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Stocks - Europe To Edge Lower; Siemens Earnings in Focus

Stock MarketsFeb 05, 2020 02:10AM ET
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© Reuters.

By Peter Nurse - European stock markets are set to open a touch lower Wednesday, with investors happy to bank some of Tuesday’s healthy gains despite a positive tone to Asian markets. Overall sentiment remains fragile, but earnings from a raft of blue-chips such as Siemens , BNP Paribas (PA:BNPP) and Vodafone (LON:VOD) may change that

At 02:30 ET (0730 GMT), the DAX futures contract traded 36 points, or 0.3% lower, while the FTSE 100 futures contract in the U.K. fell 5 points, or 0.1%. France's CAC 40 futures were down just 1 point, or 0.1%. Futures on the pan-eurozone Euro Stoxx 50, dropped 6 points, or 0.2%.

On Tuesday, the DAX cash index gained 1.8%, the CAC 40 cash index 1.8%, the FTSE 100 cash index 1.6% and the Euro Stoxx 50 cash equivalent 1.9%.

Germany’s Siemens (DE:SIEGn) on Wednesday reported weaker-than-expected industrial profit during its first quarter as the industrial downturn hit its flagship digital industries business and its wind power unit suffered losses.

The largest industrial manufacturing company in Europe saw its industrial operating profit fall 30% to 1.43 billion euros ($1.58 billion), missing analyst forecasts for 1.88 billion euros in a consensus gathered by the company.

Elsewhere, BNP Paribas (PA:BNPP) posted a hefty 62% jump in fixed-income trading revenue in the fourth quarter, to 820 million euros ($905 million), after a rebound in rates and foreign exchange activity. This was way ahead of its release a year earlier, though fell short of the $1 billion generated in the previous quarter.

Overnight the blue-chip Shanghai Composite index posted modest gains, closing 0.9% higher, helped by the decision of The People's Bank of China to pump hundreds of billions of dollars into the financial system this week to keep rates from rising and restore confidence.

And the expectation is that the PBOC will do more, probably lowering its key lending rate - the loan prime rate - on Feb. 20, when it next meets, and cutting banks' reserve requirement ratios in the coming weeks.

Still, the coronavirus continues to claim victims, as the mainland China death toll increased to 490, while confirmed cases rose to 24,324, Chinese authorities reported Wednesday.

Turning back to Europe, economic data of note include services PMI numbers from a raft of European countries, with the eurozone number due at 04:00 AM ET (0900 GMT), and the U.K. equivalent 30 minutes later. The retail sales numbers for the eurozone at 05:00 AM ET (1000 GMT) will also be of interest.

On Wall Street, Walt Disney (NYSE:DIS) impressed after reporting after hours that the number of subscribers to its new streaming service more than doubled in its first three months, to over 28 million.

On the flip side, Ford's (NYSE:F) fourth-quarter operating income sank by two-thirds, and it issued a lower-than-expected profit outlook for 2020, while Macy’s (NYSE:M) announced plans to close 125 stores in an admission that online shopping has hit the department-store operator hard.

The spotlight could also be on eBay (NASDAQ:EBAY) Wednesday, after the Wall Street Journal reported that Intercontinental Exchange, the owner of the NYSE, has made a takeover offer for the online marketplace that could value it at more than $30 billion.

In the oil markets, U.S. crude futures recovered a little overnight from the one-year lows they hit on Tuesday, helped a little by a smaller-than-expected rise in U.S. inventories reported by the American Petroleum Institute.

AT 02:30 AM ET (0730 GMT), U.S. crude futures traded 0.5% higher at $49.84 and the international benchmark Brent contract rose 0.6% to $54.28.

Stocks - Europe To Edge Lower; Siemens Earnings in Focus

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Ez McSquare
Ez McSquare Feb 05, 2020 2:55AM ET
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Good coverage..
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