European Stocks Opens on Wednesday – Investor Expectations
European stocks should open around the flat line on Wednesday. Investors are watching the latest data from the eurozone and the latest Covid growth in the region. According to IG, the UK FTSE index opens 6 points below 7260. Germany DAX 4 points lower at 15933. One point on French CAC 40 7045; And the Italian FTSE MIB 27023, 84 points.
European markets continue to monitor the Covid crisis in the region this week. It is noteworthy that as winter approaches, more countries are considering strict restrictions on Covid and partial closures to stop growing infections. Germany is likely to decide on harsh measures soon, amid an increase in cases in the country. France recorded more than 30,000 new daily infections on Tuesday for the first time since August.
Investors research the latest business data from the region; European stocks retreated on Tuesday and closed lower. Although according to the data, the business activity of the Eurozone in November increased unexpectedly.
The IHS Markit PMI, a helpful indicator of economic soundness, rose to 55.8 in November. In October, the figure was 54.2. However, it is worth noting that optimism about economic activity has declined shortly. This came amid a new wave of COVID-19 infections in the region and rising prices; Consequently, the outlook for December has deteriorated.
US stock futures changed slightly after technical stocks traded for the second day in a row due to pressure from rising rates. This gave impetus to financial and energy supplies. Meanwhile, Asia-Pacific stocks were mixed in trading on Wednesday; Japanese actions led to losses in the region.
European Shares and Analytics
The S&P 500 in the US rose on Tuesday. Earnings in cyclical stocks helped to offset losses in technology stocks. John Bailer, deputy head of Newton Investment Management, said more cyclical areas of the market could continue to work well in conditions of good economic growth.
Investors are in a quieter period to get new information about companies. David Bahnsen, Chief Investment Officer of The Bahnsen Group, is looking forward to his fourth-quarter profit season. He said the basics are going to be the next step for the market. The reason for this is whether the revenue is still higher than expected or not.
According to the European economist of Capital Economics, it is noteworthy that in parallel, the eurozone economy may experience stagnation in the last three months of the year with a scenario. According to which Austria and Germany are locked in, and consumers elsewhere will become more cautious.
The deterioration of the German Kovid-19 means that a large part of the country may soon be subject to stricter restrictions. This will potentially reduce GDP growth by 0.25% in the fourth quarter of the eurozone. The economic impact of any restriction will depend on its severity and duration. However, it is expected that if the closure is implemented in additional countries in the region, the economic outlook could deteriorate significantly.
Inflation and Expectations
The Fed’s outlook has softened bond market inflation expectations. The New Zealand currency depreciated after interest rates rose to 0.75% to stem price pressures. This is a more minor step than some experts would expect. The central bank has projected 2% lending costs by the end of 2022.
Mitigating inflation is now a central stage for policymakers. The economical parameters of the pandemic era have been tightened. US data will allow investors to read about price pressures and economic recovery, potentially disrupting markets. Inflationary trends suggest that the federation should start tightening measures sooner than the current signal.
The oil produced due to the planned joint production of strategic reserves by the US and other countries did not meet expectations. Gold has risen slightly but remains under high yield pressures.
