The midday market overview, compiled by Dow Jones Newswires:
===
+++++ HOLIDAY NOTICE +++++
WEDNESDAY: The stock exchanges will remain closed in Japan (bank holiday) and Russia (New Year holidays).
THURSDAY: In Russia (New Year holidays) the stock exchanges will remain closed
+++++ STOCK AND BOND MARKETS (1:35 p.m.) +++++
INDEX level +- % +-% YtD
E-Mini Future S&P 500 4,768.25 -0.4% -1.1%
E-Mini Future Nasdaq-100 16,614.00 -0.6% -2.4%
Euro Stoxx 50 4,461.79 -1.1% -1.3%
Stoxx-50 4,071.86 -0.5% -0.5%
DAX 16,606.78 -1.0% -0.9%
FTSE 7,655.66 -0.9% -0.2%
CAC 7,418.22 -1.5% -1.7%
Nikkei-225 0.00 0% 0%
EUREX status +/- points +/- points YtD
Bund future 136.91 +0.17 -0.26
+++++ COMMODITIES MARKETS +++++
ROHOEL most recently VT-Settlem. +/-% +/- USD% YTD
Brent/ICE 76.00 75.89 +0.1% +0.11 -1.4%
GAS VT Settlem. +/- EUR
Dutch TTF 32.23 30.28 +6.5% +1.96 -5.7%
METALS last day previous +/- % +/- USD % YTD
Gold (spot) 2,044.73 2,058.83 -0.7% -14.10 -0.9%
Silver (spot) 23.29 23.73 -1.8% -0.44 -2.1%
Platinum (spot) 974.12 986.00 -1.2% -11.88 -1.8%
YTD based on the previous day’s closing level
Oil prices are falling along with other risky investments such as stocks. The drop in prices is somewhat surprising in retailers, as geopolitical tensions are increasing due to the escalation in the Middle East war and the precarious situation in the Red Sea due to the attacks on civilian cargo ships by the Iranian-controlled Houthi militias. Prices are falling due to a general move away from risky assets, while the dollar rose significantly the day before, ING judges. However, tensions are increasing with the sending of an Iranian warship into the Red Sea and the killing of a Hamas leader in Beirut. “Although the geopolitical situation is worrying the oil market, a fairly comfortable balance in the oil market in the first half of 2024 helps to somewhat alleviate these worries,” the analysts said.
+++++ OUTLOOK FOR STOCKS USA +++++
Wall Street is likely to start trading on Wednesday with slight losses. Expectations of interest rate cuts appear to have gone a bit too far, they say. Added to this are recent weak economic data from China and the ongoing conflicts in Ukraine and the Middle East, where no solution has yet emerged. “Given the strong rally that U.S. stocks have experienced from their low point since October 27, it should come as no surprise that investors are taking the opportunity to assess developments from the October low through last Friday,” said the strategists around John Stoltzfus, chief investment strategist and managing director at Oppenheimer. The stock market is likely to remain “data dependent” until further catalysts cause movement. This could, among other things, be the start of the reporting season at the end of next week, when JP Morgan, Bank of America, Wells Fargo and Citigroup will present their quarterly figures. The US economic data agenda is clear in the middle of the week. The ISM index for the manufacturing sector will be published in December. In addition, there are the newly created jobs in the US private sector. This is followed by the minutes of the US Federal Reserve meeting from December, which should be examined carefully for indications of the Fed’s further interest rate course.
+++++ ECONOMIC OUTLOOK ++++++- US
16:00 ISM manufacturing index December
FORECAST: 47.2 points
previously: 46.7 points
8:00 p.m. Fed, minutes of the FOMC meeting of December 12/13, 2023
+++++ FINANCIAL MARKETS EUROPE +++++
Weaker – The European stock markets extended their losses until midday on Wednesday. Concerns that interest rate cut speculation in the market has gone too far continues to cause unrest. This is clear from the recent rise in yields on the bond markets, a trend that tends to continue on Wednesday. Meanwhile, the revision of the interest rate cut fantasy has already begun. There will be one on the markets Interest rate cut According to Deutsche Bank, in the USA for March there is now only a probability of 85 percent. At the turn of the year, this estimate was still at 100 percent. After initial gains, Atos is now down more than 6 percent. The news that Airbus (-2.1%) is negotiating to acquire the big data and cyber security division (BDS) from Atos is causing movement. The bid is said to have a volume of 1.5 to 1.8 billion euros, which appears to be too low for Atos investors. However, Airbus shareholders are also displeased: As Citigroup notes, the market first needs to be convinced that it is a good idea to take over the area instead of simply purchasing the relevant services. With the start of the 2024 share buyback program, Deutsche Telekom shares will buck the trend by 1.6 percent. The interest rate-sensitive technology sector is down 1.5 percent, with commodity stocks falling more sharply (-2.1%). Auto1 loses 3.2 percent – according to traders, Morgan Stanley is said to have rated the stock “underweight”.
