By Sara Sjolin, MarketWatch
European stocks finished modestly lower Wednesday ahead of a key meeting between U.S. President Donald Trump and European Commission President Jean-Claude Juncker that could provide clarity on trade relations between the U.S. and eurozone.
What are markets doing?
Germany’s DAX 30 index /zigman2/quotes/210597999/delayed DX:DAX +0.72% ended down 0.9% at 12,579.33 on Wednesday, while France’s CAC 40 index /zigman2/quotes/210597958/delayed FR:PX1 +0.20% slipped 0.1% to 5,426.41. Losses for the French index curbed by LVMH Moët Hennessy Louis Vuitton SE /zigman2/quotes/201350549/delayed FR:MC -2.09% rising 1.8% after reporting a 41% jump in first-half profits.
The euro /zigman2/quotes/210561242/realtime/sampled EURUSD -0.0189% was down at $1.1674, compared with $1.1685 late Tuesday in New York, while the pound /zigman2/quotes/210561263/realtime/sampled GBPUSD -0.0240% was marginally higher at $1.3151.
What is driving the market?
Markets closed lower in Europe as investors awaited fresh catalysts after Tuesday’s push higher. Earnings were still in focus, with more than 400 companies in the Stoxx 600 still waiting to release results. Of the 140 companies to have reported so far, 37% have beaten earnings forecast, while 61% have exceeded sales expectations.
Across the pond, U.S. President Donald Trump and Juncker will meet later Wednesday to discuss trade. Trump has imposed tariffs on imports of European steel and aluminum and threatened new ones on cars, sparking concerns about the EU-U.S. alliance. Juncker will at Wednesday’s meeting reportedly argue that Europe is Washington’s friend and not trying to take advantage of its American ally.
What are strategists saying?
“Today’s meeting between U.S. President Trump and EU Commission President Juncker could be decisive for broader risk sentiment. European car maker stocks will likely be in the eye of the storm, in light of U.S. threats for tariffs on EU car imports if the talks fail to bear fruit,” said Andreas Georgiou, investment analyst at XM, in a note.
What’s new in economics?
German business sentiment came in slightly better than expected, with the Ifo business climate index for July printing at 101.7, compared with forecasts of a 101.5 reading. The index was at 101.8 in June.
SEB SA /zigman2/quotes/210398461/delayed FR:SK +0.80% rallied 9.2% after well-received earnings from the French small-appliances company.
Ryanair Holdings PLC rose 0.6% after the discount airline said it would cut capacity in Dublin by 20% amid pilot strikes in the Irish capital.
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