By Steve Goldstein
European stocks traded higher on Monday, helped by hopes of further stimulus on both sides of the Atlantic, and with the autumn spread of coronavirus increasingly leading to tightened rules on activity.
Up 2.1% last week, the Stoxx Europe 600 /zigman2/quotes/210599654/delayed XX:SXXP -1.10% rose 0.4%.
The German DAX /zigman2/quotes/210597999/delayed DX:DAX -1.06% and the French CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 -1.01% edged higher, while the U.K. FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX -0.54% slipped.
After a 3.8% gain for the S&P 500 /zigman2/quotes/210599714/realtime SPX -1.37% last week, U.S. stock futures /zigman2/quotes/208225921/composite SP -2.88% /zigman2/quotes/210598365/realtime COMP -1.87% rose.
Market attention continues to be focused on the prospect of a second U.S. stimulus package. Senate Republicans as well as House Democrats objected to the new offer from the Trump administration over the weekend.
“U.S. fiscal policy negotiations are starting to look a lot like the EU-U.K. divorce negotiations, being both tedious and interminable,” said Paul Donovan, chief economist of UBS global wealth management. With former Vice President Joe Biden leading President Donald Trump in polls, traders believe that new U.S. stimulus will come early in 2021 if not ahead of the election.
Philip Lane, the chief economist of the European Central Bank, said in an interview that the eurozone economy is going to end the year about 5% below last year’s levels, as he didn’t commit to further stimulus. “It really is a unique period of uncertainty. But along some dimensions the uncertainty will diminish in the autumn because we’ll know more about the outlook for 2021,” Lane told The Wall Street Journal .
New local lockdown rules are set to be introduced for England, with Liverpool expected to face the toughest restrictions.
KPN /zigman2/quotes/200683801/delayed NL:KPN -0.83% shares shot up 7% after Bloomberg News reported that private-equity group EQT /zigman2/quotes/214213438/delayed SE:EQT -2.75% was considering a takeover offer for the Dutch telecom.
Daimler shares rose 2% as Goldman Sachs upgraded the automobile maker to buy from sell, the latest brokerage to become more optimistic on the maker of Mercedes-Benz cars.
Société Générale /zigman2/quotes/206663756/delayed FR:GLE -1.86% shares rose 3% as Jefferies upgraded the French bank to buy from hold, citing its expectations on higher French banking revenue, lower costs, and better dividends.
Euronext /zigman2/quotes/208368645/delayed FR:ENX +0.39% fell 3%, falling for a second day after agreeing to buy Borsa Italiana from the London Stock Exchange for €4.3 billion. Analysts at UBS said Euronext paid more than they had anticipated and the forecasted cost synergies are less than anticipated.