Today’s Stock Exchanges, July 24th. Setback for EU manufacturing, weak lists with eyes on Fed and ECB rate hikes
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Weak start for the financial markets in view of the double appointment with the central banks scheduled for the week. A year after Christine Lagarde initiated hikes, observers are still expecting a quarter-point move at Thursday’s summit. On the other hand, fog could remain around the road to be taken for the next meeting, in September, for which some analysts expect a final step while others are inclined for the ECB to take a break. Before the Eurotower, however, it will be the turn of the Fed and here too the expectation is for +25 basis points. In anticipation of these important developments, investors register the contraction of the main economies of the area with the single currency emerging with the PMI manufacturing indices: in Germany the July indicator collapses to 38.8 points, against the estimates of 41 and therefore well below the neutral threshold of 50 points. Services come in at 52 from forecasts of 53.1 points. The composite dropped to 48.3 from the 50.3 indicated by analysts. Less signs also for France where manufacturing fell to 44.50 points from 46 points in June and services to 47.4 from 48, both below market expectations.
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Tokyo sharply up, driven by the weak yen (+1.21%)
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Stellantis-Samsung, agreement for a second US gigafactory
Weak opening for the EU
Weak opening for the main European stock exchanges in the first session of the week. Paris lost 0.36% to 7,405 points, London 0.28% to 7,641 points and Frankfurt 0.31% to 16,126 points. Heavy Madrid (-1.54% to 9,424 points), in the aftermath of the vote which did not lead to a certain government majority.
Tokyo sharply up, driven by the weak yen (+1.21%)
The Tokyo Stock Exchange ended the first session of the week sharply higher, supported by the weakness of the yen, on expectations of maintaining the ultra-expansive monetary policy of the Bank of Japan (BoJ) at this week’s meeting. The reference index Nikkei marks an increase of 1.21% to 32,700.94, and an increase of 396 points. In terms of exchange rates, the Japanese currency continued to depreciate against the dollar at 141.50 and at 157.50 against the euro.
Stellantis-Samsung, agreement for a second US gigafactory
Stellantis and Samsung Sdi have signed a memorandum of understanding for the construction of the second battery production plant in the United States in the framework of the StarPlus Energy joint venture. The plant, which is scheduled to start production in 2027, aims to have an initial annual production capacity of 34 gigawatt hours (GWh). The location of the new site is being evaluated. In May of last year, Stellantis and Samsung Sdi declared their commitment to build the first battery plant in the United States in Kokomo, Indiana. The launch is scheduled for the first quarter of 2025 and the plant will have an annual production of 33 Gwh, higher than the initial target of 23 Gwh. “This new plant will help achieve our ambitious goal of offering at least 25 new battery electric vehicles to the North American market by the end of this decade,” said Carlos Tavares, CEO of Stellantis.
Vodafone quarterly revenue down
Vodafone closed the first quarter of the 2023/2024 financial year with consolidated revenues down by 4.8% to 10.74 billion euros. Down 4.2% to 9.11 billion, but in both cases organic growth was 3.7%, versus 2.88% expected by analysts. Full-year estimates confirmed with an EBITDA of approximately €13.3 billion and an adjusted net cash position of €3.3 billion.
Downward futures for the EU stock exchanges and Wall Street
Falling futures for the main European stock exchanges at the beginning of a week in which the ECB will meet. Markets expect the central bank to raise rates by another 25 basis points and at least 98% of investors expect it to do the same before the end of the year. Frankfurt’s Dax drops by 0.23%, London’s FTSE 100 drops by 0.27%, the Euro Stoxx 50 drops by 0.23%. Futures ‘watchful’ on Wall Street in view of the first session of a week in which the meetings of the Fed, the ECB and the Boj are expected and the publication of a flurry of ‘super’ quarterly reports including those of Alphabet, Amazon, Microsoft and Meta. The Dow Jones futures mark a -0.01%, that of the S&P 500 register a +0.02%, while for the Nasdaq it travels on a +0.12%.
Mixed bags in Asia
Concerns about the performance of the Chinese economy keep Asian stock markets under pressure, awaiting the directives of some important central banks. There is also anticipation for this week’s Chinese Politburo meeting which could announce further stimulus, although so far investors have been disappointed with Beijing’s moves. Hong Kong’s Hang Seng index fell 1.65%, Shanghai 0.14% and Shenzhen 0.29%. In contrast, the Kospi of Seoul (+0.68%) and Tokyo, with the Nikkei at +1.12%.
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