Stock market: Europe set for a cautious start, with attention on quarterly results and the tech sector’s resilience
Oil prices rise again, with Brent at around $110 a barrel
(Il Sole 24 Ore Radiocor) - European stock markets are set for a cautious rise following the sell-off in recent sessions, whilst Asian markets are mixed, with Tokyo’s Nikkei up by more than one percentage point whilst Shanghai is trading lower. Yesterday, Wall Street closed mixed, with the Dow Jones and S&P 500 rising thanks to a series of positive quarterly results and falling oil prices, which offset the pressure on artificial intelligence-related shares. The Nasdaq Composite, however, is trading below par. Consequently, EuroStoxx 50 futures are up 0.22 per cent and FTSE MIB futures are up 0.21 per cent. The FTSE 100 in London is flat, with inflation rising to an annual rate of 3.5% in September.
Risk appetite therefore appears to have improved following a global sell-off in the technology sector that lasted several days, partly thanks to the results from SpaceX (+9.3 per cent in after-hours trading), which announced a 161 per cent rise in turnover in the third quarter, beating Wall Street’s estimates, with its artificial intelligence business growing ninefold. Today it will be the turn of Meta and Tesla to put their financial results to the test. However, concerns remain about the sustainability of the trend linked to artificial intelligence. Investors are increasingly focusing on the financial health and debt sustainability of AI-related companies, whilst the quarterly results season continues in full swing in Europe and the United States. Given the sector’s strong growth, attention is also focusing on companies’ ability to finance investments and generate sufficient cash flow. “The market is increasingly asking not only whether the demand for AI is genuine, but also who is financing it, on what terms and with what margin of safety,” commented Tickmill Group.
Tensions in the Middle East also remain a cause for concern, with oil prices rising again following fresh attacks on ships in the Strait of Hormuz, which are jeopardising shipments. Brent crude is up 1.45 per cent at $110.37 per barrel, whilst WTI is edging closer to the $100 mark at $99.11 (+1.32 per cent). In this context, today’s US data on crude oil stocks and production will be significant.
In the currency markets, the euro fell to 1.122 dollars (from 1.1233 dollars at yesterday’s close) and is trading at 177.47 yen (177.65). The cross-rate between the US dollar and the Japanese yen stood at 158.16 (158.17). Finally, gas prices resumed their rise to 87.9 euros per MWh (+3.4 per cent).
