European Equities Stall as Banks Earnings Disappoint
(Bloomberg) -- European shares were little changed on Friday, after uninspiring updates from Deutsche Bank AG and several Spanish lenders captured investors’ attention, given the absence of developments in U.S.-China trade talks. Higher-than-forecast U.S. payroll numbers provided a needed boost.
The Stoxx Europe 600 Index fell 0.3 percent after climbing as much as 0.4 percent in early trading. The financial sector was full of news, with earnings from Deutsche Bank AG and Denmark’s Danske Bank A/S, amid new regulatory scrutiny. The German lender disappointed investors with an eighth consecutive decline in quarterly revenues. European autos & parts stocks were among the biggest gainers after Morgan Stanley upgraded the region’s industry to attractive.
The European gauge was unable to sustain a move above its 100-day moving average, following the best month for the region’s equities in more than three years. U.S. futures pared earlier losses to be little changed after the job data, awaiting updates on trade talks.
“‘Dead cat bounce’ or ‘every correction is a buying opportunity’? That is what all investors are trying to guess, as the bounce from Christmas lows has been very strong,” said Lippo Suominen, chief strategist at Finnish asset manager FIM.
“Earnings season has been good enough to remove the near-term worries of earnings recession,” said Suominen. “However, now quite a bit of hopes have been priced in and investor sentiment has risen. Thus going forward we are again more vulnerable to the news flow, which definitely will not be only positive.”
©2019 Bloomberg L.P.