European stock markets should open higher

(ABM FN-Dow Jones) European equity markets will open higher on Tuesday after a long Christmas weekend.

IG expects an opening gain of 93 points for the German DAX, a plus of 42 points for the French CAC 40. The London Stock Exchange will remain closed for another day.

European stock markets closed flat to marginally higher on Friday, with the exception of the French stock market. It was a volatile day, not least as volumes fell towards the holidays.

European stock markets rallied on Friday despite continued worries about central bank policy tightening.

Against that backdrop, Friday was highly anticipated by US PCE inflation data, a key indicator of the Federal Reserve’s monetary policy. Data showed that US inflation cooled further in November. Core inflation was 4.7% year-on-year last month, from 5.0% in October, while regular PCE inflation fell from 6.1% in October to 5.5% last month.

“The PCE has certainly come down a bit, but still far from where the Fed would like inflation to be,” said market analyst Paul Nolte of Kingsview Investment Management.

“The Fed has repeatedly expressed its desire to raise interest rates to a level it deems sufficient to fight inflation, even as it jeopardizes jobs and economic output. In other words, a recession,” analysts said by Interactive Brokers. “It looks like investors have finally digested that message, at least for now,” they added.

At the macroeconomic level, no publications are expected for Friday in Europe.

Company news

The automakers were under pressure on Thursday, but recovered on Friday. Porsche Automobil Holding and Volkswagen increased by 0.2% and 0.7% respectively. Renault won 0.5%.

In Paris, Michelin gained 2.0%, ArcelorMittal 1.7%, while Thales lost 1.9%.

Fresenius Medical was up 2.1% in Frankfurt. Infineon Technologies fell 0.7%. Beiersdorf lost 1.1%.

Chief Financial Officer Francois-Xavier Roger of Swiss food group Nestlé expects difficult market conditions in the coming period. He said so on Friday in an interview with the Bloomberg news agency.

Consumer goods makers like Nestlé, and thus also Unilever, were still struggling in 2022 with steep cost increases. By raising prices to compensate, demand has been put under pressure. Nestle lost 0.2% on Friday. Unilever won 0.2%.

Euro STOXX 50 3,817.01 (-0.2%)
STOXX Europe 600 427.45 (0.0%)
DAX 13,940.93 (+0.2%)
CAC 40 6,504.90 (-0.2%)
FTSE 100 7,473.01 (+0.1%)
SMI 10,804.68 (+0.3%)
AEX 701.06 (+0.1%)
BEL 20 3,725.83 (+0.1%)
FTSE MIB 23,877.55 (+0.3%)
MOLDS 35 8,269.10 (0.0%)

AMERICAN STOCKS

Wall Street opens higher on Tuesday, according to US futures.

US stock markets closed higher on Friday.

The focus of the trading day was the release of PCE inflation, a key indicator of the Federal Reserve’s monetary policy. Fed data showed that US inflation cooled further in November. Core inflation was 4.7% year-on-year last month, from 5.0% in October, while regular PCE inflation fell from 6.1% in October to 5.5% last month.

While investors were likely happy with the inflation slowdown, none of the economic data released this week would justify the Fed abandoning planned rate hikes,” said market analyst Paul Nolte of Kingsview Investment Management. “The PCE has certainly come down a bit, but still nowhere near where the Fed would like inflation to be,” he said.

At the macro level, it was also announced that American incomes increased by 0.4% in November, while consumer spending increased by 0.1%.

New durable goods orders in the US fell 2.1% in November, while the market was expecting a 1.1% decline.

New single-family homes sold in the United States increased 5.8% month-on-month. On an annual basis, there was a decline of 15.3 percent.

US consumer confidence in the economy improved even more in December than preliminary data previously indicated. The index rose from 56.8 to 59.7.

The U.S. House of Representatives approved the $1.65 trillion 2023 budget bill at the last minute on Friday. The Senate gave its approval to the bill on Thursday. The proposal now goes to President Joe Biden’s desk for his signature. He said he will sign the law into law as soon as the bill reaches his desk.

February futures for a barrel of West Texas Intermediate crude oil closed up 2.67%, or $2.07, on Friday at $79.56 on the New York Mercantile Exchange. On a weekly basis, the price of oil closed up 6.85%.

Wall Street won’t open until Tuesday because of Christmas. Macroeconomically, only the Case Shiller Home Price Index is on Tuesday’s agenda.

Company news

Technology was under pressure Thursday, in part after weak data from Micron Technology, which fell 3.5%. The stock was up 1.1% on Friday. Nvidia was down 1.3% and AMD was up 0.7%.

AMC Entertainment announced a stock issue and split on Thursday and was down more than 7%. The share fell more than 11.0% on Friday.

Elon Musk will not sell Tesla shares for the next two years. This is what the CEO said on Twitter Spaces. Since Tesla stock peaked in November 2021, Musk has sold more than $39 billion worth of Tesla stock. Musk previously promised not to sell more Tesla stock, just to do so.

Tesla fell 9 percent to $125 on Thursday. The electric car maker is currently offering steep discounts, suggesting demand is under pressure. The share was nearly 2.0% lower on Friday.

Meta Platforms and users of its Facebook platform have filed a $725 million class action lawsuit. The Meta share rose by around 0.6%.

S&P 500 Index 3,844.82 (+0.6%)
Dow Jones Index 33,203.93 (+0.5%)
Nasdaq Composite 10,497.86 (+0.2%)

ASIA

Asian stock markets were slightly higher on Tuesday.

Nikkei 225 26,465.12 (+0.2%)
Shanghai Composite 3,093.21 (+0.9%)
Hang Seng 19,593.06 (final score 23-12)

VALUE

The euro/dollar was quoted at 1.0653. At the close of US stock markets on Friday, the currency pair was still trading at 1.0614 and at the close of European stock markets, there was still a position of 1.0619.

USD/JPY Yen 132.80
EUR/USD Euros 1.0653
EUR/JPY Yen 141.47

MACRO-AGENDA:
00:30 Retail Sales – November (Japan)
3:00pm Case Shiller Home Prices – October (US)

COMPANY NEWS:
– No items on the agenda

Bron: ABM Financial News

The editors of follow from Beursplein 5 ABM financial news the developments of the stock exchanges, and in particular of the Amsterdam stock exchange, up close. The information in this column is not intended to be professional investment advice or a recommendation for making any particular investment.