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Lower start of Bel20 trading week expected


Image: Euronext

(ABM FN) The Brussels stock exchange is expected to start the new trading week in the red. Futures on the Euro Stoxx 50 index pointed to a loss of half a percent about an hour before the stock market bell.

The Bel20 already lost 1.7 percent on 4,148.79 points on Friday. The index closed the previous week at 4,245.85 points.

On Wall Street, it was even all hands on deck on Friday evening with a loss for the tech-packed Nasdaq index of 2.7 percent. The more traditionally composed Dow Jones index limited the loss to 1.3 percent. As has often been the case in recent weeks, US indices have lost ground over the course of the trading day.

“The bears are on the ball,” said Jim Reid, strategist at Deutsche Bank. “The S&P 500 is losing its third week in a row, the first since September 2020.” Disappointing corporate figures, but also the expectation that interest rate hikes are imminent, weighed on sentiment in recent weeks. Investors are now mainly focused on Wednesday’s meeting of the Federal Reserve.

This morning, US index futures are trading in the green and declines in Asian stock markets are contained. The stock in Seoul, with relatively many technology stocks, especially semiconductors, loses 1.7 percent, while Hong Kong loses 1 percent. Tokyo and Shanghai are on balance holding back, after having already given up ground on Friday.

Oil prices have seen an inverted price trend relative to the stock markets in recent weeks. US oil futures in Asia rose 0.7 percent this morning to $85.63 a barrel. Last week, a barrel of West Texas Intermediate became almost 2 percent more expensive on a weekly basis. Analysts are mainly pointing to tight stocks as an explanation for black gold’s upward movement.

Fed rate decision and corporate data

Wednesday is all about the US central bank. The Federal Reserve is coming with a new interest rate decision and the accompanying comments are especially important for investors. With the annual inflation rate in December at no less than 7.0 percent, more and more policymakers want to pull the handbrake hard.

“We expect the Fed to further confirm market expectations of a 25 basis point rate hike in March,” economists at the Japanese bank Nomura said in a preview.

The market is already pricing in four rate hikes for this year, and the entire buyback program should also be completed by March. The Fed may already have a look at its cards on Wednesday about the future reduction of that gigantic balance sheet with purchased debt securities.

The US earnings season is also really picking up steam this week. Today IBM and Halliburton come through numbers, and later this week Microsoft, Intel, Tesla and Apple are on the agenda, among others.

On a macroeconomic front, today investors are eyeing the release of the composite Purchasing Managers’ Indices in January, which will be released in the course of the day in the Eurozone and the Americas. It was announced this morning that the Japanese services sector contracted sharply in January, while the manufacturing sector picked up slightly.

Company news

Ping An completely reduced its stake in Ageas on 19 January. Previously, Ping An still had an interest of more than three percent in Ageas.

UCB received Japanese market approval for its drug bimekizumab for the treatment of the skin condition psoriasis. Deutsche Bank lowered the advice for UCB from Buy to Hold and the price target from 115.00 to 95.00 euros before the market opens.

Tinc has expanded its portfolio with solar parks on commercial roofs in Belgium and is investing in the Belgian portfolio company Datacenter United. In total, this involves an investment of 10 million euros.

Wall Street closing positions

The S&P 500 fell 1.9 percent Friday at 4,397.94 points, the Dow Jones index lost 1.3 percent to 34,265.37 points and the Nasdaq ended 2.7 percent lower at 13,768.92 points.

Bron: ABM Financial News


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

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