European shares edge higher after breakthrough in Merkel migration row

European Stock Markets

European shares edged higher on Tuesday after German Chancellor Angela Merkel’s conservatives settled a row over migration and gave some respite to investors facing a rage of political worries including trade tensions with the United States. 

The pan-European STOXX 600 was up 0.6 percent by 0833 GMT with Germany's DAX .GDAXI posting the best performance with a 0.9 percent rise.

The dispute over immigration had threatened to topple Merkel’s fragile governing coalition but in a breakthrough late on Monday evening, her rebellious interior minister dropped his threat to resign after five hours of talks.

Asian shares, which had sustained heavy falls overnight, particularly in China, recouped some of their losses before European bourses opened, helping restore sentiment.

Chinese financial markets have been jittery ahead of a July 6 deadline, when the U.S. is set to slap tariffs on $34 billion worth of Chinese goods that Beijing has vowed to match with tariffs on U.S. products.

Miner Glencore fell more than 10 percent after it said a subsidiary had received a U.S. Department of Justice subpoena requesting documents and records on compliance with the Foreign Corrupt Practices Act and U.S. money-laundering statutes.

The documents requested from subsidiary Glencore Ltd relate to the group’s business in Nigeria, the Democratic Republic of Congo (DRC) and Venezuela from 2007 to present, Glencore said, adding it was reviewing the subpoena.

Another big faller was BE Semiconductor, the Dutch equipment maker (BESI.AS) lost over 8 percent after cutting revenue forecast.

Societe Generale (SOGN.PA) rose 1.3 percent and Commerzbank (CBKG.DE) up 2.1 percent after the latter agreed to sell its equity markets and commodities business (EMC) to the French bank.

Global stocks Mixed as Trade Worries Linger; Euro Gains

Global Stock Markets

European stocks climbed and U.S. futures were steady as a dose of calm returned to markets on Thursday, though concerns surrounding global trade were not far away. The yield on 10-year Treasuries edged back above 3 percent, while the euro and pound gained.

The Stoxx Europe 600 Index managed to claw back a little ground following Wednesday’s selloff, even as carmakers took a hit after President Donald Trump ordered a probe into automobile imports to the world’s biggest economy. That news also dragged the MSCI Asia Pacific Index lower. Major American equity benchmarks were poised to open little changed.

Sterling rallied thanks to an April retail sales beat, while the lira resumed its slump as traders weighed whether an emergency rate hike was enough to stem losses. Safe-haven assets including gold and Japan’s yen climbed. Oil slipped.

It’s been a torrid week across markets so far, with investors forced to navigate escalating geopolitical and trade risks, from Trump’s decision to back away from an agreement with China to North Korea warning of a “nuclear-to-nuclear showdown.” Questions are swirling around the Italian populist government’s economic policies, while Brexit negotiations loom large over British assets. Amid the noise, the impact of somewhat dovish minutes from the Federal Reserve appeared to fade.

Meanwhile, emerging-market currencies rose despite the lira move, and developing-nation stocks also advanced. The euro strengthened after falling to a six-month low as traders await the latest minutes from the ECB.

Stocks
The Stoxx Europe 600 Index climbed 0.3 percent as of 10:51 a.m. London time.
Futures on the S&P 500 Index increased less than 0.05 percent.
The U.K.’s FTSE 100 Index declined 0.1 percent.
Germany’s DAX Index advanced 0.1 percent.
The MSCI Emerging Market Index jumped 0.5 percent.
The MSCI Asia Pacific Index decreased 0.2 percent to the lowest in more than two weeks.

Currencies
The euro gained 0.3 percent to $1.173, the biggest climb in two weeks.
The British pound climbed 0.3 percent to $1.3392, the largest climb in more than five weeks.
The Japanese yen advanced 0.3 percent to 109.73 per dollar, the strongest in more than a week.
The Turkish lira decreased 2.4 percent to 4.6865 per dollar, the weakest on record.

Bonds
The yield on 10-year Treasuries advanced one basis point to 3.01 percent, the biggest gain in a week.
Germany’s 10-year yield gained one basis point to 0.52 percent.
Britain’s 10-year yield increased one basis point to 1.448 percent.
Italy’s 10-year yield decreased six basis points to 2.344 percent.

Commodities
West Texas Intermediate crude declined 0.7 percent to $71.32 a barrel, the lowest in more than a week on the biggest drop in almost two weeks.
Gold increased 0.2 percent to $1,296.34 an ounce, the highest in more than a week on the largest climb in two weeks.
Brent crude sank 1 percent to $79.00 a barrel, the biggest tumble in more than two weeks.

European shares bounces with nudge from financial and tech stocks

European Stock Markets

A bounce across financials and tech stocks helped European stocks nudge higher on Thursday, though carmakers’ shares came under pressure after the United States launched a probe into auto imports.

The pan-European STOXX 600 index was up 0.3 percent by 0857 GMT, after falling more than 1 percent from a 3 1/2-month peak in the previous session as worries over spending plans from Italy’s new coalition and global trade weighed on risky assets.

Concerns over a U.S.-China trade deal continued after U.S. President Donald Trump said that any deal would need “a different structure”.

German carmakers BMW (BMWG.DE), Daimler (DAIGn.DE) and Volkswagen (VOWG_p.DE) dropped 1.8 to 2.8 percent after the United States launched a national security investigation into car and truck imports that could lead to new U.S. tariffs.

Germany's benchmark DAX index .GDAXI inched 0.1 percent higher and Europe's autos sector .SXAP was the worst-performing, losing 1.4 percent.

But a bounce among financials and tech stocks helped European markets rise. Minutes from the U.S. Federal Reserve’s last meeting indicated that the central bank would maintain a gradual approach to rate hikes, something seen as supportive of risky assets.

Italy's FTSE MIB .FTMIB was up 0.9 percent after Italy's president invited political novice Giuseppe Conte to be prime minister.

