European Stock Futures Dip on US-China Tensions and Economic Recovery
European stock futures slide on Friday as investor’s concerns increased over economic recovery following the sharp growth in virus infections in the United States. The trade war tensions between the United States and China added to investors’ concerns.
The US authorities claim that China is supporting hackers that are targeting American companies working on coronavirus research. The US has asked China to close its Houston consulate.
The pan-European Stoxx 600 index grew 0.1% on Thursday, while German DAX was flat at the end of the session and the French CAC dropped 0.1%.
Investors have also reacted to higher than the expected jobless claims in the United States. The U.S. Labor Department said on Thursday that initial jobless claims rose to 1.416 million last week, up from the consensus estimate for 1.3 million. This marks the 18th week in a row of more than 1 million new unemployment claims.
On the positive side, consumer confidence increased sharply in Germany. This is because the forward-looking GfK Institute consumer confidence reading surged to negative 0.3 for the next month, up significantly from negative 9.4 in July.
Earnings results also remained mixed. Daimler has generated a loss of 1.68 billion euros for the second quarter but the company expects a rise in profit for its vans division and Mercedes-Benz cars.
Unilever has reported a much lower-than-expected decline in sales. Its second-quarter sales fell 0.3% while analysts were expecting sales to decline by 4.3% this year. Shares of Unilever surged more than 8% after the earnings report.
Roche has generated a net profit decline of 5% for the second quarter. The company blames lower sales and currency headwinds for the drop in earnings.
What Does it Mean?
- European stock futures are in red on Friday.
- US stock futures declined from the previous close.
- Euro outperformed dollar and other currencies.
- Oil prices extend the upside but analysts are showing concerns over demand.