European stock markets expected to rise, cautious optimism about the Fed

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After the Easter weekend, the European stock markets are definitely on the rise. For their part, investors are cautiously optimistic about central bank interest rate hikes, pending the Fed’s May policy meeting.

 

Easter bells may be heralding good news. After the long weekend, the main European stock markets are expected to rise on Tuesday.

 

At 10:30 a.m. Tuesday, the CAC 40 was up 0.78% at the opening after four days of closure on the Paris Bourse. The Dax in Frankfurt was up 0.53% and the FTSE 100 in London up 0.43%. The EuroStoxx 50 index gained 0.63%.

 

According to CME Group’s FedWatch barometer, investors expect the U.S. Federal Reserve (Fed) to raise rates by another 25 basis points after its next policy meeting on May 2 and 3.

 

However, Gary Ng, an economist at Natixis Corporate and Investment Bank, said the hike is less than what the market had previously anticipated. “Investors are more optimistic about the end of the rate cycle … we’re already at the top (of rates), that’s really the main driver of this oscillation we’re seeing right now”, he said.

 

The release of U.S. consumer and producer prices on Wednesday and Thursday will provide further evidence on inflation trends.

 

Luxury goods results imminent

 

In addition to questions about monetary policy, there are also questions about corporate financial results due this week, especially in the luxury goods sector. LVMH will open the ball on Wednesday, followed by Hermès on Thursday, while the big American banks such as JPMorgan Chase, Citigroup and Wells Fargo are expected on Friday.

 

According to the Reuters consensus, Eurozone retail sales, due this Tuesday at 09:00 GMT, are expected to fall by 0.8% over one month and 3.5% over one year.

 

The semiconductor sector in Europe is also worth watching. Samsung announced Friday evening that it expected a 96% drop in operating profit for the period January-March.

 

Caution Across the Atlantic

 

On Friday, the U.S. jobs report showed job creation at a steady pace in March. The U.S. Department of Labor announced that the U.S. economy had created 236,000 non-farm jobs last month, while the February figure was revised upward to 326,000 from 311,000 initially reported. The unemployment rate fell to 3.5% from 3.6% the previous month.

 

The New York Stock Exchange finished mixed on Monday. The Dow Jones Industrial Average gained 0.30 percent to 33,586.52 points. The S&P-500 gained 0.10 percent to 4,109.11 points, while the Nasdaq Composite fell 0.03 percent to 12,084.36 points.

 

On the stock side, semiconductor makers Micron Technology and Western Digital rose 8% and 8.2% after Samsung Electronics announced it would cut its chip production.

 

Asian stock markets: mixed movements

 

On the Tokyo Stock Exchange, the Nikkei index advanced 1.25% to 27,979.66 points and the broader Topix gained 0.75% to 1,991.41 points as the close approached.

 

In China, however, the Shanghai SSE Composite gave up 0.45% and the CSI 300 gave up 0.43%.

 

Consumer prices in China rose by 0.7% in March against an expected 1% increase, while producer prices fell by 2.5%, in line with expectations.

 

South Korea’s central bank on Tuesday kept its key rate at 3.5% after the status quo observed in February. According to analyst Gary Ng, the preservation of economic growth in Asian countries outweighs the control of inflation in contrast to the policy in the United States and Europe.

 

The MSCI index of Asian and Pacific stocks (excluding Japan) rose by 0.6%.

 

Euro and oil rise

 

On Tuesday at 10:30 am, the dollar took a break (-0.42%) after its strong rise last week. The euro is taking advantage of this to gain 0.26% and rise to 1.0887 dollars after falling 0.34% on Monday.

 

Bitcoin is trading above $30,000, at a new 10-month high, amid risk-off sentiment.

 

Oil prices are up after a forecast of a drop in U.S. crude inventories last week. Brent crude rose 0.74 percent to $84.80 a barrel, while U.S. light crude (West Texas Intermediate, WTI) rose 0.83 percent to $80.40.

 

Read also >European stock markets almost stable despite recession fears

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After the Easter weekend, the European stock markets are definitely on the rise. For their part, investors are cautiously optimistic about central bank interest rate hikes, pending the Fed’s May policy meeting.

 

Easter bells may be heralding good news. After the long weekend, the main European stock markets are expected to rise on Tuesday.

 

At 10:30 a.m. Tuesday, the CAC 40 was up 0.78% at the opening after four days of closure on the Paris Bourse. The Dax in Frankfurt was up 0.53% and the FTSE 100 in London up 0.43%. The EuroStoxx 50 index gained 0.63%.