Aryzta (ARYN.S) was a standout faller among individual stocks. Shares in the Swiss food company slumped 28 percent after the firm cut its full year earnings outlook once more.

Elsewhere shares in Deutsche Bank (DBKGn.DE) reversed slight gains from earlier on to trade 0.1 percent lower after the bank said it would cut thousands of staff in a revamp of its investment bank.

Deutsche Bank’s shares are down around 31 percent so far this year.

UK stocks were among the top gainers on the STOXX 600.

Industrial distribution firm Electrocomponents (ECM.L) jumped 9.7 percent after reporting double-digit growth in annual revenue and profit, while food ingredients firm Tate & Lyle (TATE.L) rose nearly 7 percent after posting higher annual profits.

Global stocks and currencies rebound with risk appetite creeping back

Global Stock Markets

A degree of risk appetite returned to global markets on Tuesday, with developing-nation stocks and currencies rebounding and the euro climbing with Italian bonds. The dollar fell as Treasury yields climbed, and the pound advanced.

U.S. equity futures pointed to a higher open and the Stoxx Europe 600 Index nudged upward after the MSCI Asia Pacific gauge eked out a gain in a mixed session earlier. Emerging stocks were the stand out, ending a three-day losing streak.

The euro swung from a loss to a gain as investors weigh the chances Italy’s president will seek to curtail a potential populist government, while the country’s bonds rebounded from a two-day slide. The Turkish lira fell to yet another record low. Sterling strengthened amid speculation there could be another U.K. election and after upbeat comments from a Bank of England policymaker.

Easing trade tension between the world’s two biggest economies -- China confirmed a cut to the import duty on passenger cars on Tuesday -- has helped restore some confidence in emerging-market assets, though Italy’s political situation continues to loom over global markets. President Sergio Mattarella is reportedly preparing to pick a premier on Wednesday or Thursday. Beyond politics, central banks are in focus this week -- the Federal Reserve will release minutes of its latest policy meeting on Wednesday, while the ECB follows suit on Thursday. A raft of U.S. debt sales adds to the busy agenda.

Elsewhere, the South African rand and Russian ruble headed higher. Hong Kong and South Korean markets were shut for a holiday. Most commodities, including oil, advanced as the greenback weakened.

Stocks

The Stoxx Europe 600 Index rose 0.1 percent as of 12:17 p.m. London time.
Futures on the S&P 500 Index rose 0.2 percent.
The U.K.’s FTSE 100 Index rose 0.2 percent.
Germany’s DAX Index rose 0.4 percent.
The MSCI Emerging Market Index gained 0.5 percent, the largest rise in more than a week.
The MSCI Asia Pacific Index climbed 0.1 percent.

Currencies
The euro increased 0.2 percent to $1.1809, the strongest in a week.
The British pound gained 0.2 percent to $1.3452.
The Japanese yen increased 0.1 percent to 110.98 per
The Turkish lira sank 0.8 percent to 4.6112 per dollar, the weakest on record.

Bonds
The yield on 10-year Treasuries climbed two basis points to 3.08 percent.
Germany’s 10-year yield gained four basis points to 0.56 percent.
Britain’s 10-year yield gained four basis points to 1.518 percent.
Italy’s 10-year yield sank nine basis points to 2.298 percent, the largest tumble in almost seven months.

Commodities
West Texas Intermediate crude increased 0.2 percent to $72.42 a barrel, the highest in more than three years.
Gold rose 0.1 percent to $1,294.36 an ounce.

European shares climbs to highest since February as Italy recovers

European Stock Markets

European shares touched their highest level since the start of February on Tuesday as autos and bank stocks climbed, and Italian shares recovered as the anti-establishment coalition’s government formation process stalled. 

The pan-European STOXX 600 rose 0.2 percent, extending Monday's gains as carmakers rose on a cut to Chinese tariffs. Italy's FTSE MIB .FTMIB gained 0.7 percent.

Volkswagen (VOWG_p.DE), BMW (BMWG.DE) and Daimler (DAIGn.DE) were among the biggest boosts to the STOXX, up 1 to 1.6 percent, after China said it would cut the import duty on passenger cars and auto parts from July 1.

Europe’s autos sector .SXAP climbed 0.7 percent and Italy’s Fiat Chrysler (FCHA.MI) also rose 1.3 percent, helping the Italian index gain 0.6 percent.

Italian bank stocks .FTIT8300 recovered as the anti-establishment 5Star and League parties’ government plans stalled. President Sergio Mattarella sought further consultations over their proposed prime minister, a political novice. [nL5N1SS1DE]

Some investors were doubtful a coalition government would be able to go ahead with their big spending plans that have spooked markets, sending Italian bond yields to their highest in more than a year.

Competitive pressures, and hopes of dealmaking, triggered strong single-stock and sector-wide moves.

Inmarsat (ISA.L) shares dropped 8.4 percent to the bottom of the STOXX after the International Maritime Organisation authorised competitor Iridium (IRDM.O) to provide maritime safety systems, threatening Inmarsat’s monopoly in maritime distress communications.

French telecoms stocks Bouygues (BOUY.PA), Orange (ORAN.PA) and Iliad (ILD.PA) all rose after the head of the country’s telecoms regulator reignited talk of possible mergers in the sector, in comments to Le Monde newspaper.

Altice (ATCA.AS) shares also rose on investors’ hopes for M&A, and as the stock readjusted to the separation of Altice USA from Altice NV. The telecoms sector rose 0.8 percent overall.

Banks HSBC (HSBA.L), Santander (SAN.MC), BNP Paribas (BNPP.PA) and UBS (UBSG.S) were also among top drivers, benefiting from the recent rise in bond yields.

Swiss industrial machinery firm Georg Fischer (FIN.S) jumped 7.7 percent after UBS upgraded the stock to a “buy”, saying the market is underestimating the company’s margins and earnings potential, helped by its diversification in different industrial products.

