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STOXX CREEPS LOWER, LITTLE FACEBOOK CONTAGION (09013 GMT)
European shares are off to a weaker start this morning as investors await for the BoE to raise rates for a second time in a row and possible hawkish signals from the ECB amid growing price pressures in the euro zone.
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But while Nasdaq futures have fallen as much as 2.4% after the shock drop in Facebook shares, equities on the old continent are displaying a more contained reaction, in a possible sign of resilience to troubles affecting big U.S. tech.
The pan-European STOXX 600 equity benchmark was down only 0.4% in early deals with a drop in tech and industrials partly offset by stronger oil stocks, while volatility edged up slightly, staying well below the peaks hit late January.
(Danilo Masoni)
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LET THE FUN BEGIN (0740 GMT)
If you were hoping for calm before Thursday's Bank of England and European Central Bank meetings, forget it.
U.S. stock futures are down sharply in early London trade -- Nasdaq futures are sliding 2% with tech stocks globally in the doldrums.
Facebook owner Meta Platforms Inc's (FB.O) shares plunged more than 20% late on Wednesday after posting weaker-than-expected forecasts. In Japan, Sony and Panasonic shares fell over 6%, while stock futures point to a weak open in Europe.
That's all before the BoE looks set to hike its key rate 25 basis points to 0.5% -- the threshold at which it has said it will start unwinding its 895 billion pound ($1.2 trillion) quantitative easing programme.
For some, markets are underestimating the risks of so called quantitative tightening, QT for short. Others note the BoE's ability to surprise, noting November when markets were positioned for a rate hike and the BoE left rates unchanged and then December, when markets expected no move and the BoE hiked.
The takeaway? The BoE's decision at 1200 GMT may not bring what we all expect.
The ECB meanwhile is not expected to change policy on Thursday. But ECB President Christine Lagarde may have to acknowledge that inflation could stay high for longer than it had projected, a signal that may be taken by some as a hint at a faster exit from stimulus.
Data on Wednesday showed a 5.1% January inflation print, the highest ever for the euro zone.
Markets price 30 bps of tightening by year-end; the ECB insists a move in 2022 is unlikely.
If Lagarde admits price pressures have been underestimated, rate-hike bets could be bought forward, triggering an unwanted tightening of financing conditions.
Meanwhile data out this morning showed that Turkey's annual inflation soared to near-50% and producer prices to more than 90%, heaping fresh pressure on the lira. read more
Oh yes, let the fun begin.
Key developments that should provide more direction to markets on Thursday:
- Nordea Q4 net profit beats forecast. read more
- ING reports Q4 pretax profit up 27% to 1.33 billion euros read more
- Turkish president Erdogan visits Ukraine
- Services PMI everywhere, US factory orders/ISM non-manufacturing PMs/weekly jobless claims
- US earnings: Alibaba, Eli Lilly, Merck, Honeywell, Estee Lauder, Hersheys, Lazard, Cardinal Health, ConocoPhillips, Amazon, Ford, Activision, News Corp,
- European earnings: Intesa Sanpaolo, Dassault, BBVA, Shell, Danske Bank, BT, Compass Group, Skanske, ING, Roche, Nokia, Nordea
- Emerging markets: Egypt, Czech central bank meeting
(Dhara Ranasinghe)
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EUROPE EYES WEAKER START ON ECB, BOE DAY (0731 GMT)
European shares were set to open lower on Thursday ahead of the BoE and ECB policy meetings and following heavy losses on Wall Street where Meta shares plunged 20% after a weaker-than-expected forecast and first-time fall in Facebook users.
Futures on the Euro STOXX 50 and FTSE indices were down 0.5% and 0.2% respectively , while Nasdaq futures dropped 2.1%, indicating heavy losses for tech stocks later on Wall Street. Needless to say European tech could also feel some pressures.
In Europe it's also a heavy earnings day. Shell Q4 profits smashed forecasts, lifted by oil and gas prices, while in banks, the Nordic region's biggest lender Nordea posted better-than-expected Q4 net profit, BBVA saw Q4 net profit rise 1.6% and ING reported a 27% jump in pretax profit.
Infineon is also on the watch-list after it lifted its revenue forecast for 2022 as it predicted that a global shortage of semiconductors will continue well into the current year.
(Danilo Masoni)
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The Link LonkFebruary 03, 2022 at 04:13PM
https://www.reuters.com/markets/stocks/live-markets-stoxx-creeps-lower-little-facebook-contagion-2022-02-03/
LIVE MARKETS STOXX creeps lower, little Facebook contagion - Reuters
https://news.google.com/search?q=little&hl=en-US&gl=US&ceid=US:en
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