European Equities: COVID-19 Numbers, China Trade Data, and Corporate Earnings in Focus

Concerns over the effects of the coronavirus on the U.S and global economy weighed. This remains a key factor near-term and, while a slower spread of the virus is market positive, the extent of the economic impact remains an unknown.

With earnings season kicking off this week, there’s certainly plenty for the markets to fret about…

The Stats

It was a quiet day on the Eurozone economic calendar on Monday, with no material stats released due to the public holiday.

From the U.S, it was also a quiet day following Friday’s market close, with no material stats to influence.

The Market Movers

The European markets were closed on Friday and Monday. The below represents Thursday’s moves.

For the DAX: It was another bullish day for the auto sector on Thursday. Continental, Daimler, and Volkswagen led the way, with gains of 4.85%, 5.29%, and 4.77% respectively. BMW saw a more modest rise of 3.36%.

It was also a bullish day for the banks, with Commerzbank and Deutsche Bank rising by 1.19% and by 1.98% respectively.

Deutsche Lufthansa gained just 0.20% on the day, with the airline industry now in search of government funding…

From the CAC, it was a bullish day for the banks. BNP Paribas rallied by 5.38%, with Credit Agricole and Soc Gen rising by 3.84% and 2.99% respectively.

The auto sector saw more modest gains on the day, however, with Peugeot and Renault gaining 0.64% and 0.82% respectively.

Air France-KLM also saw red once more, however, falling by 0.30%, while Airbus SE continued its recovery with a 1.99% gain on the day.

On the VIX Index

The VIX saw red for a 3^rd consecutive day on Monday. Following on from a 3.88% decline on Thursday, the VIX fell by 1.20% to end the day at 41.2. It had been a public holiday in the U.S on Friday.

The downside came in spite of S&P500 joining the Dow in the red with a 1.01% fall on Monday.

We have seen the VIX continue to ease back from its mid-March, largely in response to monetary and fiscal policy support. Government and Central Bank efforts to counter the economic impact of COVID-19 gave the S&P500 its best week since 1974 last week.

Corporate earnings and economic data out of China and the U.S this week will be a test, however.

The Day Ahead

It’s a quiet day ahead on the Eurozone economic calendar. There are no material stats due out of the Eurozone to provide direction.

Economic data from the U.S will be of little influence later today, with stats limited to import and export price figures.

Ahead of the European open, however, China’s March trade figures will set the tone going into the European open.

Away from the economic calendar, corporate earnings will also have an impact on risk appetite today.

From the U.S, Johnson & Johnson, JPMorgan, and Wells Fargo are marquee names on the docket.

As always, the coronavirus numbers will also garner attention, as the markets look for the downward trend in new cases to continue.

On Monday, the total number of coronavirus cases across France, Germany, Italy, and Spain rose by 12,827 to 596,466. In the U.S, the total number of cases increased by 25,944 to 586,377. That took the total number of cases globally to 1,923,279.

Only France reported an upward move on Monday, with the other 3 member states reporting a fall in new cases. For the 4 most adversely affected member states, it was a 3^rd consecutive daily fall in the number of new cases.

From the U.S, a similar trend was reported, with the number of new cases falling for 4 consecutive days. On Monday, 25,944 new cases were reported, with reports of NY seeing a plateau also market positive.

In the futures markets, at the time of writing, the DAX was up by 171 points, with the Dow up by 301 points.