Overall Europe’s earnings performance has been relatively disappointing, particularly compared with a stellar quarter in the U.S.. Bank of America Merrill Lynch said the ratio of STOXX 600 companies beating earnings targets this quarter was the worst since 2013.

European stocks set to win longest weekly winning streak in 3 years

European Stock Markets

European stocks were set to achieve their longest weekly winning streak for more than three years on Friday as M&A activity added to an advance on the back of a busy earnings season.

Shares traded in a narrow range, with the pan-European STOXX 600 index down 0.1 percent by 1010 GMT, still on course for its seventh straight week of gains and the longest winning streak since March 2015. Germany's DAX .GDAXI fell 0.4 percent while Britain's FTSE 100 .FTSE was flat in percentage terms.

Though moves at the index level were muted, shares in Sika (SIK.S) soared 8.7 percent to the top of the STOXX after the Swiss chemicals company reached an agreement with French building materials firm Saint-Gobain (SGOB.PA) to end a long-standing legal dispute.

Saint-Gobain, whose shares rose 2.8 percent, is to take a large stake in Sika, but not majority control.

Shares in Daily Mail and General Trust (DMGT) (DMGOa.L) rose 2.3 percent, having jumped as much as 9.4 percent, after U.S.-based private equity firm Silver Lake Management Company agreed to buy ZPG (ZPG.L), the owner of British property websites Zoopla and PrimeLocation, for 2.2 billion pounds.

DMGT is the biggest shareholder in ZPG, whose shares rocketed about 30 percent to a record high. Shares in fellow British classifieds websites Rightmove (RMV.L) rose 6.5 percent and Auto Trader (AUTOA.L) rallied 4.1 percent.

While the first quarter earnings season was winding down in Europe, basic resources .SXPP was the best-performing sector after shares in ArcelorMittal (MT.AS) rose 2.2 percent. The world’s biggest steelmaker beat earnings forecasts and gave an upbeat outlook for 2018.

So far blended year-on-year earnings growth for the first quarter has come in at 16 percent for MSCI EMU, in dollar terms, compared with 26 percent for the S&P 500, according to Thomson Reuters I/B/E/S.

Outside of the STOXX, earnings updates boosted shares in Italian banks. Monte dei Paschi (BMPS.MI) jumped 11 percent after the bank swung to a profit in the first quarter thanks to lower costs and loan losses, while UBI Banca (UBI.MI) gained 1.2 percent after its results.

While the Italian banking sector .FTIT8300 has been under pressure recently on the back of political jitters, the sector is up more than 13 percent this year while Italy's benchmark FTSE MIB .FTMIB has risen 10 percent.

European edges fifth week of gains as tech stocks buoy

European Stock Markets

Well-received results from Spanish banks and a recovery among tech stocks buoyed European shares in early trading on Friday, setting them up for their fifth week of gains in a row. 

The pan-European STOXX 600 index was up 0.1 percent by 0903 GMT and on track for its longest winning streak in terms of weekly gains since last September, while Germany's DAX .GDAXI rose 0.7 percent.

This week banks have been a key focus, with results from Spain’s BBVA (BBVA.MC) and Caixabank (CABK.MC) sending their shares 2 percent and 0.5 percent higher. Both lenders beat profit forecasts thanks to strength in their overseas markets.

However, Britain’s RBS (RBS.L) was a laggard, reversing early gains to trade 2 percent lower after a concerns over a pending fine from the U.S. Department of Justice eclipsed its first-quarter update.

RBS was among the biggest fallers on the European banking index .SX7P, which declined 0.5 percent.

Elsewhere industrials performed well as shares in St Gobain (SGOB.PA) popped 3 percent higher after the French construction materials group confirmed its 2018 financial outlook.

Satellite firm SES (SESFd.PA) was the biggest gainer, up more than 10 percent after beating first-quarter expectations on the back of strong growth in its networks division.

However, Electrolux (ELUXb.ST) fell the most on the STOXX, its shares down 11 percent on a surprise drop in first-quarter core operating profit and a warning on raw material costs.

The earnings season has taken the focus from broader issues such as global trade and geopolitics, which rattled markets in March, while concerns over rising bond yields have also been put on the back burner for now.

So far around a quarter of companies in the MSCI EMU index have given first quarter updates. Nearly 60 percent have either beat or met analyst expectations, according to Thomson Reuters I/B/E/S data. Earnings growth is clocking in at over 15 percent for the quarter, in dollar terms.

Tech stocks also helped fuel gains as the sector .SX8P continued to recover from recent negative sentiment, following well-received results from tech giant Facebook (FB.O), Amazon (AMZN.O), Microsoft (MSFT.O) and U.S. chipmakers.

World stocks near four-week highs, Morgan Stanley shines

Global Stock Markets

Global stocks climbed to a near four-week high and Wall Street geared up for a strong open on Wednesday as powerful U.S. first-quarter earnings, notably from Morgan Stanley, helped revive risk appetite. 

MSCI’s index of world stocks was up 0.3 percent at 1203 GMT, while the top index of euro zone stocks rose 0.3 percent, having touched its highest since Feb. 5, when a spike in volatility amplified a sell-off in global equity markets.

S&P 500 futures sparked higher, rising 0.4 percent by 1203 GMT as investors digested the latest batch of U.S. results with Morgan Stanley shining.

The bank’s shares climbed in pre-market trading after a record jump in quarterly profits, up 40 percent thanks to a strong trading boost..

It kept the pace set by Goldman Sachs which reported a surge in profits on Tuesday, also driven by a sharp increase in trading as market volatility rose.

Analysts have downgraded their European earnings estimates ahead of the first-quarter results season, while U.S. companies are expected to deliver stellar results.

