EUROPE MARKETS: Europe Stocks Tread Water With An Eye On The Fed Meeting
September 26 2018 - 10:21AM
Dow Jones News
By Barbara Kollmeyer, MarketWatch
Daimler, Deutsche Bank under pressure
Europe's main stock gauge was struggling Wednesday, with some
losses for banks and German auto maker Daimler AG, but investors
were largely sidelined ahead of the Federal Reserve decision.
What are markets doing?
The Stoxx Europe 600 edged up less than 0.1% at 384.16, after
Tuesday's gain of 0.5% in the previous session
(http://www.marketwatch.com/story/europe-stocks-back-in-the-green-boosted-by-major-oil-companies-2018-09-25).
Germany's DAX 30 dropped 0.3% to 12,341.69, while France's CAC
40 added 0.4% to 5,499.62. The U.K.'s FTSE 100 dipped 0.1% to
7,502.14.
The euro dipped to $1.1744 from $1.1735 late Tuesday in New
York, while the pound dipped to $1.3166 from $1.3184.
What is driving the market?
Investors are looking ahead to the outcome of the Fed's
policy-setting Federal Open Market Committee meeting, which is
expected to deliver a third rate increase this year. The decision
is due at 2 p.m. Eastern, followed by Chairman Jerome Powell's news
conference at half-hour later.
Read: U.S. economy could take a 2% hit in the first year of a
trade war, says ECB study
(http://www.marketwatch.com/story/global-trade-war-could-hit-us-hardest-ecb-study-2018-09-26)
The U.S. Fed's decision is watched by European investors because
monetary policy moves in the largest economy in the world influence
Europe trade.
Meanwhile, the expected presentation of Italy's budget on
Wednesday was keeping some traders on edge. If the budget doesn't
adhere to European Union rules, some are worried it could cause a
rift between Italy's government and Brussels. In addition, Italy's
ruling coalition has been seeped in infighting.
Read:What the market will watch for in Italy's crucial budget
proposal this week
(http://www.marketwatch.com/story/what-the-market-will-watch-for-in-italys-crucial-budget-proposal-in-the-coming-week-2018-09-21)
(http://www.marketwatch.com/story/what-the-market-will-watch-for-in-italys-crucial-budget-proposal-in-the-coming-week-2018-09-21)
What are strategists saying?
"Traders are expecting two further rate increases by the end of
the year plus two more for the first half of 2019. If there was to
be a surprise, it should come from the FOMC wording toward its
monetary policy during the press conference," said Pierre Veyret,
technical analyst at ActivTrades, in a note to clients.
As we have already argued, a final decision to implement an
expansionary fiscal policy--increasing the structural budget
deficit, compared with this year--to finance the measures included
in the government "contract", is likely to result in a negative
market reaction and increases the chances of a confrontation with
the European Commission," said analysts at UniCredit Research, in
reference to the Italy budget announcement.
Stock movers
Daimler AG (DAI.XE) dropped 0.7% after announcing Chief
Executive Dieter Zetsche will exit his position
(http://www.marketwatch.com/story/daimler-ceo-zetsche-stepping-down-shares-fall-2018-09-26)
after its annual 2019 shareholder meeting.
Banco Santander SA (SAN.MC) (SAN) inched up 0.4% after
announcing late Tuesday
(http://www.marketwatch.com/story/santander-poaches-new-ceo-from-ubs-former-head-of-investment-banking-andrea-orcel-2018-09-26)that
it has hired the former head of investment banking at UBS, Andrea
Orcel to be its new chief executive officer. UBS (UBS) shares fell
0.4%.
Deutsche Bank AG (DBK.XE) (DBK.XE) dropped 1.3% after a report
that the German bank had looked at a potential merger with
Commerzbank AG
(http://www.marketwatch.com/story/deutsche-bank-looked-at-merging-with-ubs-report-2018-09-25)(CBK.XE),
whose shares slipped 0.4%.
Heavyweight pharmaceutical major Roche Holding Ltd. (ROG.EB)
dropped 2%.
(END) Dow Jones Newswires
September 26, 2018 10:06 ET (14:06 GMT)
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