By Dave Morris
European markets were unusually calm Monday as investors contemplated whether central banks would save them from the impacts of the continuing U.S.-China trade battle.
How did markets perform?
The Stoxx 600 /zigman2/quotes/210599654/delayed XX:SXXP -1.17% was flat at 378.9, after declining 0.4% Friday.
The U.K.’s FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX -1.43% was also flat at 7,345.6. On Friday it moved down 0.3%.
The pound /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.4950% was likewise flat at $1.2592. It sank Friday by 0.6%.
In Germany, the DAX /zigman2/quotes/210597999/delayed DX:DAX -1.28% ticked up 0.1% to 12,107.7 It slid 0.6% Friday.
France’s CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 -1.38% reached 5,377.3, an increase of 0.2% after decreasing 0.1% Friday.
Italy’s FTSE MIB /zigman2/quotes/210598024/delayed IT:I945 -1.01% rose 0.2% to 20,661.1. On Friday it nudged 0.1% lower.
What’s moving the markets?
U.S. Commerce Secretary Wilbur Ross played down the prospect of a China-U.S. trade deal emerging from the G-20 summit in Japan if U.S. President Donald Trump and Chinese President Xi Jinping ultimately do hold talks. Ross said the “most that might come” is new ground rules for the negotiations or possibly a schedule of future discussions.
Investors will be watching and positioning themselves ahead of a busy week for central bank meetings, as some fear trade tensions are nudging the global economy toward recession. Others, however, are skeptical that the U.S. Federal Reserve will cut its policy rate Wednesday, as unemployment is at record lows and inflation is running close to the Fed’s target.
The Bank of England is also set to hold a meeting, but economists are expecting it to keep its base rate at 0.75% amid Brexit uncertainty. The Bank has been on a path of tightening monetary conditions, but poor economic data including GDP figures showing the economy contracted by 0.4% in April have led to predictions that the Bank will hold steady.
Which stocks are active?
Negative news from Deutsche Lufthansa AG /zigman2/quotes/205496028/delayed DE:LHA -0.51% affected U.K. airlines. Shares plunged 11.4% as it slashed its projections for 2019, citing overcapacity and stiff competition in the air travel market. As a result, EasyJet PLC /zigman2/quotes/202825892/delayed UK:EZJ -2.19% sank 5.2% while Ryanair Holdings PLC /zigman2/quotes/205429530/delayed IE:RY4C -0.94% declined 4.2%.
Royal Mail PLC /zigman2/quotes/204213037/delayed UK:RMG -1.83% ticked upward by 2.4% after Bernstein analysts upgraded its shares to outperform and highlighted the strength of its European parcels business, GLS. Shares over the past 52 weeks have cratered 59.2%.