Investors were watching Europe’s earnings season for signs of strain from a stronger euro, with Continental providing an early indication the currency’s rise was hurting exporters.

The tyre maker fell 4.3 percent, driving a pullback in Germany’s DAX, after a negative hit to earnings from exchange rates forced it to lower its outlook.

But a fall in the S&P 500 volatility gauge reflected investors’ renewed confidence in the resilience of equity markets. The VIX edged down, near a six-week low.

Britain’s FTSE 100 stood out with much stronger gains. It was up 0.9 percent after an unexpected fall in British inflation to a one-year low dented the pound — good news for its high percentage of overseas revenue earners.

While investors were refocusing on fundamentals after weeks dominated by geopolitical tensions, the latest Bank of America Merrill Lynch (BAML) survey of fund managers showed signs of caution.
Investors cut their equity allocation to an 18-month low and increased their cash balances.

Fund managers named the threat of trade war as the biggest “tail risk” in BAML’s survey, while they were less concerned about inflation causing convulsions in bond markets.

Monetary tightening, proceeding at a different pace on either side of the Atlantic, was making its mark on bond markets.

The gap between U.S. and German two-year bonds reached its widest in nearly 30 years, reflecting the diverging monetary policy outlook.

The U.S. yield curve - the gap between U.S. 2-year and 10-year government bond yields — flattened back slightly, having fallen to a low of 41.8 basis points overnight.

The rise in short-dated yields has pushed the real yield on U.S. two-year Treasuries above the S&P 500 dividend yield for the first time in 10 years.

Currency market movements, outside of a sliding sterling, were restrained.

The euro was stuck at $1.2362, after topping out at $1.2413 overnight, while the dollar index hovered at 89.5.

The yen pulled back to 107.23 against the dollar, pushed down by signs of progress in talks between South and North Korea.

Strong metals prices, boosted by supply concerns after U.S. sanctions on Russian aluminum giant Rusal, helped send Europe’s basic resources stocks surging 2.1 percent.

Oil prices also continued their relentless rise.

Brent crude futures were up 86 cents at $72.44 a barrel, while U.S. crude rose 95 cents to $67.48 a barrel

Asian shares edge higher in step with Wall Street, China lags

Asian Stock Markets

Asian shares crept ahead on Wednesday after Wall Street took heart from upbeat corporate earnings, though nagging concerns about trade barriers and the global growth outlook kept currencies and bonds subdued. 

Chinese markets struggled even as Beijing boosted liquidity in the banking system. Shanghai blue chips hit an eight-month low before recouping losses. [.SS]

Late Tuesday, the PBOC unexpectedly announced it would cut the cash banks must hold as reserves in a move that frees up lending for small firms but falls short of a broad monetary easing.

Mainland Chinese shares buckled after the United States banned American companies from selling components to Chinese telecom equipment maker ZTE Corp.

MSCI’s broadest index of Asia-Pacific shares outside Japan bounced 0.5 percent, though that followed four straight sessions of losses.

Japan’s Nikkei climbed 1.2 percent, with investors waiting for any developments on trade as Japanese Prime Minister Shinzo Abe meets President Donald Trump at his Mar-a-Lago resort.

European shares are seen rising, with spread-betters expecting 0.2-0.3 percent gains in Britain’s FTSE, France’s Cac and Germany’s Dax.

E-Mini futures for the S&P 500 gained 0.1 percent after robust earnings from Netflix, Goldman Sachs and healthcare companies fuelled optimism about what is expected to be the strongest earnings season in seven years.

Profits at the 48 S&P500 companies that have announced earnings so far have risen 28.7 percent in the first quarter from a year earlier, said Mutsumi Kagawa, chief global strategist at Rakuten Securities in Tokyo.

The Dow ended Tuesday up 0.88 percent, while the S&P 500 rose 1.06 percent and the Nasdaq 1.78 percent. [.N]

Yet there were signs of caution in the latest BofA Merrill Lynch survey of fund mangers which found investors squirreling more funds away into cash, while cutting their equity allocation to an 18-month low.

The outlook for the global economy also darkened with just a net 5 percent of fund managers expecting stronger growth in the next 12 months - the lowest since the United Kingdom voted to leave the EU in June 2016.

While the IMF left its global growth forecasts unchanged for 2018 and 2019 on Tuesday, it judged medium-term risks were to the downside - citing financial vulnerabilities, geopolitical strains and tariffs.

“We ultimately believe that we will see a negotiated solution, but there is still a long way to go and further bouts of volatility and headline risk seem assured.”

Worries about the longevity of the U.S. economic expansion were one reason the Treasury curve was at its flattest in a decade and why some interest-rate curves were starting to price in rate cuts for 2020.

The air of uncertainty was keeping currencies restrained.

The euro was stuck at $1.2370, after topping out at $1.2413 overnight, while the dollar index was barely moved at 89.538. [USD/]

The dollar did nudge modestly higher on the yen to 107.25, helped by signs of progress in U.S. talks with North Korea.

U.S. Secretary of State nominee and CIA Director Mike Pompeo secretly visited North Korea and met with North Korean leader Kim Jong Un to discuss a planned summit with President Trump.
In commodity markets, gold was a fraction easier at $1,344.11 an ounce.

Oil prices firmed with Brent crude futures up 32 cents to $71.90 a barrel, while U.S. crude rose 33 cents to $66.85 a barrel. [O/R]

Dissipating trade fears boost European shares further

European Stock Markets

European shares inched up to new one-month highs on Friday as trade tensions showed signs of easing, while results disappointments drove some sharp moves. 

The STOXX 600 rose 0.2 percent while Germany’s DAX, which is highly sensitive to trade and China, gained 0.5 percent after U.S. President Trump made comments indicating he would want to avoid a Sino-U.S. trade war and rejoin the Trans-Pacific Partnership (TPP) trade pact.

