European Stocks Slip With Start of Busy Earnings Season in Focus
European Stocks Slip With Start of Busy Earnings Season in Focus
(Bloomberg) -- European equities ended lower, erasing gains earlier in the session, as investors focused on the start of the jam-packed earnings season.
The Stoxx Europe 600 index was down 0.3% at the close in London, led by health care, chemicals and personal care goods. Reckitt Benckiser Group Plc was down 2% before its scheduled quarterly sales report on Tuesday.
A rebound in European shares has faltered in recent months, partly due to a lack of progress on the U.S. fiscal aid package and concerns about rising Covid-19 cases and the introduction of restrictions in such cities as Paris and London.
The upcoming earnings season may be reassuring for investors, as consensus earnings growth projections “appear quite subdued,” according to JPMorgan Chase & Co. “The bar for positive surprises is undemanding,” strategists including Mislav Matejka wrote in a note.
Market players are also closely watching U.S. fiscal stimulus negotiations as Speaker of the House Nancy Pelosi set a Tuesday deadline for more progress on coronavirus relief funding following discussions with Treasury Secretary Steven Mnuchin.
“On-off fiscal deal headlines ahead of the U.S. election and growing new cases of Covid-19 have heightened uncertainty around the near-term economic and market outlook,” UBS Global Wealth Management Chief Investment Officer Mark Haefele said in emailed comments, “But we recommend investors look through near-term uncertainty and build long-term equity exposure.”
Exchange operator Euronext NV suffered from a technical issue, which halted trading for nearly three hours in all of its markets, including Paris and the Netherlands, with the exception of Oslo. Some Euronext stocks also had unusual share-price swings at the end of trading on Monday.
UBS Group AG and Credit Suisse Group AG shares gained after Barclays raised its price targets for the lenders by 5% and 18%, respectively, and Julius Baer Group Ltd. reported a better-than-expected increase in new money and improving profitability in the third quarter.
The U.K.’s FTSE 100 Index underperformed Monday, falling 0.6% as the pound’s strength weighed on exporters after a report saying British officials are ready to water down controversial Brexit legislation in a move that could revive talks with the European Union.
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