European stocks slide as investors wait to hear from Fed’s Powell

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European stocks abandoned gains early Wednesday and headed for a third straight decline, as investors eagerly awaited comments from Federal Reserve Chairman Jerome Powell and the central bank’s economic forecasts expected later in the year. day.
The Stoxx Europe 600 index
SXXP,
-0.36%

slipped 0.1% to 369.31, after rising 0.6% at the start, after falling 1.22% on Tuesday, which marked the largest percentage drop on a day since May 29. The German DAX
DAX,
-0.56%

reversed to fall by 0.3%, after a fall of 1.6%, while the French CAC 40
PX1,
-0.56%

was flat and the FTSE 100 index
UKX,
-0.27%

fell 0.2%.

The euro
EURUSD,
+ 0.41% up 0.1% to $ 1.1356.
Stock futures in the US have become mixed, following Tuesday’s loss of 300 points for industrialists from Dow
DJIA,
-1.08%

and a loss for the S&P 500
SPX,
-0.78%,
if the Nasdaq
COMP,
+ 0.29%

saved another closed record.

Some steam came out of the action rally after the Organization for Economic Co-operation and Development warned that the world economy was “on a tightrope”. The agency predicted a 6% drop in gross domestic product this year, provided a second wave of the virus can be prevented. If the virus returns, before the end of this year, world GDP will drop by 7.6%, the organization predicted.
Increased gloom in the global economy can only deepen the debate among investors over whether stocks have risen too far, too quickly since the March lows caused by the pandemic.
“The perception remains that stocks appear to be a one-way bet, given the support offered by central banks, as well as various tax measures, with all eyes on the conclusion of today’s meeting on interest rates. the Federal Reserve, “said Michael Hewson, chief market analyst at CMC Markets, in a note to clients.
A Fed statement is expected at 2 p.m. Eastern Time (8 p.m. CET), followed by a press conference led by Powell. The central bank, which has provided unprecedented financial support to the markets, is not expected to reveal new support or change its accommodative stance, but will release economic forecasts.
The European Central Bank, meanwhile, has set up a task force to examine the idea of ​​a bad bank to store unpaid euro debt in order to protect commercial banks from any second fallout from the crisis, a reported Reuters.
On the data side, French industrial production plunged in April, while exit prices from China plunged further into deflation in May.
In company news, Inditex
ITX,
+ 2.10%

was in the spotlight after the owner of Zara, based in Spain, and other retail chains announced a loss in the first quarter, with a sharp drop in sales due to the pandemic. But he also said that trends were improving in May, as many economies began to reopen, and announced plans to close 1,200 stores to help integrate its brick-and-mortar and online businesses. The shares rose 1%.
Airbus
AIR,
+ 0.18%

Shares rose 3.2% after the French government on Tuesday revealed a 15 billion euro ($ 17 billion) rescue package for the aerospace industry, including 7 billion euros for Air France, which had been previously announced. Air France actions
A F,
-6.39%

2.7% decrease.

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