“Markets have given cautious welcome to this news. Welcome, because avoiding a trade war is a clear economic positive. Cautious, because market trust in U.S. presidential announcements is, perhaps, a little limited,” said UBS Wealth Management chief economist Paul Donovan.

The index was on track for its third straight week of gains, its longest winning streak since January.
Investors have begun to shrug off geopolitical concerns to focus instead on a results season expected to support equity markets.

The beginnings of European companies’ first-quarter results were largely positive, though misses were badly punished.

Shares in British software firm Sage sank 19 percent, the biggest decline on the STOXX, after the company cut its full-year revenue guidance as software subscription growth slowed in the first half.

On the other hand, Finnish paper maker Stora Enso gained 3.7 percent after reporting stronger than expected first-quarter results.

Cosmetics giant L’Oreal reported a strong sales beat thanks to good performance from China and luxury cosmetics.

“L’Oreal reported a much stronger-than-expected start to the year as first-quarter like-for-like sales growth of +6.8 percent came in well ahead of DB and consensus (forecasts), undoubtedly making L’Oreal best-in-class among its European HPC (and staples) peers,” wrote Deutsche Bank analysts.

But the shares came back after touching a five-month high in early deals, last trading up just 0.5 percent. Traders put the muted reaction down to technical selling and profit-taking.

M&A news continued to be a key driver.

Klepierre shares rose 2.2 percent after the commercial real estate firm said it had dropped a bid for Hammerson and would not pursue a takeover of the UK firm.

“Klepierre throws in the towel,” wrote Stifel analysts, adding they do not see a different potential bidder for Hammerson.

Hammerson’s shares meanwhile dropped 13 percent to trade at 452.7 pence, erasing nearly all the gains the stock had made after Klepierre’s first takeover bid on March 19.

Micro Focus rose 5.4 percent to the top of the STOXX, its second day of strong gains after reports Elliott Management had taken a stake in the firm.

Elsewhere Galapagos rose 4.2 percent after the biotech firm said its Idiopathic Pulmonary Fibrosis drug was moving into phase III trials.

Overall mining and industrial stocks were the best-performing, enjoying a boost from metals prices which surged higher this week after sanctions on Russian aluminum firm Rusal.

European shares led higher by Bayer, luxury stocks

European Stock markets

European shares rose on Tuesday, led higher by gains in Bayer after a report that the U.S. approved its takeover of Monsanto, while a solid update from LVMH lifted luxury sector stocks. 

A speech by Chinese President Xi Jinping calmed investor jitters over an escalating U.S.-China trade row, helping send the pan-European STOXX 600 benchmark up 0.7 percent by 0716 GMT.

Xi promised to cut import tariffs on products including cars, buoying sentiment in the sector and lifting the auto index .SXAP up 2 percent with Daimler (DAIGn.DE) up 2.3 percent.

Bayer (BAYGn.DE) rose 4.3 percent and was among the top gainers after the Wall Street Journal reported that the U.S. Justice Department will allow the German drugs and pesticides group to acquire Monsanto Co (MON.N) in a $62.5 billion (44.22 billion pounds) deal.

LVMH (LVMH.PA) rose 5 percent to record highs after the Louis Vuitton owner posted better-than-expected sales growth in the first quarter, helped by thriving Chinese appetite for luxury goods.

 Its solid update boosted shares in other luxury companies such as Kering (PRTP.PA), up 3.7 percent.

Higher-than-expected quarterly revenues lifted TGS Nopec (TGS.OL) up 11.4 percent to lead gainers on the STOXX.

Among other country benchmarks, the FTSE was up 0.5 percent and the exporter-heavy DAX index surged 1.3 percent.

European shares struggle as as focus turns to jobs data

European Stock Markets

A lull settled over European stocks before key jobs data in the U.S., where announcements of exceptions to import tariffs and talks with North Korea have traders weighing the outlook for a range of assets. The dollar was steady and Treasuries edged lower.

 

The Stoxx Europe 600 Index was little changed along with U.S. equity-index futures, capping a week in which shares globally were roiled by President Donald Trump’s protectionist trade agenda.

The announcement that Trump has accepted an invitation to meet North Korean leader Kim Jong Un fed risk-on sentiment in Asia as it helped ease geopolitical concerns tied to the nuclear-armed dictatorship. 

 

The summit news overshadowed a warning from China that it will take “strong” measures to counter U.S. trade tariffs. Investors will now look to monthly U.S. employment data for the next signal on the direction of asset markets as the Fed prepares to review interest rates later this month.

Elsewhere, Mexico’s peso and Canada’s loonie strengthened on news the two countries will be exempted from the U.S. tariffs. Bitcoin fell below $9,000.
 

Stocks
The Stoxx Europe 600 Index decreased 0.1 percent as of 10:29 a.m. London time, the first retreat in a week.
Futures on the S&P 500 Index sank 0.1 percent.
The U.K.’s FTSE 100 Index declined less than 0.05 percent.
Germany’s DAX Index dipped 0.4 percent.
The MSCI Asia Pacific Index rose 0.3 percent.
Japan’s Topix index added 0.3 percent, Hong Kong’s Hang Seng jumped 1.1 percent, South Korea’s Kospi rallied 1.1 percent and Australia’s S&P/ASX 200 Index rose 0.3 percent.

Currencies
The euro decreased 0.1 percent to $1.2303.
The British pound gained less than 0.05 percent to $1.3814.
The Japanese yen sank 0.5 percent to 106.73 per dollar, the biggest dip in more than two weeks.

Bonds
The yield on 10-year Treasuries gained two basis points to 2.88 percent, the biggest gain in a week.
Germany’s 10-year yield advanced two basis points to 0.63 percent.
Britain’s 10-year yield jumped three basis points to 1.47 percent, the biggest surge in more than a week.
Japan’s 10-year yield declined less than one basis point to 0.05 percent.

