Wall Street was mainly lower on Wednesday while European stocks and the FTSE 100 were all in the red as investors digested a raft of earnings reports and positioned themselves for central bank decisions.
The US Federal Reserve is meeting later with investors anticipating a quarter percentage point hike, while the European Central Bank (ECB) will meet on Thursday with analysts also expecting policymakers to announce a 25 basis point rate hike. A decision by the Bank of Japan (BoJ) at the end of the week will also be closely monitored.
FTSE and European stocks
Across the pond, the FTSE 100 (^FTSE) was down 0.39% at 7,660.65 points in late afternoon trade. The CAC 40 (^FCHI) in Paris fell 1.58% to 7,298.01 points, while in Germany, the DAX (^GDAXI) lost 0.63% to 16,109.07 points.
In Asia, markets were lower overnight. The Nikkei 225 (^N225) closed flat at 32,688.67 points. The Hang Seng (^HSI) in Hong Kong declined 0.61% to 19,307.55. In mainland China, the Shanghai Composite (000001.SS) fell by 0.41% to 3,217.27 points.
In commodities, oil prices fell as investors await interest rate decisions from central banks.
Investors will be keeping across a raft of financial updates today including first-half results from Rio Tinto (RIO), British American Tobacco (BATS.L), Reckitt Benckiser (RKT.L), Centamin (CEY.L) and Breedon (BREE.L).
Rio Tinto reported a steep drop in profit and dividends, with both falling by about a third from a year earlier.
British American Tobacco said revenue was up 4.4% and profit from operations was up 61.4% as the company continues to invest in alternative products, such as vapes, to sustain growth.
Tadeu Marroco, BAT chief executive, said in a statement: "Having been in my new role for 10 weeks, I’m pleased with the resilient performance of BAT in the first half of 2023 and the renewed sense of energy across the organisation."
Consumer goods company Reckitt Benckiser reported a fall in sales volumes in its first-half results by 4.4% with the company noting it had been cautious to pass on price rises to customers.
Gold mining company Centamin, meanwhile, said sales came in at $425.61m compared to $381.79m a year ago and said net income was $90.97m, compared to $84.74m a year ago.
Construction company Breedon Group said revenue grew 11% to £742.7m while its profit was down 5% to £56.5m.
In further corporate highlights, metals miner Fresnillo (FRES.L) released a trading statement. It reported a 1.4% rise in silver production compared to the first half of last year, with the increases primarily driven by the ramp-up of the Juanicipio project in Mexico.
Stellantis (STLA) reported net profit of €10.9bn, which was up 37% compared to H1 2022, while Spanish lender Banco Santander reported a record profit for the first half of the year.
"Santander achieved an attributable profit of €5,241m in the first half of 2023, up 7% in both constant and current euros versus the same period last year, as strong growth in revenues, particularly in Europe, offset the year-on-year growth in provisions in North and South America," a company press release said.
In the US, quarterly results from Meta Platforms (META), Coca-Cola (KO), Boeing (0BOE.L), AT&T, LAM Research (0JT5.L), Hess (0J50), eBay (eBay), Teradyne (0LEF), Mattel (0JZH) and United Rentals (URI) are also out today.
On Thursday, it will be the turn of BT, Shell (SHEL.L), Barclays (BARC.L), TotalEnergies (TTE), Volkswagen (VOW3.DE), Nestle (NESN.SW), Intel (INTC), Ford (F), and McDonalds (MCD). Lastly, more will follow on Friday from AstraZeneca (AZN), Standard Chartered (STAN.L), NatWest (NWG), IAG (IAG.L), Air France-KLM, Sanofi (SNY), Chevron (CVX), and Procter & Gamble (PG).
The US Federal Reserve meeting takes place today, as earlier noted, and expectations are for a quarter percentage point hike.
“The Fed has somewhat backed itself into a corner, and another 25bp increase in rates still appears a done deal – this is indeed effectively fully priced in by futures markets. That said, we think that there is now enough evidence to limit the need for more hikes beyond then, and believe that Wednesday’s rate increase will transpire to be the last,” Matthew Ryan, head of market strategy at global financial services firm Ebury, said.
The European Central Bank (ECB), meanwhile, meets on Thursday with analysts also expecting policymakers to announce a 25 basis point rate hike.
The Bank of Japan (BoJ) is then meeting on Thursday and Friday to discuss it next monetary policy path.
“Traders are expecting plenty of fireworks on the back of these events, while policymakers are very much on the edge, and they are bound to maintain their rhetoric if they want to tame inflation.
The Federal Reserve Bank will announce the most important decision about their monetary policy, which will not only impact the fixed income market but also equities, forex, and cryptos,” Naeem Aslam, chief investment officer at Zaye Capital Markets, said.
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