By Carla Mozee, MarketWatch
Deutsche Bank profit slumps
European stocks notched small gains Thursday, showing signs of
recovery from their deepest loss in weeks, as a fresh batch of
earnings reports rolled in.
Among those results, Deutsche Bank AG posted a steep slide in
profit and signaled it will make radical changes to its
underperforming investment bank.
Stocks were little changed after the European Central Bank did
as expected and held benchmark interest rates steady
(http://www.marketwatch.com/story/ecb-leaves-interest-rates-unchanged-2018-04-26).
Focus will now swing to ECB President Mario Draghi who may offer
his thoughts on eurozone-economic growth.
How markets are moving
The euro was buying $1.2175, slightly higher than $1.2161 late
Wednesday in New York.
Following a flat open, the Stoxx Europe 600 index rose 0.5% to
381.88. The utility and telecom groups were the best performing,
while the tech and basic materials sectors fell. The pan-European
benchmark on Wednesday fell 0.8%
(http://www.marketwatch.com/story/dax-drops-15-after-lift-in-bond-yields-spooks-wall-street-2018-04-25),
the biggest loss since March 23, according to FactSet data.
Germany's DAX 30 index was up 0.1% at 12,437.06 in a choppy
session for German blue-chips. France's CAC 40 index gained 0.5% to
5,440.38.
Spain's IBEX 35 picked up 0.5% to 9,904.80, and the U.K.'s FTSE
100 , also in a choppy session, was up 0.1% at 7,382.20 after
breaking a six-session winning streak
(http://www.marketwatch.com/story/ftse-100-drops-after-rising-bond-yields-spur-selloff-on-wall-street-2018-04-25)
on Wednesday.
The yield on Germany's 10-year bund fell 2 basis points to
0.62%, according to Tradeweb data, as prices rose.
Check out:Why the premium for German bonds over Treasurys is the
widest in 30 years
(http://www.marketwatch.com/story/why-the-premium-for-owning-german-bonds-over-treasurys-is-at-the-widest-in-30-years-2018-04-23)
What's driving the market
Stocks held largely to higher ground after the European Central
Bank left interest rates unchanged, as expected, and reiterated
that it plans to continue its program of buying EUR30 billion
($36.6 billion) of assets a month until September, "or beyond, if
necessary."
The central bank also repeated that it expects key interest
rates to remain at present levels "for an extended period of time"
and "well past" the planned end of its asset-buying program. Draghi
will hold a news conference at 1:30 p.m. London time, or 8:30 a.m.
Eastern.
See:4 outcomes for the ECB meeting, in 1 handy chart
(http://www.marketwatch.com/story/4-scenarios-for-the-ecb-meeting-on-thursday-in-one-handy-chart-2018-04-24)
And read:Expect a careful, dovish Mario Draghi
(http://www.marketwatch.com/story/expect-a-careful-dovish-mario-draghi-at-next-weeks-ecb-meeting-says-hsbc-2018-04-18)
The ECB in March surprised markets by signaling it's on track to
end its stimulus program before year's end. But since then,
economic data have pointed to a slowdown of the eurozone's economic
expansion, which weighed on investors' expectations for the start
of rate hikes in the middle of 2019.
Making matters worse, core inflation at 1% is still well below
the ECB's target of near, but just below, 2%.
Before the ECB's policy statement, investors have been sifting
through a stream of earnings reports, from big names such as
Deutsche Bank, Barclays PLC and Royal Dutch Shell PLC, with a mixed
bag of results. In the backdrop were U.S. Treasury 10-year bond
yields , which were holding above the psychologically important 3%
level. Rising bond yields can weigh on stocks as bonds start to
offer better returns than equities and raise borrowing costs.
Stocks in focus
Deutsche Bank shares (DBK.XE) (DBK.XE) lost 2.1% after the
embattled lender said first-quarter net profit tumbled 79% to
EUR120 million
(http://www.marketwatch.com/story/deutsche-bank-profit-tumbles-79-amid-big-overhaul-2018-04-26-34852359),
and said it will shrink its U.S. investment bank. The report is the
first since it ousted Chief Executive John Cryan.
Philips Lighting NV shares (LIGHT.AE) tumbled 13% as the company
said first-quarter net profit fell 67%
(http://www.marketwatch.com/story/philips-lighting-net-profit-sales-fall-2018-04-26)
while sales fell on the poor performance of its home division.
Volkswagen AG (VOW.XE) (VOW.XE) picked up 2.1%, with the German
auto maker confirming its fiscal-year guidance
(http://www.marketwatch.com/story/volkswagen-profit-slips-confirms-fy-guidance-2018-04-26).
First-quarter revenue rose 3.6% and after-tax profit fell slightly
to EUR3.3 billion ($4 billion).
Royal Dutch Shell PLC (RDSA.LN) (RDSA.LN) was down 2.2% even as
the oil producer reported its highest quarterly profit since 2013.
First-quarter profit on a current cost-of-supplies basis -- a
number similar to the net income that U.S. oil companies report --
rose 69% to $5.7 billion.
(http://www.marketwatch.com/story/shell-profit-shoots-up-on-higher-gas-oil-prices-2018-04-26-24855213)
Barclays PLC (BCS) (BCS) shares were off 0.6% during a seesaw
session. The U.K.-based lender said a settlement of charges with
the U.S. Justice Department helped drag to a first-quarter loss of
GBP764 million.
(http://www.marketwatch.com/story/barclays-swings-to-loss-on-doj-settlement-2018-04-26)
What strategists are saying
"We know that the ECB is not ready to raise interest rates and
they certainly don't want to see the euro-dollar pair back above
$1.24 because that would offset the improvements in prices. Yet
they also want to end QE purchases this year -- so Mario Draghi has
quite the balancing act to do on Thursday," said Kathy Lien,
managing director of FX strategy at BK Asset Management, in a late
Wednesday note.
"We think Draghi will remain cautious and emphasize patience,
which in an environment of a rising U.S. dollar could send the
euro-dollar pair down to $1.21 and eventually $1.20. However, if
the tone of his press conference is a bit more optimistic, the euro
could bounce back up to $1.23," Lien said.
Economic data
Market-research group GfK's forward-looking consumer confidence
index is set to drop to 10.8 points in May
(http://www.marketwatch.com/story/german-consumer-sentiment-set-to-weaken-in-may-2018-04-26)
from 10.9 points in April, it said Thursday, as geopolitical issues
and growing protectionism are souring German consumers' mood.
(END) Dow Jones Newswires
April 26, 2018 08:19 ET (12:19 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
FTSE 100 (FTSE:UKX)
Gráfico Histórico do Índice
De Mar 2024 até Abr 2024
FTSE 100 (FTSE:UKX)
Gráfico Histórico do Índice
De Abr 2023 até Abr 2024