Commodities
West Texas Intermediate crude climbed 0.5 percent to $60.41 a barrel.
Gold fell 0.2 percent to $1,319.71 an ounce, the weakest in more than a week.
LME copper gained 0.1 percent to $6,839.50 per metric ton.

European shares open lower; Wall Street futures negative

European Stock Markets

European shares opened lower on Wednesday after the resignation of Donald Trump’s economic adviser Gary Cohn, seen as a bulwark against protectionist forces within the U.S. government.

At 0857 GMT, the pan-European STOXX 600 index was down 0.4 percent while Wall Street futures were trading in negative territory.

Most European markets and sectors were down, with Germany's DAX .GDAXI losing 0.5 percent.

German carmakers, which are expected to suffer from new U.S. tariffs, took a hit. Volkswagen (VOWG_p.DE) lost 1.6 percent and Daimler (DAIGn.DE) 1.3 percent, the second and third worst performance of the German blue chip index.

Still in Germany, postal and logistics group Deutsche Post DHL (DPWGn.DE) was down 2.1 percent after reporting 2017 results.

Oil prices fell and London metals slipped, weighing on the energy .SXEP and basic materials .SXPP sectors, which were down 1.4 percent and 0.8 percent respectively.

The advertising sector retreated after the Financial Times said P&G (PG.N) would cut agency spending by 1.25 billion dollars over three years. France’s Publicis (PUBP.PA) and Britain’s WPP (WPP.L) fell 1.9 percent and 1.6 percent respectively.

British plane engine maker Rolls-Royce (RR.L) was the best Stoxx index performer, surging 8.5 percent after saying it remained on track to meet its financial goals for 2020.

Second came Smurfit Kappa (SKG.I), after U.S. peer International Paper (IP.N) revealed the takeover offer it made for Europe’s largest paper packaging producer was worth 8 billion euros.

Shares in ADP (ADP.PA) came in third, up 2.3 percent, after a media report said the government would go ahead with plans to privatise French airport operator ADP and sell its 50.6 percent stake entirely.

French construction group Vinci (SGEF.PA), which has an 8 percent stake in ADP and expressed an interest for acquiring more, rose 0.4 percent.

Shares recover as Trump tariff plan faces resistance

Global Stock Markets

Share markets in Asia and Europe regained ground on Tuesday after U.S. President Donald Trump faced growing pressure from political allies to pull back from proposed steel and aluminum tariffs and a potential global trade war. 

European sentiment was also supported after Germany reformed its coalition government to end more than five months in political limbo and as initial unease caused by a hefty election vote for anti-establishment parties in Italy began to ebb. 

Italian bonds gained and shares bounced almost 1 percent having slipped to a six-month low after the weekend vote. 

Europe’s big three - Britain’s FTSE, Germany’s Dax and France’s Cac - were up 0.5-1 percent too, with euro a fraction higher and the pound a touch weaker as the dollar steadied. [/FRX] 

Top U.S. Republican politicians, including House speaker Paul Ryan, urged Trump on Monday not to go ahead with tariffs on foreign imports of steel and aluminum. 

Even though the president said he would not back down, he suggested Canada and Mexico could be exempted if a new NAFTA trade deal was agreed. There was speculation that this had been the main motivation behind the plan

After Wall Street’s S&P 500 had put on more than 1 percent, Asia’s bourses rallied in concert overnight. 

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.5 percent, snapping five straight days of losses. Japan’s Nikkei jumped 1.8 percent from a five-month low, helped too by reassurances from the head of the Bank of Japan that it would not suddenly end stimulus. 

Korean shares also erased the remainder of the hit they took after Trump’s tariff warnings last week. The country is seen as being among the most exposed in Asia due to the large amount of steel it exports to the United States. 

The threat of a trade war is not the only source of tension for the world’s financial markets. 

As the global economy steams ahead, investors have become increasingly concerned that U.S. inflation, which has been subdued since the 2008 financial crisis, could finally pick up and lead to fast interest rate hikes. 

The European Central Bank meets this week and looks almost certain later this year to end its three-year-old, 2.5 trillion euro ($3.08 trillion) stimulus program. 

U.S. 10-year bond yields had reared back up to 2.8888 percent on Monday and most euro zone yields - with the exception of those in Italy - were following suit with German Bunds off a five-week low at 0.65 percent. 

The euro traded at $1.2340, having extend its recovery from a seven-week low of $1.2154. 

In Italy, where currency traders are keeping an eye on post-election developments as none of the three main factions has emerged with enough seats to govern alone, the country’s President, Sergio Mattarella, is expected to open formal coalition talks in April. 

Early elections are possible if no coalition accord is found. 

The Canadian dollar was stuck near an eight month low at C$1.2995. 

In commodities, crude prices held firm, underpinned by robust demand forecasts and prospects for informal contacts sought by OPEC with U.S. shale oil producers at an industry meeting in Houston this week. 

U.S. West Texas Intermediate crude futures traded at $62.69 per barrel, up 0.2 percent following a 2.2 percent gain on Monday. Bellwether industrial metal copper gained 1 percent in its biggest jump in almost a month. 

China’s government said on Monday it was confident about keeping its growth rate at around 6.5 percent this year and on Tuesday defended a move to hike military spending by the biggest amount in three years.

European shares bounced off six-months lows: paper & auto stocks soar

European Stock Markets

European shares bounced off six-months lows on Tuesday as the focus shifted from politics to dealmaking and earnings, with paper and packaging stocks soaring after Smurfit Kappa rejected a bid approach. 

Telecom Italia (TLIT.MI) jumped 5 percent after Bloomberg reported that activist investor Elliott Management was building a stake, in a move to challenge the way top shareholder Vivendi (VIV.PA) is managing the company.

The pan-European STOXX 600 index was up 0.6 percent in early deals, while Italy's benchmark .FTMIB recouped all of its losses from the previous session, up 1 percent, as concerns over political uncertainty following an inconclusive election result eased.

