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European Stocks

European Stocks Rise with U.S. Futures on Stimulus Hopes 

European stocks were up on Monday, and trading was boosted by hopes of further stimulus on both sides of the Atlantic. The spread of COVID-19 increasingly led to tighter restrictions on activity.

At 2.1% up last week, the Stoxx Europe 600 rose 0.4%.

Both German DAX and the French CAC 40 climbed higher, while the U.K. FTSE 100 fell.

U.S. stocks futures SP 500 FUTURES NASDAQ 100 FUTURES were up. This followed a 3.8% rise for the S&P 500 SPX last week.

Markets are focused on the prospect of a further U.S. stimulus package. Though, republicans and democrats objected to the new proposal from the Trump administration.

The U.S. fiscal policy negotiations are starting to look like the EU-U.K. divorce negotiations. That’s by being both tedious and interminable. This was according to Paul Donovan, chief economist of UBS global wealth management. 

In polls, former Vice President Joe Biden is leading President Donald Trump.  If not ahead of the election, traders believe that a new U.S. stimulus will come early next year.

A Period of Uncertainty

Economies in the eurozone countries are going to end the year about 5% below last year’s levels. This was a statement from an interview with Philip Lane, the chief economist of the European Central Bank. He didn’t commit to further stimulus.

He also said it really is a unique period of uncertainty. But along some dimensions, he continued, the uncertainty will diminish in the autumn. Because they’ll know more about the outlook for 2021, Lane added. 

New local lockdown rules in England will be set, with Liverpool expected to face the toughest restrictions.

KPN shares shot up 7% following reports that private-equity group EQT was considering a takeover offer for the Dutch telecom.

Daimler shares increased by 2% as Goldman Sachs upgraded the automobile maker to buy from sell. It is the latest among brokerages to become more optimistic on the maker of Mercedes-Benz cars.

Société Générale shares rose 3% as Jefferies upgraded the French bank to buy from hold. It enumerated its expectations on higher French banking revenue, lower costs, and better dividends.

Euronext fell 3%, falling for a second day. This was after agreeing to buy Borsa Italiana from the London Stock Exchange for €4.3 billion. 

According to analysts at UBS, Euronext paid more than they had anticipated. Moreover, the forecasted cost synergies are less than expected.

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