European Stocks Struggles on Industrial Data, Wall Street Rebounds
European stocks reported losses in the past two consecutive sessions as Donald Trump has halted stimulus talks and German industrial data fell short of expectations. However, Wall Street soared sharply on Wednesday and extended the trend into Thursday trading.
The rally is backed by Trump’s announcement of offering additional support to the airline industry.
President also said he wants to give $1200 to each individual. The top three major Wall Street indices soared more than 1.5% on Wednesday.
The Federal Reserve Chairman Jerome Powell continues suggesting the federal government provide more stimulus programs to selected businesses to help the economic recovery.
The economic growth concerns are rising due to bad debts and slower demand. “The path ahead will be a difficult climb,” The International Monetary Fund’s Managing Director Kristalina Georgieva said.
Moving back to Europe, the indices are struggling to form an uptrend. This is because of investors’ concerns over the second coronavirus wave that could reverse the economic growth trends.
The latest German industrial production data added to the trader’s concerns. The industrial production number fell to negative 0.2% compared to analysts’ expectations for the growth of 1.5%. Industrial production soared 1.4% year over year in the last month.
Several European countries have restored social distancing policies to avoid the virus spread.
Berlin has introduced stricter closing times for several businesses, while other biggest European cities like Madrid and Paris have seen similar restrictions. They are also imposing restrictions on traveling and tourism.
US oil price bounced back to $40 a barrel level while Brent surged to $42 a barrel, thanks to lower than expected growth in US oil inventories. The gold price is steady below the $1900 level.
US dollar is putting pressure on gold prices. The USD index, which gauges the performance of the greenback against the six major currencies, trades around 93.50.