EUROPE MARKETS: Europe Markets Quiet As Fed Meeting In Focus
June 17 2019 - 07:06AM
Dow Jones News
By Dave Morris
Deutsche Bank, Lufthansa among shares most active
European markets were unusually calm Monday as investors
contemplated whether central banks would save them from the impacts
of the continuing U.S.-China trade battle.
How did markets perform?
The Stoxx 600 was flat at 378.9, after declining 0.4%
Friday.
The U.K.'s FTSE 100 was also flat at 7,345.6. On Friday it moved
down 0.3%.
The pound was likewise flat at $1.2592. It sank Friday by
0.6%.
In Germany, the DAX ticked up 0.1% to 12,107.7 It slid 0.6%
Friday.
France's CAC 40 reached 5,377.3, an increase of 0.2% after
decreasing 0.1% Friday.
Italy's FTSE MIB rose 0.2% to 20,661.1. On Friday it nudged 0.1%
lower.
What's moving the markets?
U.S. Commerce Secretary Wilbur Ross played down the prospect of
a China-U.S. trade deal
(http://www.marketwatch.com/story/wilbur-ross-lowers-expectations-of-trade-deal-coming-from-g-20-talks-between-trump-xi-2019-06-16)emerging
from the G-20 summit in Japan if U.S. President Donald Trump and
Chinese President Xi Jinping ultimately do hold talks. Ross said
the "most that might come" is new ground rules for the negotiations
or possibly a schedule of future discussions.
Investors will be watching and positioning themselves ahead of a
busy week for central bank meetings, as some fear trade tensions
are nudging the global economy toward recession. Others, however,
are skeptical that the U.S. Federal Reserve will cut its policy
rate Wednesday
(http://www.marketwatch.com/story/the-fed-may-break-a-lot-of-stock-market-investors-hearts-next-week-2019-06-15),
as unemployment is at record lows and inflation is running close to
the Fed's target.
"Investors need to be asking themselves what the Fed is seeing
that they are not, especially as the last two-rate cutting cycles
from the American central bank initially brought holders of U.S.
equities absolutely no joy at all," said Russ Mould, investment
director for AJ Bell.
The Bank of England and the Bank of Japan are also set to hold
meetings.
Which stocks are active?
Deutsche Bank AG (DBK.XE) shares rose after a report in the
Financial Times that the beleaguered lender is moving to set up a
'bad bank' holding up to EUR50 billion
(http://www.marketwatch.com/story/deutsche-bank-to-create-50-billion-bad-bank-ft-2019-06-17)
worth of poorly performing assets such as certain derivatives. The
bank is expected to restructure its trading operations, shrinking
or closing them outside continental Europe. Shares moved up 2%.
Deutsche Lufthansa AG (LHA.XE) slashed its projections for 2019,
citing overcapacity and stiff competition in the air travel market
(http://www.marketwatch.com/story/lufthansa-cuts-2019-view-hurt-by-cheaper-airlines-2019-06-17).
Its shares plunged 11.4%, and affected sentiment among other
companies in the sector. EasyJet PLC (EZJ.LN) sank 5.2% while
Ryanair Holdings PLC (RY4C.DB) declined 4.2%.
Royal Mail PLC (RMG.LN) ticked upward by 2.4% after Bernstein
analysts upgraded its shares to outperform and highlighted the
strength of its European parcels business, GLS. Shares over the
past 52 weeks have cratered 59.2%.
(END) Dow Jones Newswires
June 17, 2019 06:51 ET (10:51 GMT)
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