European Stock Futures Higher, Dollar Plunges and Gold Hit a New All-time High
European stock futures rebounded in Wednesday trade after closing mostly lower on Tuesday as poor corporate earnings dented investor’s sentiments.
European stock markets have begun the new month on a positive note amid robust manufacturing data for the month of July from China and European countries.
July’s final IHS Markit manufacturing PMI data represented record manufacturing activity since April 2019. Manufacturing data from the United States has also boosted investor’s sentiments.
The world’s largest spirit maker Diageo has generated a wider than expected loss for the second quarter as its organic sales dropped 8.4% in the first half of the year. The shares of Diageo plunged more than 5% after the earnings release.
The shares of German drugs and pesticides fell 2.4% after the company reported a net loss of 9.5 billion euros for the second quarter. On the positive side, shares of BP soared close to 6% after the company announced new business strategies and halved its dividends.
“August is normally a difficult month for stocks but in the year of COVID no trends are sacred and equities are proving to be very resilient,” said Rony Nehme, the Chief market analyst at Squared Financial.
The trade tensions between the United States and China reduced during the last week as both countries agreed on high-level talks that are likely to hold on August 15.
Asian markets are mixed on Wednesday, with Japanese indices are down amid corporate earnings. Chinese stock markets extended the upside on hopes of economic recovery. Early this week, the country has reported solid manufacturing data for July.
What Does This Mean For Traders?
- Gold surged above $2000 level on Wednesday due to US dollar weaknesses.
- Oil prices soared to the highest level in the last two weeks.
- US stock futures are in green.
- The US dollar fell against the basket of major currencies.
- Australia left interest rates unchanged.