European Shares Likely To See Cautious Start Ahead Of ECB Rate Decision

European stocks may open flat to slightly lower on Thursday as investors await today’s ECB rate decision.

A 75-bps rate hike is expected for the second consecutive time despite political pressure to tread more carefully amid a looming recession.

Meanwhile, following disappointing earnings from Alphabet and Microsoft, Facebook parent Meta Platforms forecast a weak holiday quarter and significantly more costs next year, amid a broad slowdown in online ad spending, challenges from Apple’s iOS privacy update and increased competition from TikTok.

Amazon and Apple will unveil their financial results later today, along with industrial bellwether Caterpillar and McDonald’s.

On the data front, the latest economic data, including reports on weekly jobless claims, durable goods orders and third quarter GDP may offer additional clues on the economic and rate outlook.

Asian stocks traded mixed, and the dollar was pinned near one-month lows while oil extended gains after climbing over 3 percent on Wednesday.

U.S. stocks ended mostly lower overnight, as warnings from the tech behemoths overshadowed investor optimism over falling Treasury yields.

The tech-heavy Nasdaq Composite showed wild swings before closing 2 percent lower following negative earnings news from tech giants Microsoft and Alphabet.

The S&P 500 shed 0.7 percent while the Dow finished marginally higher to stretch its winning streak to a fourth session on the back of better-than-expected quarterly earnings from Visa.

European stocks hit five-week highs on Wednesday as a smaller-than-expected interest rate hike by the Bank of Canada signaled that central banks around the world are getting closer to the end of the tightening cycle.

The pan European STOXX 600 gained 0.7 percent. The German DAX rallied 1.1 percent, France’s CAC 40 index rose 0.4 percent and the U.K.’s FTSE 100 added 0.6 percent.

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