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Europe Markets: European stocks struggle and U.S. equity futures edge lower ahead of Fed decision

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A previous version of this report gave the wrong date for the Bank of England policy meeting. The story has been corrected.

European stocks struggled on Wednesday, alongside U.S. equity futures, as investors awaited the outcome of the Federal Open Market Committee meeting.

Some chip stocks saw pressure after a Samsung Electronics executive warned of problems with global shortages.

The Stoxx Europe 600 index
SXXP,
-0.38%

eased 0.1% after a 0.9% gain on Tuesday, the biggest one-day percentage gain since March 8. A loss would mark the first in three sessions. The German DAX
DAX,
+0.02%

inched up 0.1% and the French CAC 40
PX1,
-0.22%

eased 0.1%, while the FTSE 100
UKX,
-0.43%

fell 0.3%. The euro
EURUSD,
-0.08%

was steady, while the pound
GBPUSD,
+0.04%

was firmer against the dollar.

U.S. stock futures were mixed, with Nasdaq-100 futures
NQ00,
-0.69%

under pressure and Dow
YM00,
+0.00%

and S&P 500 futures
ES00,
-0.22%

flat. The Dow industrials
DJIA,
-0.39%

and S&P 500
SPX,
-0.16%

ended lower on Tuesday, a day after posting records, while the Nasdaq Composite
COMP,
+0.09%

managed a modest gain. Investors are expecting no changes in Fed policy, but will be paying close attention to its projections regarding the U.S. economy and interest rates.

Federal Reserve Chair Jerome Powell’s news conference will also be a highlight as pressure remains on the bond market. The yield on the 10-year Treasury
TMUBMUSD10Y,
1.665%

was up 2 basis points to 1.632%.

Read: What would cause the Fed to take a U-turn? Hint: a lot more than some high inflation readings

On Thursday, the Bank of England’s Monetary Policy Committee will announce its own policy decision. The central bank is expected to keep its key rate steady at 0.1% and maintain the ceiling of its continuing bond-buying program at £895 billion ($1.2 trillion). Gilt yields
TMBMKGB-10Y,
0.829%

hovered at 0.79%, but began the year at around 0.2%.

Read: Bank of England seen as relaxed about rising yields

New car sales in the European Union fell 19% on an annual basis in February, as economic uncertainty and measures to stop the spread of COVID-19 weighed on demand, the European Automobile Manufacturers’ Association said.

But BMW
BMW,
+5.33%

shares were among the biggest gainers, up 4% after the German luxury-car maker said group pretax profit should be significantly higher than in 2020, as it forecast projected earnings before interest and taxes margin for the automotive unit to come in at between 6% and 8%.

Shares of Porsche
PAH3,
+2.52%
,
Renault
RNO,
+3.24%

and Volkswagen
VOW,
+8.93%

were also up more than 2% each.

Shares of STMicroelectronics
STM,
-0.27%

STM,
-1.43%

fell over 1%, and those of ASM International
ASM,
-1.15%

dropped 0.6%. Chip-related companies tracked losses in Asia for companies such as Taiwan Semiconductor, which fell 1%, and Samsung Electronics, which dropped 0.6%.

Those losses came after a warning over chip shortages that have hit the global auto sector and could spread to technology.

“There’s a serious imbalance of supply and demand in the IT sector globally…It is hard to say the shortage issue has been solved 100%,” said Samsung’s co-chief executive officer Koh Dong-jin at a shareholder meeting, according to the Financial Times.

Iron-ore pellet producer Ferrexpo
FXPO,
+0.96%

posted a higher profit for 2020 and proposed a further special interim dividend. Shares fell 1.5%.

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