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Nov. 23, 2021, 10:42 a.m. EST

Europe stocks under pressure as Goldman Sachs warns of a tough COVID winter ahead

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By Barbara Kollmeyer

European stocks were under pressure on Tuesday, albeit in a week with volumes lightened by the U.S. Thanksgiving holiday, but with investors increasingly concerned about the wave of COVID cases sweeping major economies.

The Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP -3.81% fell 0.8% to 481.35, set for its worst one-day session since late September. The German DAX /zigman2/quotes/210597999/delayed DX:DAX -3.80% fell 0.7%, the French CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 -3.97% slipped 0.1%. The FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX -2.63% rose 0.3% and Spain’s IBEX 35 index /zigman2/quotes/210597995/delayed XX:IBEX -3.18% rose 0.4%. The euro /zigman2/quotes/210561242/realtime/sampled EURUSD -0.0177% was flat at $1.1246.

Investors brushed aside data showing the flash IHS Markit November eurozone composite output index reaching a two-month high of 55.8 in November from 54.2 in October. The survey also indicated that persistent supply bottlenecks and rising COVID cases were clouding the near-term outlook.

Apart from surging cases in countries such as Germany and Austria, which is under a 10-day nationwide lockdown that began Monday, France’s Prime Minister Jean Castex has tested positive and Germany’s health minister, Jens Spahn, warned Monday that by the end of winter,  “pretty much everyone in Germany … will be vaccinated, cured or dead.”

That’s as the World Health Organization itself warned that COVID deaths in Europe would hit 2.2 million by March based on current trends .

“Continued upward pressure on case growth across Europe through the winter seems likely given the high infectiousness of the delta variant and cold winter weather. At the same time, Europe has significantly higher covid immunity than last winter, which should help protect hospital capacity, especially in the South,” a team of Goldman Sachs economists led by Sven Jari Stehn told clients in a note on Tuesday.

Stehn and the team said economic growth in the euro area will likely take 0.2% percentage points hit in the fourth quarter of this year and first quarter of 2022, and about half as much in the U.K., which has also seen surging COVID cases. The continent will see significant variation, with a harder hit for Germany than for Spain or Italy.

Reflecting U.S. action, technology stocks were under pressure in Europe amid rising bond yields. ASML Holding /zigman2/quotes/210293876/composite ASML -1.05% , a heavily weighted Dutch chip group, fell nearly 5%, while German business software group SAP /zigman2/quotes/207905606/composite SAP -1.53% /zigman2/quotes/202053813/delayed XE:SAP -4.29% down 2%, and in the chip sector, Infineon Technologies /zigman2/quotes/203152288/delayed XE:IFX -6.15% stock down 3.4%.

Top performers included retailer Hennes & Mauritz /zigman2/quotes/208522175/delayed SE:HM.B -2.73% , up 5% and Compass Group /zigman2/quotes/200043088/delayed UK:CPG -3.72% , up over 4% after the catering contractor reported an increase in pretax profit for fiscal 2021, booked lower costs and returned to the dividend list .

/zigman2/quotes/210599654/delayed
XX : STOXX
456.36
-18.08 -3.81%
Volume: 0.00
Jan. 24, 2022 11:03p
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/zigman2/quotes/210597999/delayed
DAX
DX : Xetra Indices
15,011.13
-592.75 -3.80%
Volume: 115,815
Jan. 24, 2022 6:30p
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/zigman2/quotes/210597958/delayed
FR : France: Euronext Paris
6,787.79
-280.80 -3.97%
Volume: 135,929
Jan. 24, 2022 6:05p
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/zigman2/quotes/210598409/delayed
UK : FTSE UK
7,297.15
-196.98 -2.63%
Volume: 1.01M
Jan. 24, 2022 4:56p
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/zigman2/quotes/210597995/delayed
XX : Spain: Madrid
8,417.80
-276.90 -3.18%
Volume: 275.31M
Jan. 24, 2022 5:38p
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/zigman2/quotes/210561242/realtime/sampled
US : Tullett Prebon
1.1324
-0.0002 -0.0177%
Volume: 0.0000
Jan. 24, 2022 8:32p
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/zigman2/quotes/210293876/composite
US : U.S.: Nasdaq
$ 687.42
-7.31 -1.05%
Volume: 2.83M
Jan. 24, 2022 4:00p
P/E Ratio
43.61
Dividend Yield
0.49%
Market Cap
$288.12 billion
Rev. per Employee
$783,594
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/zigman2/quotes/207905606/composite
US : U.S.: NYSE
$ 133.72
-2.08 -1.53%
Volume: 1.77M
Jan. 24, 2022 4:00p
P/E Ratio
23.14
Dividend Yield
2.15%
Market Cap
$162.23 billion
Rev. per Employee
$321,257
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/zigman2/quotes/202053813/delayed
XE : Germany: Xetra
116.00
-5.20 -4.29%
Volume: 3.50M
Jan. 24, 2022 6:30p
P/E Ratio
23.98
Dividend Yield
1.59%
Market Cap
€142.97 billion
Rev. per Employee
€271,795
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/zigman2/quotes/203152288/delayed
XE : Germany: Xetra
34.29
-2.25 -6.15%
Volume: 8.48M
Jan. 24, 2022 6:30p
P/E Ratio
39.14
Dividend Yield
0.79%
Market Cap
€47.54 billion
Rev. per Employee
€219,968
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/zigman2/quotes/208522175/delayed
SE : Sweden: Stockholm
kr 167.92
-4.72 -2.73%
Volume: 4.57M
Jan. 24, 2022 5:29p
P/E Ratio
31.32
Dividend Yield
3.87%
Market Cap
kr285.73 billion
Rev. per Employee
N/A
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/zigman2/quotes/200043088/delayed
UK : U.K.: London
1,618.00 p
-62.50 -3.72%
Volume: 1.80M
Jan. 24, 2022 4:35p
P/E Ratio
80.90
Dividend Yield
0.87%
Market Cap
£29.98 billion
Rev. per Employee
N/A
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