European Equities: COVID-19, Earnings, Geopolitics, Stimulus, and Stats in FocusIt’s a busy day ahead for the markets. COVID-19 updates, earnings, U.S – China tensions and fiscal stimulus are in focus along with economic data.
Thursday, 23rd July
GfK German Consumer Climate (Aug)
Eurozone Consumer Confidence Flash
75% of retail CFD investors lose money
Friday, 24th July
French Manufacturing PMI (Jul) Prelim
French Services PMI (Jul) Prelim
German Manufacturing PMI (Jul) Prelim
German Services PMI (Jul) Prelim
Eurozone Manufacturing PMI (Jul) Prelim
Eurozone Markit Composite PMI (Jul) Prelim
Eurozone Services PMI (Jul) Prelim
It was a bearish day for the European majors on Wednesday, with the CAC40 falling by 1.32% to lead the way down. The DAX30 and EuroStoxx600 ended the day with losses of 0.51% and 0.87% respectively.
There were no major stats out of the Eurozone or the U.S to distract the majors on the day.
Following the Tuesday upswing in response to the progress on the EU Recovery Fund, the focus shifted to U.S – China relations.
News of China being ordered to shut down their Houston consulate by Friday weighed on market risk appetite. China’s response was of little comfort for the markets.
It was another quiet day on the Eurozone economic calendar. There were no material stats for the markets to consider.
From the U.S
Economic data was limited to June’s existing-home sales figures that also had a muted impact on the European majors.
The Market Movers
For the DAX: It was a bearish day for the auto sector on Wednesday. BMW and Continental declined by 0.55% and 0.69% to lead the way down.
Daimler and Volkswagen saw more modest losses of 0.38% and 0.15% respectively.
It was another mixed day for the banks. While Deutsche Bank rose by 0.78%, Commerzbank ended the day with a 1.31% loss.
From the CAC, it was a bearish day for the banks. Credit Agricole and Soc Gen fell by 2.30% and by 2.69% respectively to lead the way. BNP Paribas fell by a marginally more modest 1.92%.
The French auto sector also struggled, with Peugeot and Renault falling by 0.88% and by 2.35% respectively.
Air France-KLM eked out a 0.17% gain, while Airbus SE fell by 1.38%.
On the VIX Index
It was back into the red for the VIX on Wednesday. Marking a 3rd day in the red out of 4, the VIX fell by 2.09% to end the day at 24.32. On Tuesday, the VIX had risen by 1.55%.
After a choppy session, the U.S majors recovered from the red, with fiscal stimulus and COVID-19 vaccine news providing support.
Rising tensions between the U.S and China had tested investor sentiment early in the session.
The S&P500 and Dow rose by 0.57% and 0.62% respectively, with the NASDAQ gaining 0.24%.
The Day Ahead
It’s a busier day ahead on the Eurozone economic calendar. Key stats include GfK Consumer Climate figures out of Germany and Eurozone consumer confidence figures.
While we expect the numbers to influence, earnings, COVID-19 news, and geopolitics will also be in focus.
From the U.S
The weekly jobless claims figures are in focus later in the day. Another worse than expected set of numbers and expect the markets to react…
With tensions between the U.S and China on the rise once more, the markets could be in for another rollercoaster ride. The markets will need to decide whether a COVID-19 vaccine will arrive in time to prevent another economic meltdown.
Following the late rally in the U.S markets on Wednesday, any further chatter on fiscal stimulus will also need consideration.
And, there are also corporate earnings to consider. From Germany, Daimler will release its quarterly earnings.
On the U.S earnings calendar, Amazon.com (Thurs), Intel (Thurs), Twitter (Thurs) are amongst the big names.
The Latest Coronavirus Figures
According to figures at the time of writing, the number of new coronavirus cases rose by 221,985 to 15,313,437 on Wednesday. On Tuesday, the number of new cases had risen by 240,565. The daily increase was lower than Tuesday’s rise and 242,529 new cases from the previous Wednesday.
Germany, Italy, and Spain reported 2,214 new cases on Wednesday, which was up from 1,889 new cases on Tuesday. On the previous Wednesday, 1,523 new cases had been reported. Spain was the main contributor to the uptick in new cases for a 3rd consecutive day.
From the U.S, the total number of cases rose by 48,152 to 4,076,721 on Wednesday. On Tuesday, the total number of cases had increased by 67,140. On Wednesday, 22nd July, a total of 71,670 new cases had been reported.
In the futures markets, at the time of writing, the Dow was down by 8 points.
For a look at all of today’s economic events, check out our economic calendar.