 

According to CME Group’s FedWatch barometer, investors expect the U.S. Federal Reserve (Fed) to raise rates by another 25 basis points after its next policy meeting on May 2 and 3.

 

However, Gary Ng, an economist at Natixis Corporate and Investment Bank, said the hike is less than what the market had previously anticipated. “Investors are more optimistic about the end of the rate cycle … we’re already at the top (of rates), that’s really the main driver of this oscillation we’re seeing right now”, he said.

 

The release of U.S. consumer and producer prices on Wednesday and Thursday will provide further evidence on inflation trends.

 

Luxury goods results imminent

 

In addition to questions about monetary policy, there are also questions about corporate financial results due this week, especially in the luxury goods sector. LVMH will open the ball on Wednesday, followed by Hermès on Thursday, while the big American banks such as JPMorgan Chase, Citigroup and Wells Fargo are expected on Friday.

 

According to the Reuters consensus, Eurozone retail sales, due this Tuesday at 09:00 GMT, are expected to fall by 0.8% over one month and 3.5% over one year.

 

The semiconductor sector in Europe is also worth watching. Samsung announced Friday evening that it expected a 96% drop in operating profit for the period January-March.

 

Caution Across the Atlantic

 

On Friday, the U.S. jobs report showed job creation at a steady pace in March. The U.S. Department of Labor announced that the U.S. economy had created 236,000 non-farm jobs last month, while the February figure was revised upward to 326,000 from 311,000 initially reported. The unemployment rate fell to 3.5% from 3.6% the previous month.

 

The New York Stock Exchange finished mixed on Monday. The Dow Jones Industrial Average gained 0.30 percent to 33,586.52 points. The S&P-500 gained 0.10 percent to 4,109.11 points, while the Nasdaq Composite fell 0.03 percent to 12,084.36 points.

 

On the stock side, semiconductor makers Micron Technology and Western Digital rose 8% and 8.2% after Samsung Electronics announced it would cut its chip production.

 

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After the Easter weekend, the European stock markets are definitely on the rise. For their part, investors are cautiously optimistic about central bank interest rate hikes, pending the Fed’s May policy meeting.

 

Easter bells may be heralding good news. After the long weekend, the main European stock markets are expected to rise on Tuesday.

 

At 10:30 a.m. Tuesday, the CAC 40 was up 0.78% at the opening after four days of closure on the Paris Bourse. The Dax in Frankfurt was up 0.53% and the FTSE 100 in London up 0.43%. The EuroStoxx 50 index gained 0.63%.

 

According to CME Group’s FedWatch barometer, investors expect the U.S. Federal Reserve (Fed) to raise rates by another 25 basis points after its next policy meeting on May 2 and 3.

 

However, Gary Ng, an economist at Natixis Corporate and Investment Bank, said the hike is less than what the market had previously anticipated. “Investors are more optimistic about the end of the rate cycle … we’re already at the top (of rates), that’s really the main driver of this oscillation we’re seeing right now”, he said.

 

The release of U.S. consumer and producer prices on Wednesday and Thursday will provide further evidence on inflation trends.

 

Luxury goods results imminent

 

In addition to questions about monetary policy, there are also questions about corporate financial results due this week, especially in the luxury goods sector. LVMH will open the ball on Wednesday, followed by Hermès on Thursday, while the big American banks such as JPMorgan Chase, Citigroup and Wells Fargo are expected on Friday.

 

According to the Reuters consensus, Eurozone retail sales, due this Tuesday at 09:00 GMT, are expected to fall by 0.8% over one month and 3.5% over one year.

 

The semiconductor sector in Europe is also worth watching. Samsung announced Friday evening that it expected a 96% drop in operating profit for the period January-March.

 

Caution Across the Atlantic

 

On Friday, the U.S. jobs report showed job creation at a steady pace in March. The U.S. Department of Labor announced that the U.S. economy had created 236,000 non-farm jobs last month, while the February figure was revised upward to 326,000 from 311,000 initially reported. The unemployment rate fell to 3.5% from 3.6% the previous month.

 

The New York Stock Exchange finished mixed on Monday. The Dow Jones Industrial Average gained 0.30 percent to 33,586.52 points. The S&P-500 gained 0.10 percent to 4,109.11 points, while the Nasdaq Composite fell 0.03 percent to 12,084.36 points.

 

On the stock side, semiconductor makers Micron Technology and Western Digital rose 8% and 8.2% after Samsung Electronics announced it would cut its chip production.

 

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Thanks to its extensive knowledge of these sectors, the Luxus + editorial team deciphers for its readers the main economic and technological stakes in fashion, watchmaking, jewelry, gastronomy, perfumes and cosmetics, hotels, and prestigious real estate.

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