“Brussels Stock Exchange expected to start with minor results: Banking Crisis, Tech Company Earnings, Interest Rate Decisions and more”

(ABM FN) The Brussels stock exchange is expected to start without major results on Tuesday. Futures on the Euro Stoxx 50 index are 0.2 percent in the red about an hour before the gong.

The main European stock exchanges remained closed on Monday due to Labor Day. Wall Street was open, but the S&P 500 eventually stalled. On Friday evening, the American main index gained 0.8 percent.

The start of the trading week was dominated by the banking crisis with the news that the US regulator FDIC seized First Republic Bank, after which virtually all assets were transferred to investment bank JPMorgan. In March, Silicon Valley Bank and Signature Bank, among others, already shipwrecked.

Analyst Naeem Aslam of Zaye Capital Markets wondered aloud why investors seem unimpressed by this new chapter in the banking crisis, given the price trend of the major indices.

Aslam pointed mainly to the resilience of US tech companies with a heavy weight, which managed to submit strong figures for the first quarter, despite the uncertain economic climate. Figures from Apple on Thursday after close are therefore viewed with confidence, according to the analyst.

In addition, commodities companies have gained weight in major indices and positive data in the sector last week boosted sentiment. Aslam expects Shell to exceed expectations with its quarterly report on Thursday.

Analyst Corné van Zeijl of Actiam also suspects that with the acquisition of First Republic Bank by JPMorgan, the last chapter of the banking crisis may have been written.

“This bank was really at the bottom of the list”, given its tier 1 ratio of 9 percent, where banks in the Benelux are between 15 and 17 percent, and “I believe this could be the last domino, simply because this was one of the worst-off banks.”

In addition, Van Zeijl emphasized that savers have always been rescued by the US government, which means that the reflex to withdraw savings in times of unrest will diminish.

This week, investors may get an answer to the question of whether and to what extent central banks have been affected by the banking crisis, with interest rate decisions by the Federal Reserve on Wednesday and the European Central Bank on Thursday, among others.

This morning, the Reserve Bank of Australia unexpectedly raised interest rates by 5 basis points to 3.85 percent, following a markup in April. The Australian dollar rose about one percent against the US dollar and the euro after the announcement.

The Australian stock exchange also gives more than one percent, while the other Asian main stock exchanges are quoted in the green. The stock exchange in Shanghai is closed.

For the Fed, it could well be the last time that interest rates are raised, according to ING, which is counting on an increase of 25 basis points. The ECB is also likely to raise interest rates by 25 basis points, but market experts do not rule out a 50 basis point increase.

It will therefore be interesting to see how inflation in the eurozone develops. At 11:00 am this morning, preliminary inflation in the eurozone in April will be announced.

This morning, according to a provisional estimate by Statistics Netherlands, Dutch inflation appeared to have risen again in April, to 5.2 percent on an annual basis. In March, consumer goods and services were still 4.4 percent more expensive than twelve months previously.

June futures for a barrel of West Texas Intermediate crude closed 1.5 percent lower on Monday at $75.66 in New York. The futures are trading flat this morning.

Company news

The U.S. Food & Drug Administration will rule on Hyloris’ Maxigesic IV on October 17, and Sequana Medical has received a green light from the FDA for its Investigational New Drug filing for its second-generation DSR product for the treatment of congestive heart failure.

Aedifica further expands its healthcare real estate portfolio in Spain through the acquisition of a residential care center to be built in Zamora. This involves approximately 13 million euros.

Berenberg lowered the price target for Umicore from EUR 32.00 to EUR 30.00, but the advice remains Hold.

Wall Street closing positions

The S&P 500 index closed Monday at 4,167.86 points, the Dow Jones index lost 0.1 percent at 34,051.70 points and the Nasdaq closed 0.1 percent lower at 12,212.60 points.

Bron: ABM Financial News

The editors of follow from Beursplein 5 ABM Financial News developments on the stock exchanges, and the Amsterdam stock exchange in particular, closely. The information in this column is not intended as professional investment advice or as a recommendation to make certain investments.