Germany's DAX .GDAXI was particularly buoyant, rising more than 1 percent, led higher by autos stocks Volkswagen (VOWG_p.DE), Daimler (DAIGn.DE) and BMW (BMWG.DE) which have been hit by concerns over an imminent trade war after U.S. President Donald Trump proposed imposing tariffs on steel and aluminum.

Those worries have dissipated slightly as Trump faces a growing pushback from political and diplomatic allies as well as U.S. companies.

European autos .SXAP were the best-performing sector on the day, up 1.4 percent and putting the industry back into positive territory for the year, along with tech stocks .SX8P.

Paper and packaging maker Smurfit Kappa (SKG.I) jumped 18 percent after rejecting an approach from International Paper (IP.N). Peers DS Smith (SMDS.L) and Mondi (MNDI.L) both rose more than 5 percent.

Earnings weighed on Just Eat (JE.L), however, which dropped more than 12 percent and was on track for its worst day on record after saying that a planned increase in spending in 2018 would hit core earnings.

European shares down to six-month lows

European Stock Markets

European shares fell to six-month lows on Friday after Donald Trump said the United States would impose tariffs on imported steel and aluminium, prompting worries about a global trade war. 

Such concerns sparked a broad sell-off in Europe, weighing particularly on the export-oriented German DAX index, which fell 2.3 percent to a six-month low. 

The broader pan-European STOXX 600 benchmark was down 2.1 percent, surpassing a low hit in early February during a brutal sell-off in global equities, also hitting a six-month low. 

Trump said duties of 25 percent on steel and 10 percent on aluminium would be formally announced next week, sparking concerns about retaliatory moves from major trade partners such as China, Europe and neighbouring Canada. 

All sectors were trading in negative territory, with autos .SXAP down 2.3 percent, weighed down by a near-6 percent slump in Italian-American car maker Fiat Chrysler (FCHA.MI) on concerns that the U.S. tariff move could increase its raw material costs.

Elsewhere, Germany’s Volkswagen (VOWG_p.DE), Daimler (DAIGn.DE) and BMW (BMWG.DE) and France’s Peugeot (PEUP.PA) fell between 1.6 to 2.4 percent.

Steel and aluminium stocks were also generally lower, with ArcelorMittal (MT.AS), Salzgitter (SZGG.DE) and Norsk Hydro (NHY.OL) all down 0.9 to 5.2 percent.

Trump officially has until April 11 to announce his final decision and an analyst at Jefferies said they expected the final policy to be more nuanced due to a mounting pushback from domestic steel consumers and foreign steel suppliers.

They said it still remained unclear which countries and products would be targeted by the measures.

Swedish radiation therapy equipment maker Elekta (EKTAb.ST), up 13.2 percent, led gainers on the STOXX after it reported above-forecast earnings, while IMI (IMI.L) dropped 8.5 percent as its trading update disappointed.

The STOXX ended the week down 3.7 percent ahead of events this Sunday in Italy and Germany that could raise new jitters over the political future of Europe, as Brexit talks with the UK continue.

Italy is holding a general election, and Germany’s SPD party will announce the result of a member’s poll on a deal to renew a“grand coalition” government with Angela Merkel’s conservatives following an inconclusive election last year.

So far this year Italy's benchmark index .FTMIB has managed just a 0.3 percent gain, while Germany's DAX is down 7.8 percent.

European shares slide to two-week lows

European Share Markets

European shares fell to new two-week lows on Friday after Donald Trump said the United States would impose tariffs on imported steel and aluminium, prompting worries over a global trade war.

Such concerns sparked a broad sell off in Europe, sending the pan-regional STOXX 600 index down 0.7 percent by 0825 GMT.

Germany’s DAX fell 1.1 percent and Britain’s FTSE dropped 0.3 percent.

All sectors were trading in negative territory, with autos leading the drop and weighed down by a 3.7 percent slump in Fiat Chrysler shares on concerns that the U.S. tariff move could increase raw material costs. 

Steel and aluminium stocks were also generally lower with ArcelorMittal, Salzgitter and Norsk Hydro all down around 2 percent. 

Steel pipes maker Tenaris, which has production and marketing facilities in the United States, however, rose around 0.6 percent. 

Precious metal miners outperformed as investors sought refuge in safe-haves assets such as gold following Trump’s announcement. 

Randgold, Centamin and Polymetal all rose more than 1.7 percent. 

Swedish radiation therapy equipment maker Elekta, up 9.9 percent, led gainers on the STOXX after it reported above-forecast earnings, while IMI dropped 7.5 percent as its trading update disappointed.

The STOXX was on track to end the week, already marked by worries over faster rate hikes in the United States, down more than 2 percent.

European stocks head for loss for the third consecutive day

European Stock Markets

Stocks across Europe headed for a third straight loss Thursday, hurt by a batch of corporate earnings reports that left investors unimpressed. 

 Investors are also focused on Federal Reserve Chairman Jerome Powell, who may drop further hints about U.S. interest-rate policy.

The Stoxx Europe 600 index SXXP, -0.88% slumped 0.9% to 376.13 and no sector traded higher. On Wednesday, the pan-European benchmark fell 0.7%, and marked a 4% pullback for February.

Germany’s DAX 30 index DAX, -1.38% tumbled 1.4% to 12,261.73, and France’s CAC 40 PX1, -0.98% fell 1% to 5,265.44.

The U.K.’s FTSE 100 UKX, -0.49% shed 0.5% to 7,194.88, and Italy’s FTSE MIB I945, -0.83%  was down 0.9% at 22,409.63. Italy will hold a general election on Sunday. 

European investors came into Thursday’s session seeing that there was yet another turn lower on Wall Street in the previous session. That left the S&P 500 Index SPX, -1.11% and the Dow Jones Industrial Average  DJIA, -1.50%  each down more than 1% when trading closed Wednesday.

