By Peter Nurse
Investing.com – European stock markets drifted lower Wednesday, amid a torrent of earnings while investors wait for the U.S. to agree its latest stimulus package.
At 3:55 AM ET (0755 GMT), the in Germany traded 0.5% higher, the in France rose 1% and the U.K.’s index was up 0.6%.
A day after European leaders signed off on their historic 750 billion-euro ($860 billion) recovery package to revive the countries hard hit by the Covid-19 pandemic, as well the bloc’s next seven-year budget, worth about 1.1 trillion euros, the focus now turns to the ratification process.
“We do not expect the national parliaments to become a hurdle, but the EU parliament may likely be disappointed regarding the size of the final budget,” said analysts at Danske Bank, in a research note.
Attention is also on the ongoing earnings season, with Kingfisher (LON:) stock soaring 10% after the home improvement retailer said it expected half-year pretax profit to be ahead of the prior year, as demand bounced back amid an easing of lockdowns.
ABB (SIX:) stock climbed 2.6% after the Swiss supplier of electrical equipment said it was launching a share buyback program following the completion of the divestment of its Power Grids business to Hitachi (OTC:).
On the flip side, French car parts maker Valeo (PA:) stock fell 8.2% after it swung to a massive loss in the first half of 2020, including 622 million euros of restructuring charges, and also warned that it’s seeing a slower recovery in Europe than in China and the U.S.
Melrose Industries (LON:) slumped over 15% after warning that some job cuts are “inevitable” as revenues plunged 27% in the first half of the year, and suspending its dividend.
In the U.S., uncertainty reigns over the immediate prospects for more financial aid. In addition to major differences between the two main parties, Senate Republicans appear to be at odds both themselves and with the administration over how to craft the package.
The debate comes amid signs that the economic recovery in the U.S. is leveling off amid a second surge in coronavirus cases.
The earning season continues there as well, with the focus on the likes of Tesla (NASDAQ:) and Microsoft (NASDAQ:), who are due to release numbers later Wednesday.
Elsewhere, oil prices retraced after a bigger-than-expected crude inventory build in the United States, suggesting a dent in demand from the world’s biggest oil consumer.
The American Petroleum Institute reported late Tuesday that U.S. inventories rose last week by 7.5 million barrels when expectations had been for a small draw.
At 3:55 AM ET, futures traded 0.7% lower at $41.61 a barrel, while the international benchmark contract fell 0.5% to $44.08.
Elsewhere, rose 0.5% to $1,853.55/oz, while traded at 1.1517, down 0.1% on the day.
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