European Equities: A Light Economic Calendar Leaves the Majors in the Hands of the U.S…

The Majors

It was a particularly bearish day for the European majors on Tuesday.

The CAC40 slid by 2.17%, with the EuroStoxx600 and the DAX30 ending the day with losses of 2.07% and 2.09% respectively.

A pickup in German consumer confidence provided the European majors with little support going into the European session.

Weaker consumer confidence numbers from the U.S and debt ceiling angst weighed on riskier assets later in the day. The Democrats failed to lift the debt ceiling, leaving the prospects of a shutdown and possible default.

From China, economic data set the mood early, with industrial profit figures from China disappointing. Year-to-date to August, industrial profits were up 49.5% compared with the same period in 2020. This was down from 57.3% in July.

The softer numbers followed a recent slew of economic data from China that had previously raised concerns over China’s economy.

The Stats

It was a relatively quiet day on the economic calendar, with German consumer sentiment in focus.

In October, the GfK Consumer Climate Index climbed from a revised -1.4 to +0.3 versus a forecasted -1.6.

According to the GfK survey,

• Both economic and income expectations were on the rise, along with propensity to buy.
• The economic expectations indicator rose by 7.7 points to 48.5 points. As a result, the indicator was up 24 points when compared with the same month of last year.
• For the income expectations indicator, a 6.9-point increase took the indicator up to 37.4 points. A higher value was last measured at 41.2 points in February 2020.
• The propensity to buy indicator saw a more modest 3.1 points increase in the month.
• As a result, consumer sentiment is higher than it has been for the last year and a half. A higher value was last measures in April 2020, at 2.3 points.

From the U.S

Economic data also included consumer confidence figures.

In September, the CB Consumer Confidence Index fell from 115.2 to 109.3.

Housing sector and trade data were also out but had a muted impact on the majors.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Tuesday. Daimler rose by 0.45% to buck the trend on the day. Continental slid by 1.89%, however, with BMW and Volkswagen declining by 0.13% and by 0.99% respectively.

It was a bearish day for the banks, however. Deutsche Bank and Commerzbank saw losses of 1.84% and 0.34% respectively.

From the CAC, it was a bearish day for the banks. Credit Agricole and Soc Gen slid by 2.26% and by 2.34% respectively. BNP Paribas saw a more modest 0.20% fall on the day.

It was also a bearish day for the French auto sector. Stellantis NV and Renault ended the day down by 3.19% and by 1.79% respectively.

Air France-KLM bucked the broader trend rising by 0.38%, while Airbus SE slid by 3.31%.

On the VIX Index

It was a second consecutive day in the green for the VIX on Tuesday.

Following a 5.69% rise on Monday, the VIX jumped by 23.93% to end the day at 23.25.

The Dow fell by 1.63%, with the NASDAQ and S&P500 ending the day down by 2.83% and by 2.04% respectively.