European Equities: Private Sector PMIs, COVID-19, and U.S Politics in Focus
Friday, 23rd October
French Manufacturing PMI (Oct) Prelim
French Services PMI (Oct) Prelim
German Manufacturing PMI (Oct) Prelim
German Services PMI (Oct) Prelim
Eurozone Manufacturing PMI (Oct) Prelim
Eurozone Markit Composite PMI (Oct) Prelim
Eurozone Services PMI (Oct) Prelim
It was another bearish day for the European majors on Thursday, with the DAX30 and EuroStoxx600 falling for a 4th consecutive day.
The losses were modest, however, with the DAX30 and EuroStoxx600 ending the day down by 0.12% and by 0.14% respectively. Relatively flat on the day was the CAC40, which slipped by 0.05%.
Weakening consumer confidence in Germany and the Eurozone weighed on the European majors, as Europe continued to suffer from a 2nd wave of the COVID-19 pandemic.
It was a relatively busy day on the Eurozone economic calendar. Key stats included consumer confidence figures for Germany and the Eurozone.
Germany’s GfK Consumer Climate Index fell from -1.6 to -3.1 for November. Economists had forecast a decline to -2.8.
According to the GfK survey,
- Concerns over COVID-19 weighed on consumer sentiment in October.
- Both economic and income expectations and the propensity to buy sub-indexes took a hit, leading to the decline in the index for November.
- Economic expectations took the biggest hit amongst the sentiment indicators, falling by 17 points to +7.1.
- Income expectations also waned, with the indicator falling by 6.3 points to +9.8.
- The propensity to buy indicator saw a more modest 1.4 point loss to +37.0.
From the Eurozone, the Flash Consumer Confidence Index fell from -13.9 to -15.5. Economists had forecast a fall to -15.0.
From the U.S
It was also a busier day on the economic calendar, with the weekly jobless claims and existing home sales figures in focus.
In the week ending 16th October, initial jobless claims came in at 787k, which was well below a forecasted 860k. In the week prior, claims had stood at 842k.
Housing sector data had a muted impact on the European majors late in the day.
The Market Movers
For the DAX: It was a mixed day for the auto sector on Thursday. Volkswagen rose by 0.95%, with BMW and Daimler gaining 0.47% and by 0.56% respectively. Continental bucked the trend, however, falling by 0.64%.
It was also a mixed day for the banks. Deutsche Bank rose by 0.42%, while Commerzbank fell by 1.18%
From the CAC, it was a mixed day for the banks. BNP Paribas fell by 0.15%, while Credit Agricole and Soc Gen rose by 0.74% and by 0.94% respectively.
It was a bullish day for the French auto sector, however. Peugeot and Renault ended the day with gains of 2.19% and 2.03% respectively.
Air France-KLM rallied by 3.13%, with Airbus SE rising by 0.61%.
On the VIX Index
It was a 2nd consecutive day in the red for the VIX on Thursday. Following a 2.39% slide on Wednesday, the VIX fell by 1.88% to end the day at 28.11.
Continued talks to deliver a pre-Election stimulus package left the U.S majors relatively flat on the day.
While failure to deliver on the stimulus package was negative, economic data from the U.S provided support to the U.S markets on the day.
The Day Ahead
It’s a particularly busy day on the Eurozone economic calendar. Key stats include French, German, and Eurozone private sector PMI figures for October.
We would expect plenty of influence from the numbers following the disappointment in September.
From the U.S, the private sector PMIs and U.S politics will also influence later in the day.
Going into the European open, expect market reaction to the final U.S Presidential debate to set the tone.
In the futures markets, at the time of writing, the Dow was down by 16 points, while the DAX was up by 21.5 points.
For a look at all of today’s economic events, check out our economic calendar.