European stocks struggled to win on Wednesday as investors made a stream of profits from banks such as Barclays PLC and Deutsche Bank AG and waited for the Federal Reserve to be announced later.
Index Stoxx Europe 600 SXXP,
decreased by 0.3% to 366.94, gaining 0.4% on Tuesday. German DAX DAX,
and FTSE 1
fell by about 0.2% each, while the French CAC 40 PX1,
rose by 0.3%, enhanced by well-obtained results from the heavyweight Schneider Electric SE.
But it was difficult to win, as the results of companies around the world confirmed the harsh climate caused by the pandemic. Yield of 10-year German bonds TMBMKDE-10Y,
on Wednesday minus 0.5%, the level was not observed for two months. Output on 10-year gilding TMBMKGB-10Y,
reached the lowest level since March -0.135%.
US stocks fell on Tuesday after the results of several large companies, including 3 million MMM
and McDonald’s MCD,
disappointed in the main week in corporate profits. Nasdaq-100 futures NQ00,
later pointed to a rebound, but the Dow YM00,
and S&P 500 ES00,
futures were flat.
Investors are waiting for the result of a two-day meeting of the Federal Reserve – the decision will be made only after the closure of European markets. Until major policy changes are expected, Fed Chairman Jerome Powell is expected to retain his position as central bank. In addition, close monitoring of the implementation of the second package of assistance with coronavirus outside the United States.
“Despite optimism about a new stimulus program in the United States, growing hopes for the vaccine and the likelihood that central banks will leave monetary policy extremely free, coronavirus outbreaks are beginning to be reported around the world, prompting hopes that the V-shaped recovery begins like a pie in the sky, “said Michael Hewson, chief market analyst at CMC Markets, in a note to customers.
Although cases may start plateaus in some of the most affected U.S. states, some 21 are considered hotspots, according to the New York Times. This is because parts of Asia and Europe are battling a potential second wave of the virus, an outbreak in parts of Spain and Belgium. The UK recommended against all but important trips to Spain over the weekend, throwing up a booming tourism industry.
Several large banks reported the results on Wednesday, when the economic consequences of the coronavirus forced these institutions to abandon high costs.
Shares of Barclays PLC BARC,
decreased by 1.7% after reporting that pre-tax profit halved in the first half of 2020 as the lender charged a loan impairment fee of £ 3.74 billion ($ 4.8 billion). Barclays also warned of a difficult second half.
Shares of Banco Santander SA SAN,
fell more than 4% after a Spanish lender reported unexpected large-scale losses in the second quarter, weighted at 12.6 billion euros ($ 14.76 billion) as a result of the pandemic.
But the shares of Deutsche Bank AG DB,
rose by 1%. The German bank recorded a loss in the second quarter, but higher income due to the effective performance of its investment bank unit, although reserves for bad loans reached the highest level in more than a decade.
Shares of Schneider Electric SE rose 3% after the French energy management group SU,
reported a drop in net income in the first half, but renewed targets for the year and the share repurchase program.
Fine oil PLC TLW,
shares fell 5% after the British oil producer said it expected to report declining revenues and forecast a reduction in revaluation, which will be from 1.4 to 1.7 billion dollars.