Stocks globally have struggled since Tuesday, when Fed chief Powell told American lawmakers the U.S. economic outlook has strengthened since December. Investors saw that as a sign the Fed could raise interest rates four times this year, instead of three times as it has previously signaled.

Powell returns to Capitol Hill Thursday to testify before the Senate Banking Committee at 10 a.m. Eastern Time, or 3 p.m. London time. Investors worldwide watch U.S. Treasury yields and Fed rate policy, as higher American interest rates tend to drive financial markets globally and as many companies do business in the word’s largest economy.

WPP PLC shares WPP, -13.49% WPP, -12.88%  tumbled 14% — their worst session since 1998 according to FactSet data — after the world’s largest advertising group forecast flat full-year sales growth for 2018.

Carrefour SA CA, -6.20%  shares sank 8.3% as the supermarket chain operator late Wednesday said it’s cutting its dividend and that it swung to a 2017 net loss of €531 million ($652.7 million), largely because of non-recurring charges.

Beiersdorf AG BEI, -3.22%  dropped 4.3% after the German skin care company said full-year 2017 net profit fell to €689 million ($841.6 million), due to one-off gains in 2016 as well as negative exchange-rate effects and losses from financial investments.

Topping to Stoxx 600, shares of Cobham PLC COB, +10.53%   rallied 14% as the British aerospace-and-defense equipment supplier swung to 2017 pretax profit of £66.9 million ($92.6 million). 

European Stocks Slide After Powell; Dollar Steady With Oil

European Stock Markets

Shares in Europe fell as disappointing Chinese data added to a perceived hawkish tilt in U.S. Federal Reserve policy that weighed on equities in Asia. Benchmark Treasury yields held near a four-year high and the dollar was steady after Tuesday’s jump.

Miners led a decline in the Stoxx Europe 600 gauge after lower-than-expected Chinese manufacturing data. The MSCI Asia Pacific Index dropped along with most national benchmarks in the region as Fed Chairman Jerome Powell’s upbeat assessment of the world’s biggest economy continued to reverberate through global markets. S&P 500 index futures edged higher, however, signaling a respite when U.S. markets open. The euro pared a decline, while German bunds held steady as inflation in the region slowed in line with estimates.

Investors’ focus now shifts to U.S. GDP data due Wednesday after Powell opened the door to four Fed rate increases this year, saying his personal outlook for the economy had strengthened. U.S. and European bond yields have soared in recent months amid speculation that the Fed’s monetary policy will be tightened at a faster pace, but for equity investors, that’s testing nerves. Global stocks are poised for their worst month since January 2016 after years of central-bank stimulus push up valuations.


Elsewhere, crude oil was little changed as the International Energy Agency warned about seemingly unstoppable U.S. shale production. Sterling added to yesterday’s decline as U.K. Prime Minister Theresa May squared off for a fight with the European Union over a Brexit deal.
 Stocks

    The Stoxx Europe 600 Index fell 0.3 percent as of 10:37 a.m. London time.
    The U.K.’s FTSE 100 Index fell 0.3 percent.
    Germany’s DAX Index dipped 0.2 percent.
    Futures on the S&P 500 Index gained 0.2 percent.
    The MSCI Asia Pacific Index fell 1.1 percent.
    Japan’s Topix index fell 1.2 percent, Hong Kong’s Hang Seng dropped 1.6 percent, South Korea’s Kospi declined 1.2 percent.
    Australia’s S&P/ASX 200 Index declined 0.7 percent.

Currencies

    The Bloomberg Dollar Spot Index declined 0.1 percent.
    The euro dipped less than 0.05 percent to $1.2228, the weakest in almost six weeks.
    The British pound fell 0.2 percent to $1.3882.
    The Japanese yen climbed 0.3 percent to 107.06 per dollar.

Bonds

    The yield on 10-year Treasuries gained one basis point to 2.90 percent.
    Germany’s 10-year yield dipped one basis point to 0.68 percent.
    Britain’s 10-year yield decreased two basis points to 1.561 percent.
    Japan’s 10-year yield rose one basis point to 0.053 percent.

Commodities

    West Texas Intermediate crude increased 0.1 percent to $63.05 a barrel.
    Gold gained 0.2 percent to $1,320.44 an ounce.

European Shares Mixed As Markets Look To FOMC Minutes

European Stock Markets

Firmer oil prices and the dollar recovery ahead of the FOMC meeting minutes coming out tomorrow helped to lift European stocks higher on Tuesday, although U.K stocks fell slightly in view of disappointing earnings updates from the likes of HSBC Holdings and BHP Billiton. 

The pan-European Stoxx Europe 600 index was up 0.10 percent at 378.62 in late opening deals after declining 0.6 percent on Monday.

The German DAX and France's CAC 40 were up around 0.2 percent, while the U.K.'s FTSE 100 was losing 0.4 percent.

Edenred shares jumped more than 7 percent in Paris after the prepaid meal voucher and card provider reported record 2017 earnings and hiked dividend.

Covestro, the company formed by the spin off of Bayer's specialty plastics division, climbed nearly 2 percent after its fourth-quarter net profit increased more-than fourfold.

HeidelbergCement advanced 1.7 percent on reporting a 16 percent rise in Q4 core profit on higher sales.

Software firm Temenos tumbled 6 percent amid reports that it was in advance talks to buy U.K. rival Fidessa Group.

HSBC Holdings dropped over 4 percent after its full-year pre-tax profit, adjusted for one-off items and currency fluctuations, fell short of market forecasts.

Mining heavyweight BHP Billiton tumbled 3.5 percent despite the company reporting strong half-year underlying profit and hiking its interim dividend.

Intercontinental Hotels shares slumped 5 percent after the hotel conglomerate announced a series of new initiatives and said it would not pay out any additional capital to investors in 2018.