European stocks struggled for profit on Wednesday as investors received a flood of earnings from banks such as Barclays PLC and Deutsche Bank AG, and waited for a Federal Reserve announcement to come later.
The Stoxx Europe 600 SXXP Index,
It fell 0.3% to 366.94 after gaining 0.4% on Tuesday. The German DAX DAX,
and the FTSE 100 UKX index,
They fell about 0.2% each, while the French CAC 40 PX1,
It increased 0.3%, driven by the well-received results from heavyweight Schneider Electric SE.
But it was difficult to make a profit as the company’s results worldwide have confirmed the harsh climate caused by the pandemic. The yield on German 10-year bonds TMBMKDE-10Y,
it hit minus 0.5% on Wednesday, a level not seen in two months. The performance in the 10-year-old sows TMBMKGB-10Y,
it hit the lowest since March at -0.135%.
US stocks fell on Tuesday after the results of several large companies, including 3M MMM,
and McDonald’s MCD,
disappointed in a major week for corporate earnings. Nasdaq-100 NQ00 futures,
noted a rebound later, but Dow YM00,
and S&P 500 ES00,
Futures were flat.
Investors await the outcome of a two-day Federal Reserve meeting: the decision will not be made until after the closure of European markets. While no major policy changes are expected, Fed President Jerome Powell is expected to maintain the moderate position of the central bank. Additionally, progress on a second coronavirus relief package outside the U.S. is being closely monitored.
“Despite all the optimism about a new US stimulus program, rising hopes for a vaccine and the likelihood that central banks will keep monetary policy remarkably flexible, the resurgence of coronavirus cases that are beginning reporting worldwide is prompting the hope that a V-shaped recovery is starting to look like a pie in the sky, “said Michael Hewson, chief market analyst at CMC Markets, in a note to customers.
While cases may be starting to stabilize in some of the hardest hit U.S. states, about 21 are considered hotspots, the New York Times reported. That’s when parts of Asia and Europe are dealing with a possible second wave of the virus, with outbreaks in parts of Spain and Belgium. Over the weekend, the UK recommended against all less essential travel to Spain, sparking an uproar in the travel industry.
Several large banks reported results on Wednesday, and the economic consequences of the coronavirus forced those institutions to reserve important charges.
Barclays PLC BARC Shares,
BARC
It fell 1.7% after reporting that pre-tax earnings were more than halved in the first half of 2020, as the lender reserved a credit impairment charge of £ 3.74 billion ($ 4.8 billion). Barclays also warned of a challenging second half.
Shares of Banco Santander SA SAN,
SAINT
it fell more than 4% after the Spanish lender reported a surprise massive loss in the second quarter, which was affected by a deterioration of 12.6 billion euros ($ 14.76 billion) derived from the economic shock of the pandemic.
But the shares of Deutsche Bank AG DB,
DBK,
up 1%. The German bank posted a loss in the second quarter, but higher revenues due to a strong performance of its investment bank unit, although provisions for bad loans reached the highest level in more than a decade.
Shares of Schneider Electric SE rose 3% after French energy management group SU,
reported a drop in first-half net profit, but reinstated the full-year goals and its share buyback program.
Tullow Oil PLC TLW,
Shares fell 5% after the UK oil producer said it expects to report lower earnings and forecast pre-tax deterioration of between $ 1.4 billion and $ 1.7 billion.
.
