be made before the election.
Democratic House Speaker Nancy Pelosi says President Trump needs to convince reluctant Republicans to make a deal before the election. Treasury Secretary Steven Mnuchin said on Friday that while significant progress has been made in the negotiations, Pelosi needs to make more compromises.
The elections are less than two weeks away, so all news around the US polls is being closely monitored.
The second and final debate between President Trump and his challenger, Democrat Joe Biden, yielded no new insights. According to Principal Global Investors strategist Seema Shah, the market continues to anticipate a win for Biden.
As the elections approach, investors will want to take less risk, Saxo Bank strategist Eleanor Creagh thinks.
Macro numbers and business results are also receiving due attention as they can paint a better picture of the US economy. The recovery is in danger of being jeopardized by a revival in the number of corona infections. On Thursday a record of new cases was registered in the US.
On a macroeconomic front, it was announced on Friday that the composite purchasing managers index for the industry and services sector rose to 55.5 in October. That is the highest level in 20 months.
According to economist Chris Williamson, corporate America is increasingly positive about the outlook because of the hope of new stimulus.
The oil price fell on Friday. A barrel of West Texas Intermediate became 1.9 percent cheaper at $ 39.85 at settlement. On a weekly basis, the oil price fell about 3 percent.
“On the demand side, there is little support given the extremely high number of new Covid-19 cases, nearly 500,000 worldwide on Thursday,” said Commerzbank’s Eugen Weinberg. “There is also pressure on the supply side due to rising oil production in Libya,” the analyst added. Libyan production is now around 560,000 barrels per day.
On Friday it was announced that the force majeure at the largest oil terminal in Libya has been lifted, so that the output can reach 1 million barrels per day within four weeks. Libya is exempt from OPEC + production agreements.
Company news
American Express performed slightly less well in the third quarter than analysts had anticipated and saw its annual profit decline by almost 40 percent. The stock fell 3.7 percent on Friday.
Mattel posted a significantly higher profit and turnover in the third quarter. The manufacturer of Barbie, among others, expects further growth in turnover in the current quarter and expects to be profitable for the entire financial year. The share rose 9.6 percent.
Intel, on the other hand, was not able to beat the analyst expectations. The American tech giant did, however, exceed its own outlook. During the period under review, net income fell from $ 6.0 billion to $ 4.3 billion, or $ 1.02 per share. On an adjusted basis, earnings per share were $ 1.11 from $ 1.42 a year earlier. The stock closed no less than 10.6 percent lower.
Gilead Sciences’ remdesivir has received formal approval from the US Food & Drug Administration as a treatment for Covid-19 in hospitalized patients. This was announced on Thursday evening. Remdesivir, now called Veklury, had already had FDA approval for emergency hospital use since May. The share rose marginally.
S&P 500 3.465,39 (+0,3%)
Dow Jones index 28.335,57 (-0,1%)
Nasdaq Composite 11.548,28 (+0,4%)
ASIA
The Asian stock markets were in red on Monday.
Nikkei 225 23.503,21 (-0,1%)
Shanghai Composite 3.252,59 (-0,8%)
Hang Seng 24,918.78 (closing position October 23)
EVALUATE
The euro / dollar was trading at 1.1831 Monday morning. At the close of the US stock exchanges on Friday, the currency was trading at 1.1859.
USD/JPY Yen 104,91
EUR/USD Euro 1,1831
EUR/JPY Yen 124,12
MACRO-AGENDA:
10:00 Ifo business confidence – October (Ger)
13:30 Chicago activiteitsindex – September (VS)
14:00 New Home Sales – September (US)
COMPANY NEWS:
22:00 NXP Semiconductors – Figures third quarter (NL)
ABM Financial News; [email protected]; Redactie: +31(0)20 26 28 999.
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