FRANKFURT (Dow Jones) — Europe’s stock exchanges started trading a little easier on Thursday. There are no uniform tendencies on the market, most stocks are listed with slight plus or minus signs. Because after the US interest rate decision, people are now waiting for the European Central Bank (ECB) in the early afternoon. The DAX comes back slightly from the all-time high and is down 0.1 percent to 16,287 points, the Euro-Stoxx-50 falls by 0.2 percent to 4,369 points.
Nevertheless, the general mood is positive. “Markets are taking the Fed’s interest rate projections surprisingly well,” said one market participant. As hoped, the Fed announced a small interest rate pause, but supplemented this with aggressive rhetoric. “The hawkish surprise, however, was in the updated economic forecasts,” emphasizes Christian Scherrmann, US economist from the asset manager DWS. On balance, there are likely to be 2 more interest rate hikes this year; the market had only expected one. However, the decisions on this should be made based on data, so that economic data will become even more important in the future.
Waiting for the ECB – further interest rate path unclear
The focus is now on the ECB meeting. Here one applies rate hike priced in as firm by 25 basis points, another move in July as well. The ECB is also keeping an eye on the new forecasts for inflation and growth. However, the further interest rate path is unclear, according to the analysts at Helaba: There were different statements within the ECB. On the market, the money market futures are still pricing in a good 2 interest rate hikes totaling 50 basis points. The interest rate high is expected for September.
China goes the other way
In the meantime, things are moving in the opposite direction in China: the central bank there is lowering more and more interest rates from the second tier. Market participants assume that key interest rates will follow soon. The medium-term credit facility (MLF) was recently reduced from 2.75 percent to 2.65 percent. Another rate had already been lowered earlier in the week. The market assumes that the central bank will also lower the Loan Prime Rate (LPR) next Tuesday. This should support the real estate market in particular. In view of the renewed weak Chinese economic data from the night, some economists are even assuming further cash injections.
In addition to the central banks, there is still a range of economic data on the agenda for the afternoon. So the very important US retail sales and the Philly Fed index. Then there are the initial applications for unemployment benefits. With a plus of 1.0 percent in the sector index, retailers in Europe are already the strongest sector.
Interest-dependent sectors in focus
The market focus is primarily on interest-sensitive sectors. One reason for the Nasdaq’s resilience to the Fed’s hawkish tones was solid semiconductor stocks the day before. The presentation of a new chip from AMD for artificial intelligence supported this. Interest in it was then immediately expressed by the Amazon division AWS. AMD was up 2.2 percent in New York, the Philadelphia Semiconductor Index gained 1.5 percent and the Nasdaq-100 gained 0.7 percent.
Europe’s interest-sensitive stocks such as technology and banks are still up to 1.0 percent in the red. Stocks in the real estate sector such as Vonovia (-1.4%) are also sliding down. There is still restraint here, as we have to wait for the interest rate statements from the ECB.
Software sector with takeovers in mind
In the software sector, the wave of takeovers and investments continued on Thursday. The sale of Software AG in Germany and the expansion of cloud applications gave the go-ahead, according to the trade. SoftwareOne in Switzerland has now received an unsolicited offer from Bain Capital for CHF 18.50 per share. According to dealers, a bidding war is looming here. Because major shareholders with 29 percent share capital are in favor, the others against. The board of directors has already reacted and sees the company as “significantly undervalued” by the offer. The share jumps 26.7 percent to CHF 18.15.
In the case of Atoss Software in Germany, General Atlantic is joining as another anchor shareholder. The US financial investor will receive around 20 percent with options for almost 5 percent more. The shares, however, fall by 6.1 percent, as traders had hoped for a complete takeover here as well.
Analyst ratings also cause price fluctuations: PostNL rose by 4.9 percent after being upgraded to “buy” by ING.
Hugo Boss is down 0.5 percent despite an optimistic medium-term outlook. The planned figures for 2025 are around 10 percent higher than the estimates for both sales and EBIT. However, the figures for this year are only in line with expectations and have been priced in.
The Swedish fashion retailer H&M, on the other hand, is up 6.6 percent. Although the sales figures here fell slightly short of expectations, this is compensated for by a positive view of June.
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Stock index last +/-% absolute +/-% YTD
Euro Stoxx 50 4,369.22 -0.2% -6.76 +15.2%
Stoxx 50 3,997.75 -0.1% -4.53 +9.5%
DAX 16,287.05 -0.1% -23.74 +17.0%
MDAX 27,533.24 -0.1% -23.95 +9.6%
TecDAX 3,251.88 -0.0% -0.11 +11.3%
SDAX 13,697.37 -0.2% -25.76 +14.9%
FTSE 7,591.66 -0.1% -11.08 +2.0%
CAC 7,311.38 -0.2% -17.15 +12.9%
Fixed income market last absolute +/- YTD
German ten-year return 2.48 +0.03 -0.09
US 10-year yield 3.83 +0.04 -0.05
FOREX last +/- % Thu, 8:20 Wed, 17:29 % YTD
EUR/USD 1.0813 -0.2% 1.0817 1.0850 +1.0%
EUR/JPY 152.89 +0.8% 152.76 151.18 +8.9%
EUR/CHF 0.9778 +0.2% 0.9775 0.9739 -1.2%
EUR/GBP 0.8551 -0.0% 0.8552 0.8547 -3.4%
USD/JPY 141.39 +0.9% 141.21 139.34 +7.8%
GBP/USD 1.2645 -0.1% 1.2650 1.2694 +4.5%
USD/CNH (Offshore) 7.1637 -0.1% 7.1649 7.1525 +3.4%
Bitcoin
BTC/USD 24,918.64 -0.8% 24,975.00 25,970.06 +50.1%
CRUDE OIL last VT settlem. +/- % +/- USD % YTD
WTI/Nymex 68.45 68.27 +0.3% +0.18 -14.3%
Brent/ICE 73.27 73.20 +0.1% +0.07 -12.5%
GAS VT Settlem. +/- EUR
Dutch TTF 39.30 38.31 +2.6% +0.99 -52.6%
METALS last day before +/- % +/- USD % YTD
Gold (Spot) 1,933.72 1,943.45 -0.5% -9.73 +6.0%
Silver (Spot) 23.29 23.98 -2.9% -0.69 -2.8%
Platinum (Spot) 970.00 980.00 -1.0% -10.00 -9.2%
Copper Future 3.83 3.87 -1.0% -0.04 +0.4%
YTD relative to previous day’s close
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(END) Dow Jones Newswires
June 15, 2023 03:51 ET (07:51 GMT)
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