European stock futures failed to sustain the Wednesday upside momentum despite positive stock market growth reports from Asian and American markets.
European stocks ended higher on Wednesday amid positive earnings reports from major companies. In addition, strong manufacturing data and construction activities have been adding to investor’s sentiments since the beginning of this week.
Indeed, the hardest-hit countries like Spain and Italy also recorded a sharp growth in business activities over the past couple of weeks, which is a positive indicator for the European and global economy.
The world’s second-largest economy China has also been showing positive manufacturing and business activities. Caixin/Markit manufacturing Purchasing Managers’ Index (PMI) for China grew to the highest level in the decade in July.
On Wall Street, the major stock market indices rose for a fourth straight day due to optimism over the coronavirus vaccine.
On the other hand, the Gold price soared to a new record level as investors have been rushing towards safe-haven assets due to global economic uncertainty and trade conflict between the two largest countries.
“While the markets continue on a cautious recovery path, the big move for gold through the $2,000 per ounce threshold is a reminder of the lingering fears over coronavirus and geopolitical tensions linked to China,” AJ Bell investment director Russ Mould said.
The earnings data has provided some relief to stock market indices in the past couple of days. The shares of British Petroleum surged more than 6% after earnings release and the stock price of Germany’s second-biggest bank Commerzbank climbed 4.7% after beating analysts’ earnings expectations.
Meanwhile, easing travel restriction has also added to travel stock prices. The shares of European passenger carrier easyJet soared sharply in the last few days on higher summer holidays demand. The shares of British air passenger company IAG grew more than 10% this week.
What Does This Mean for Traders?
- Euro is likely to extend the upside momentum.’
- US dollar weakness will continue on economic worries.
- Gold jumped to a new all-time high.
- Asian markets are mixed with positive business activities and increasing virus infections.