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Stocks - Europe Seen Lower as EU Summit Drags On

Published 07/20/2020, 02:11 AM
© Reuters.

By Peter Nurse 

Investing.com - European stock markets are seen edging lower Monday, amid disappointment that the region’s leaders have failed to come to an agreement over additional stimulus as coronavirus case numbers continue to rise globally.

At 2:10 AM ET (0610 GMT), the DAX futures contract in Germany traded 0.2% lower, the FTSE 100 futures contract in the U.K. fell 0.1%, while CAC 40 futures in France dropped 0.4%.

European Union leaders remain deadlocked after three days of haggling over a plan to revive economies hard hit by the Covid-19 pandemic, unable to agree on how to structure the 750 billion euros proposed for the recovery fund and what conditions to put on the countries - mainly from the Mediterranean rim - that would benefit from the fund.

That said, losses are likely to be limited as the leaders have agreed to return on Monday afternoon in an effort to finish the negotiations, suggesting the two sides are not too far apart.

In the United States, U.S. policymakers are set to begin debating a new aid package this week, with some existing programs to support businesses and households set to expire within weeks.

The Republicans want the upcoming aid bill to cost no more than $1 trillion while leading Democrats are seen as asking for something approaching three times as much.

This comes with the number of coronavirus infections having climbed above 14.5 million, with over 600,000 deaths world wide, according to data from Johns Hopkins University.

The virus has claimed over 140,000 U.S. lives in total. Florida announced over 12,000 new cases on Sunday, while the Mayor of Los Angeles said his city is on the brink of new lockdown measures.  

In corporate news, Koninklijke Philips (AS:PHG) will be in focus after the Dutch medical-technology company said Monday that net profit exceeded expectations, and it expects to return to sales growth in the second half of the year.

Additionally, Intesa Sanpaolo (MI:ISP) has increased its takeover offer for smaller rival Unione di Banche Italiane (MI:UBI), adding a cash component.

Oil prices fell Monday as the growth of coronavirus cases around the globe continued to pose a threat to the recovery in fuel demand. 

While fuel demand has recovered from the record drop in April after countries around the world imposed strict lockdowns, usage is still below pre-pandemic levels. 

Additionally, last week the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, agreed to scale back oil production cuts from August.

At 2:10 AM ET, U.S. crude futures traded 0.6% lower at $40.49 a barrel, while the international benchmark Brent contract fell 0.7% to $42.84.

Elsewhere, gold futures were flat at $1,810/oz, while EUR/USD traded at 1.1463, up 0.3% on the day.


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