Europe open: Shares lower ahead of rate decisions; S4 Capital slumps

by | Jul 24, 2023

(Sharecast News) – European stock markets opened lower on Monday as investors eyed a trio of rate decisions this week from the US, European Union and Japan along with another deluge of earnings.

The pan-European Stoxx 600 index was down 0.20% in early deals with all major regional bourses lower.

“The recent market moves are stemming from the pivot towards the US, where the Federal Reserve is in position to set the stage for another interest rate increase, after it resumes its monetary tightening campaign this week. On Wednesday, the Federal Open Market Committee is widely expected to raise its benchmark rate,” said Hargreaves Lansdown analyst Sophie Lund-Yates

“The debate around how much the economy needs to be zapped with higher rates to quash inflation properly is still raging on. While the expectation is that interest rates will need to go higher still, that’s led to some stagnation in the US markets as we kick off the week, following strong gains last week.”

“Investors are holding their breath ahead of key tech earnings, which among other things, will paint a picture for how advertising demand is shaping up, as well as how the league tables are looking for the AI race. Market volatility, especially from the Nasdaq composite, is likely to be coming down the line.”

In equity news, shares in S4 Capital slumped as it cut full-year guidance to reflect caution on the part of its technology clients.

Net revenue over the second quarter was below budget, especially in May and June, in particular.

The digital advertising and marketing firm attributed the softness to the challenging macroeconomic conditions and cautious spending, especially by its tech clients who were very focused on the short-term.

Shares in Ryanair fell as the low-cost airline reported a better-than-expected rise in first-quarter profit, boosted by strong Easter sales, but was cautious about demand over the coming months due to aircraft delivery delays from Boeing and cost-conscious passengers.

The sentiment also hit rivals easyJet and Wizz

Reporting by Frank Prenesti for Sharecast.com

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