+++++ FOREX +++++
FOREX last +/- % Wed, 8:25 am Tue, 5:30 pm % YTD
EUR/USD 1.0926 -0.1% 1.0957 1.0957 -1.1%
EUR/JPY 156.20 +0.5% 156.01 155.36 +0.4%
EUR/CHF 0.9324 +0.2% 0.9327 0.9290 +0.5%
EUR/GBP 0.8654 -0.2% 0.8669 0.8681 -0.2%
USD/JPY 142.93 +0.6% 142.38 141.80 +1.5%
GBP/USD 1.2626 +0.0% 1.2630 1.2623 -0.8%
USD/CNH (Offshore) 7.1580 +0.1% 7.1490 7.1483 +0.5%
Bitcoin
BTC/USD 42,403.81 -5.8% 45,297.81 45,222.66 -2.6%
The dollar continues its upward trend from the previous day. The dollar index gains x.x percent. The dollar is gaining in value as markets question recent bets on drastic US interest rate cuts in 2024, they say. The upcoming US data is likely to be good and support the dollar, according to ING.
+++++ FINANCIAL MARKETS EAST ASIA +++++
East Asian stock markets followed Wall Street’s weak lead on Wednesday. After the rally of the past few weeks, there was profit-taking there – especially in stocks from the technology sector and companies from the growth segment that are considered to be particularly sensitive to interest rates. At the same time, the background was rising yields on the bond market, also triggered by profit-taking but also concerns that speculation about the extent of the interest rate cuts priced in by the market in 2024 had gone too far. Market participants were now waiting for the monthly US labor market report on Friday and hoped that it would provide insights into the state of the US economy and thus the prospects for the US Federal Reserve’s interest rate course, it was said. The first indications could already be provided by the data on job vacancies due later in the day and on Thursday by the ADP labor market report on newly created jobs in the US private sector. Among individual stocks, BYD (-0.1%) in Hong Kong held up better than the broader market. The electric car maker’s shares benefited from BYD overtaking Tesla as the highest-volume seller of vehicles for the first time on a quarterly basis, dealers said.
+++++ CREDIT +++++
The risk premiums on the European credit market will rise sharply on Wednesday. This means that the issue of rising yields on the bond markets has now also become a burdensome factor for Credit. Accordingly, the announcement of the ISM index from the USA for the manufacturing sector in December could also cause movement here in the afternoon. However, the minutes of the Fed’s open market meeting in mid-December in the evening will be even more important – investors are hoping for further information about the future monetary policy in the USA.
+++++ COMPANY NEWS SINCE 7.30 AM +++++
GERMAN RAILWAYS
has accused the train drivers’ union GDL of serious conflicts of interest in the midst of the current collective bargaining round in view of the temporary worker cooperative Fair Train that it founded. The GDL acts “at the same time as an employer and as a union,” explained Deutsche Bahn’s human resources director Martin Seiler.
AIRBUS
is negotiating with Atos to acquire its big data and cybersecurity division BDS and has valued the segment at up to 1.8 billion euros in an indicative offer. The French IT service provider Atos is now opening the due diligence phase for Airbus for the possible sale of the division.
ALROSA
As part of a new package of sanctions against Russia, the EU states have imposed sanctions on the largest Russian diamond producer PJSC Alrosa. The state-owned company and managing director Pavel Alexevich Marinychev are now on the EU sanctions list as a result of the Russian attack on Ukraine.
QIAGEN
(MORE TO FOLLOW) Dow Jones Newswires
January 03, 2024 07:38 ET (12:38 GMT)