European Stock Futures Steady Ahead of Fed Minutes
European stock market futures are in the green on Wednesday after experiencing a bumpy ride during the Tuesday trade. President Trump has tightened restrictions on Chinese technology giant Huawei in the wake of lowering the company’s access to electronic components markets.
The Stoxx Europe 600 index slipped 0.6% on Tuesday. The share price decline is driven by cyclical sectors including banks and energy. Earnings announcements from major companies also contributed to the Tuesday selloff.
The shares of the miner BHP Group plunged almost 2.6% due to the year over year profit drop of 4%. The company warned that the economic meltdown could significantly hurt commodities demand in the near future.
The share of the Pandora also fumbled close to 7.5% as the Danish jeweler maker guided a sharp revenue drop. On the positive side, the jeweler has reopened all of its stores. The stock price of Marks & Spencer were among the laggards. Its stock price fell 4.9% after it revealed plans to cut a further 7,000 jobs.
“What we’re seeing is some consolidation in European markets given that in the past two months, we’re more or less trading sideways as opposed to the US where growth stocks have been lifting the overall market,” said Matthias Bausch, senior cross-asset strategist at Commerzbank.
“Liquidity is more important than earnings growth at the moment, and we have record-high money supply growth in the US and Europe,” Matthias Bausch added.
On the other hand, the US stock market soared to a record level despite trade war concerns. Tech stocks were among the biggest gainers.
What Does it Mean for Traders?
- US stocks are overvalued in the majority of analysts’ views.
- European stocks have further upside in the days to come.
- US dollar continues to trade around the two years low.
- Euro broke above 1.19 level against the US dollar.