June 23, 2021

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European Shares Set To Open On Flat Note

2 min read

European stocks look set to open on a flat note Friday as investors react to strong quarterly reports from U.S. tech giants and look ahead to next week’s U.S. presidential election.

There is a glimmer of hope after the European Central Bank committed to take new action in December.

In Washington, Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi blamed each other for the inaction in pushing through the stimulus plan.

Elsewhere in China, the ruling party on Thursday concluded its key annual conclave during which it approved the 14th Five-Year Plan and Vision 2035, a long-term development plan which observers say hints at the continuation of President Xi Jinping in power for the next 15 years.

On the Covid-19 front, the World Health Organization is finally expecting a Covid-19 vaccine by the end of 2020 or early 2021. Both Moderna and Pfizer are expecting late-stage trial results in the coming weeks.

Asian markets remain broadly lower, though the downside remained capped to some extent after Google parent Alphabet, Amazon.com Inc, Apple Inc and Facebook Inc. all posted encouraging quarterly results. Amazon reported a second straight quarter of record profits.

Gold firmed up on dollar weakness after White House chief economic adviser Larry Kudlow said that any deal on coronavirus relief legislation would have to wait for now. Oil prices inched up slightly after falling more than 3 percent on Thursday.

Flash quarterly national accounts, consumer prices and unemployment reports from the euro area are due later in the session, headlining a busy day for the European economic news.

Across the Atlantic, reports on personal income and spending, Chicago-area business activity and consumer sentiment may attract some attention.

U.S. stocks rose overnight as positive jobless claims and GDP data pointed a stronger-than-expected pace of recovery.

Initial jobless claims fell to a seven-month low for the week ending Oct. 24, while GDP grew at a sizzling 33.1 percent annual rate in the third quarter, marking the fastest quarterly increase on record, separate reports showed.

The Dow Jones Industrial Average rose half a percent, the S&P 500 surged 1.2 percent and the tech-heavy Nasdaq Composite climbed 1.6 percent.

European markets gave up early gains to end largely unchanged on Thursday after the European Central Bank hinted at more monetary stimulus.

The pan European Stoxx 600 slipped 0.1 percent. The German DAX edged up 0.3 percent, while France’s CAC 40 index and the U.K.’s FTSE 100 ended on a flat note.

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Market Analysis

2020-10-30 01:28:13

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