EUROPE MARKETS: European Stocks Inch Higher With Data, Earnings Deluge In Focus
May 15 2018 - 12:35PM
Dow Jones News
By Sara Sjolin, MarketWatch
Iliad tanks after disappointing earnings
European stocks ended a volatile session slightly higher on
Tuesday, as traders digested a mixed bag of economic data and a
deluge of corporate news.
Italian stocks advanced as talks between two antiestablishment
parties continued.
What are markets doing?
The Stoxx Europe 600 index rose 0.1% to close at 392.37, after
swinging between small gains and losses throughout the day.
Italy's FTSE MIB index rose 0.3% to 24,297.17 as traders
continued to watch developments in Italian politics.
Germany's DAX 30 index fell 0.1% to 12,970.04, while France's
CAC 40 rose 0.2% to 5,553.16.
The U.K.'s FTSE 100 index ended 0.2% higher at 7,722.98
(http://www.marketwatch.com/story/uk-stocks-flutter-as-jobs-data-loom-2018-05-15).
The euro was down at $1.1865 compared with $1.1929 late Monday
in New York. The pound traded at $1.3510, down from $1.3556 on
Monday.
The two currencies lost momentum against the dollar after a
strong U.S. retail report
(http://www.marketwatch.com/story/dollar-rises-a-second-day-as-trade-talks-retail-data-take-center-stage-2018-05-15).
What's driving markets?
The indecisive trading action on Tuesday came after a raft of
economic data. Eurozone gross domestic product numbers met
expectations, while German economic sentiment figures missed
forecasts. In the U.K., the unemployment rate remained at a 42-year
low.
Meanwhile, Italian politics remained in focus. Last minute
hiccups have emerged in the plans by the populist 5 Star Movement
and League parties to form a coalition, with the main sticking
point appearing to be who to nominate to the role of prime
minister.
What are strategists saying?
"Some very radical populist ideas are being floated [in Italy]
such as flat income tax at 15% (League) and guaranteed income for
the poor (Five Star). These ideas will not sit well in Brussels or
the bond market," said economists at Danske Bank in a note on
Tuesday.
"In terms of market reaction, after years of fear over a
populist government in Italy, the bond market reaction has the
distinct air of nonchalance. Italian bond yields have risen only
moderately over other periphery or core debt," they added.
The yield on 10-year Italian government bonds was up 4 basis
points at 1.951% on Tuesday.
Stock movers
Iliad SA (ILD.FR) tanked 20% after a disappointing earnings
report
(http://www.marketwatch.com/story/iliad-q1-revenue-edges-up-on-mobile-business-2018-05-15)from
the French telecoms group. Iliad also said it's appointed Thomas
Reynaud as new chief executive officer, effective May 21.
Pandora A/S (PNDORA.KO) slumped 16% after the Danish jewelry
company reported a 15% drop in profit
(http://www.marketwatch.com/story/pandora-backs-guidance-despite-higher-costs-2018-05-15).
Merck KGaA (MRK.XE) slid 6.3% after the German chemicals and
pharmaceutical company said first-quarter sales declined
(http://www.marketwatch.com/story/merck-kgaas-sales-hit-by-currency-headwinds-2018-05-15),
hurt by currency headwinds.
Commerzbank AG (CBK.XE) put on 3.9% after the German lender said
profit rose 9.2% in the first quarter
(http://www.marketwatch.com/story/commerzbank-profit-rises-despite-sales-slump-2018-05-15).
Shares of Vodafone Group PLC (VOD.LN) (VOD.LN) dropped 4.3%
after the telecom giant said its chief executive Vittorio Colao
will step down
(http://www.marketwatch.com/story/vodafone-cfo-to-succeed-ceo-colao-in-october-2018-05-15)
and be succeeded by Chief Financial Officer Nick Read, effective
Oct. 1.
EasyJet PLC (EZJ.LN) rose 3.3% after the budget airline said its
pretax loss for the first half of fiscal 2018 narrowed
(http://www.marketwatch.com/story/easyjet-first-half-loss-narrows-on-higher-revenue-2018-05-15),
driven by record revenue a reduction in capacity by other
airlines.
Economic data
The German ZEW economic sentiment gauge stayed at negative 8.2
in May, missing forecasts of a negative 7.8 reading.
Staying in Germany, gross domestic product for the first quarter
expanded 1.6% year-over-year
(http://www.marketwatch.com/story/german-labor-issues-dent-economic-growth-2018-05-15),
below forecasts of a 1.7% reading and down from 2.3% in the
previous quarter.
GDP in the eurozone grew 0.4% quarter-on-quarter, confirming the
preliminary reading.
In France, the statistics agency Insee lifted its estimate of
2017 GDP growth to 2.2%
(http://www.marketwatch.com/story/france-raises-2017-gdp-growth-estimate-to-22-2018-05-15)
from the 2% estimated previously.
In the U.K., the Office for National Statistics said the
unemployment rate remained at 4.2% in March, while wages excluding
bonuses rose 2.9%.
(END) Dow Jones Newswires
May 15, 2018 12:20 ET (16:20 GMT)
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