Dog Days of Summer Are Here as Traders Give Up Acting on Tweets

(Bloomberg) -- As a heatwave takes hold across Europe, the region’s stock traders are heading for the beach.

Market turnover in the region’s equities dropped to the lowest in six months last week as investors gave up trying to predict President Donald Trump’s next tariff threat. European stock volatility also declined, falling to the lowest since June 15, when Trump approved slapping duties on $50 billion of Chinese goods.

Dog Days of Summer Are Here as Traders Give Up Acting on Tweets

“To be honest, it’s the summer and it’s best to just stay on the sidelines and not overreact,” said Max Kettner, a cross-asset strategist at Commerzbank AG, who recommends holding European shares through the end of the summer and rotating into defensives. “People are no longer reacting to Trump’s tweets and threats. Unless there’s a drastic decision on EU tariffs, there won’t be a big movement.”

The Stoxx Europe 600 Index advanced as much as 0.3 percent on Monday despite Trump calling the European Union a “foe” of the U.S., days after a contentious meeting with NATO allies. The index has retreated almost 2 percent over the past month since the U.S. resumed its trade spat comments, with miners and automakers -- the sectors worst hit by the selloff -- losing at least 8 percent.

©2018 Bloomberg L.P.