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European Stocks Seen Higher on New U.S. Stimulus Hopes

Stock MarketsOct 01, 2020 02:05AM ET
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© Reuters.

By Peter Nurse 

Investing.com - European stock markets are seen opening higher Thursday, boosted by renewed hope of a new U.S. stimulus package to help the world’s largest economy recover from the impact of the coronavirus pandemic.

At 2:05 AM ET (0605 GMT), the DAX futures contract in Germany traded 0.9% higher, CAC 40 futures in France were up 0.7% and the FTSE 100 futures contract in the U.K. rose 0.4%. 

Optimism for a new deal flooded the market Wednesday after U.S. Treasury Secretary Steven Mnuchin said talks with House Speaker Nancy Pelosi had made progress, and the House of Representatives duly postponed a vote on a $2.2 trillion Democratic coronavirus plan to allow more time for a bipartisan deal to come together.

White House chief of staff Mark Meadows followed by outlining a new stimulus proposal worth over $1.5 trillion, still short of the level the Democrats have been seeking but markets have welcomed the fact that the two sides are talking after weeks of inactivity.

“As coronavirus continues to linger and certain areas of the economy are still shut down, you need some sort of stimulus package,” said Andrea Roemhildt, investment manager at Aware Asset Management, in a Bloomberg report. “The market is just waiting for a signal that this might actually get done.”

Back in Europe, Germany's industrial sector is only improving slowly and the coronavirus crisis is still directly hitting the earnings of industrial firms, Germany's Ifo institute said on Thursday.

Ifo said its indicator for industrial firms' earnings was at -32 points in September, a slight improvement from -43 points in May, when Ifo last asked companies about their earnings.

The release of German manufacturing PMI data later in the session will be keenly awaited, along with eurozone unemployment and PPI data, while the EU leaders also start a summit.

In corporate news, Veolia Environnement (PA:VIE) will be in focus after it agreed late Wednesday to extend its improved offer to buy a 29.9% stake in waste-management company Suez (OTC:SZSAY) from Engie (PA:ENGIE) to Oct. 5. 

U.K. engineering giant Rolls-Royce (LON:RR), which has set a series of 52-week lows in recent days, has announced plans to raise 2 billion pounds ($3.6 billion) through a deeply discounted rights issue.

Oil prices held steady in early European trade Thursday, after climbing during the previous session on the back of U.S. crude stockpiles falling 2 million barrels last week, defying trade expectations for a build..

U.S. crude futures traded 0.2% lower at $40.16 a barrel, while the international benchmark Brent contract rose 0.5% to $42.53. Both contracts closed more than 3% lower on Tuesday.

Elsewhere, gold futures fell 0.2% to $1,899.45/oz, while EUR/USD traded 0.3% higher at 1.1754.

European Stocks Seen Higher on New U.S. Stimulus Hopes
 

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Comments (3)
Wayne Ng
Wayne Ng Oct 01, 2020 4:10AM ET
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Reflecting the title, they are different kinds of animals
Ricardo Diogo
Rcd72 Oct 01, 2020 3:14AM ET
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hopes hopes hopes....bla bla fundamentals is what watchdouble overvalued market !!
Đức Phú Nguyễn
Đức Phú Nguyễn Oct 01, 2020 2:36AM ET
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New stimulus talk is likely to fail because Democrats dont want to support Trump.
John Thompson
John Thompson Oct 01, 2020 2:36AM ET
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Yeah good i wouldnt either with his moscow friend loan backing him all the way to the IRS
 
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