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May 7, 2019, 6:20 a.m. EDT

Europe markets sinking again on trade war escalation

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By Dave Morris

European stocks added to Monday’s slump as markets digested U.S. officials comments on the latest in China trade negotiations.

How did markets perform?

The Stoxx 600 /zigman2/quotes/210599654/delayed XX:SXXP +0.0077%  fell to 385.6, a 0.3% slump after Monday’s 0.9% retreat.

Italy’s FTSE MIB /zigman2/quotes/210598024/delayed IT:I945 +0.16%  was the only major regional index not in negative territory, at 21,459.8, up 0.2%. That may, however, be a function of its Monday decline being the most severe, at 1.6%.

The U.K.’s FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.42% , reopened after Monday’s holiday, declined 0.9% to 7,318.5.

The pound /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.6135%  fell 0.1% to $1.3090, adding to Monday’s 0.2% dip.

In Germany, the DAX /zigman2/quotes/210597999/delayed DX:DAX -0.45%   /zigman2/quotes/210223310/composite DAX -0.15%  slid 0.4% to 12,231.5 following Monday’s 1% drop.

France’s CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 -0.15%  sank 0.6% Tuesday to 5,432.3 after its 1.2% fall Monday.

What’s moving the markets?

The suddenly tumultuous U.S.-China trade talks are planned to go on. Chinese vice Premier Liu He will reportedly still be traveling to Washington, D.C. for further discussions, despite U.S. President Donald Trump’s surprise announcement Sunday that a lack of progress in negotiations prompted him to propose new and higher tariffs on Chinese goods. U.S. officials elaborated on Trump’s tweets Monday, as U.S. Treasury Secretary Steven Mnuchin said the Chinese delegation were trying to “go back on language that had been previously negotiated”.

RBC Capital Markets’ European rates and economics team said that hopes for export-dependent European markets rested in part on trade with China: “The expectation that on top of the solid domestic side of things, exports — particularly into Asia — could recover. And it is here where we see vulnerabilities now. If this expected recovery fails before it really began, the market won’t take it kindly.”

Another week, another round of media reports that U.K. Prime Minister Theresa May will face uncomfortable conversations with fellow Conservatives about when she should step down. A spokesman told the BBC that May’s Tuesday’s meeting with 1922 committee chairman Sir Graham Brady was “routine”, but sources said May would be told that she must name her exit date or have it named for her.

German economic data was once again in the spotlight as manufacturing orders for March produced a significant miss. The figure rose 0.6% month over month, but fell well short of analysts’ predictions of 1.5%.

Which stocks are active?

Spanish telecommunications network operator Cellnex Telecom SA /zigman2/quotes/203057796/delayed ES:CLNX -2.36%  announced €2.7 billion of purchases of network sites from French provider Iliad SA /zigman2/quotes/204711776/delayed FR:ILD -1.03%  and Switzerland’s Salt Mobile SA The 10,700 cellular towers are expected to be built between 2020 and 2027. Cellnex’s shares rose 6.7% on the news.

BMW AG’s /zigman2/quotes/209548467/delayed DE:BMW +0.31%  first quarter earnings were a disappointment as the German auto maker set aside €1.4 billion for potential fallout from a European Union investigation into collusion among car makers around emissions technology. Earnings before interest and taxes were down 78% year over year. BMW’s shares were stung by the results, falling 1.6%.

Purplebricks Group PLC /zigman2/quotes/203490954/delayed UK:PURP +1.40%  shares plunged 6.7% after the U.K. online estate agent announced that founder and CEO Michael Bruce would step down to make way for COO Vic Darvey. The company also said it would wind down its business in the Australian market and cut costs in the U.S.

Pharmaceutical stocks were higher as AstraZeneca PLC /zigman2/quotes/203048482/delayed UK:AZN -2.62%  reported that a new leukemia drug had passed its phase 3 trial, and Novartis AG /zigman2/quotes/203286410/delayed CH:NOVN -1.22%  was on the verge of releasing a gene therapy drug used to treat an infant muscle-wasting disease. Despite criticism over the cost of the drug, Novartis shares were 0.2% higher. AstraZeneca shares climbed 0.7%.

/zigman2/quotes/210599654/delayed
XX : STOXX
391.72
+0.03 +0.0077%
Volume: 0.00
Dec. 3, 2020 5:50p
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/zigman2/quotes/210598024/delayed
IT : Borsa Italiana
22,007.40
+35.20 +0.16%
Volume: 0.00
Dec. 3, 2020 5:35p
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/zigman2/quotes/210598409/delayed
UK : FTSE UK
6,490.27
+26.88 +0.42%
Volume: 909,779
Dec. 3, 2020 4:59p
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/zigman2/quotes/210561263/realtime/sampled
US : Tullett Prebon
1.3449
+0.0082 +0.6135%
Volume: 0.0000
Dec. 3, 2020 3:02p
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/zigman2/quotes/210597999/delayed
DAX
DX : Xetra Indices
13,252.86
-60.38 -0.45%
Volume: 64,310
Dec. 3, 2020 6:30p
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/zigman2/quotes/210223310/composite
US : U.S.: Nasdaq
$ 30.15
-0.05 -0.15%
Volume: 3,717
Dec. 3, 2020 2:59p
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/zigman2/quotes/210597958/delayed
FR : France: Euronext Paris
5,574.36
-8.65 -0.15%
Volume: 92,244
Dec. 3, 2020 6:05p
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/zigman2/quotes/203057796/delayed
ES : Spain: Madrid
50.46
-1.22 -2.36%
Volume: 1.41M
Dec. 3, 2020 5:38p
P/E Ratio
N/A
Dividend Yield
0.21%
Market Cap
€25.15 billion
Rev. per Employee
€640,276
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/zigman2/quotes/204711776/delayed
FR : France: Euronext Paris
178.15
-1.85 -1.03%
Volume: 66,227
Dec. 3, 2020 5:35p
P/E Ratio
5.58
Dividend Yield
1.46%
Market Cap
€10.53 billion
Rev. per Employee
€481,097
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/zigman2/quotes/209548467/delayed
DE : Germany: Frankfurt
74.40
+0.23 +0.31%
Volume: 710.00
Dec. 3, 2020 6:02p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
N/A
Rev. per Employee
€723,779
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/zigman2/quotes/203490954/delayed
UK : U.K.: London
72.60 p
+1.00 +1.40%
Volume: 438,679
Dec. 3, 2020 4:35p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
£219.67 million
Rev. per Employee
N/A
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/zigman2/quotes/203048482/delayed
UK : U.K.: London
7,729.00 p
-208.00 -2.62%
Volume: 2.25M
Dec. 3, 2020 4:35p
P/E Ratio
51.65
Dividend Yield
2.79%
Market Cap
£104.16 billion
Rev. per Employee
£270,731
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/zigman2/quotes/203286410/delayed
CH : Switzerland: SWX
CHF 80.92
-1.00 -1.22%
Volume: 6.18M
Dec. 3, 2020 5:31p
P/E Ratio
27.35
Dividend Yield
3.65%
Market Cap
CHF180.61 billion
Rev. per Employee
CHF454,248
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