EUROPE MARKETS: European Markets Mixed As U.S. Ratchets Up Trade Threat
02 Juli 2019 - 12:14PM
Dow Jones News
By Dave Morris
European equities were mixed Tuesday as U.S. officials increased
the pressure on the European Union over alleged subsidies to
airplane maker Airbus SE.
How did markets perform?
The Stoxx 600 was at 388.5, up 0.2%. On Monday it closed 0.8%
higher.
The U.K.'s FTSE 100 increased 0.5% to 7,535.1, adding to
Monday's move up 1%.
The pound retreated 0.3% to $1.2610, after falling 0.6%
Monday.
In Germany, the DAX was 0.1% lower at 12,505.6. It closed 1%
higher Monday.
France's CAC 40 was 5,567.2, leaving it essentially flat. On
Monday it edged up 0.5%.
Italy's FTSE MIB came in at 21,267, ticking up 0.1%. It also
rose 0.1% on Monday.
What's moving the market?
The Office of the U.S. Trade Representative added another 89
items to the list
(https://www.wsj.com/articles/u-s-proposes-more-european-tariffs-pending-airbus-case-11562026415)
of products from the European Union that could become subject to
tariffs. The World Trade Organization is currently hearing a case
against Airbus SE (AIR.FR) over whether it violated
anti-protectionist rules around receiving government support. The
new items bring the potential annual cost of the U.S. tariffs to
approximately $21 billion a year.
The G-20's jolt of optimism around U.S.-China trade was tempered
Tuesday as investors weighed the likelihood of an actual
breakthrough. An official commentary by Chinese state media outlet
Xinhua
(http://www.xinhuanet.com/english/2019-07/01/c_138189987.htm)
included a statement noting that the agreement to resume talks does
not necessarily mean a deal to end the trade tension is
imminent.
In economic data, the U.K. saw a sizable miss in the IHS Markit
construction purchasing managers index (PMI) survey for June,
coming in at 43.1 versus 49.3 predicted in a Thomson Reuters poll
of economists. Brexit uncertainty was widely cited as a key factor
in the weak figure, which is the lowest since April 2009.
Which stocks are active?
Jupiter Fund Management PLC (JUP.LN) shares dropped 7% following
the asset management firm's announcement that one of its top fund
managers, Alexander Darwall, had set in motion plans to launch his
own firm
(https://www.fnlondon.com/articles/jupiters-european-star-manager-will-quit-to-launch-own-business-20190701)
pending approval from British regulators. Darwall's main European
equities fund, which has assets of GBP5.5 billion, posted a 46.7%
return over three years, compared with 38.7% for the relevant
benchmark, the FTSE World Europe ex-UK index.
Funding Circle Holdings PLC (FCH.LN) shares plummeted 18% when
the online small-business loans platform issued guidance that it
was downgrading its expectations for full year revenue growth
(https://www.fnlondon.com/articles/funding-circle-stock-tanks-as-company-cuts-revenue-target-20190702).
The young company, whose shares are down nearly 66% since their
initial public offering in 2018, said it had applied more stringent
guidelines on lending to higher-risk clients due to rising economic
uncertainty.
Russ Mould, investment director at AJ Bell, wrote: "Tightening
the lending criteria is probably a good move as it will reduce
exposure to higher risk loans and potentially lower the amount of
bad debt. But this is also likely to further temper growth."
A hotly anticipated rheumatoid arthritis drug
(http://www.marketwatch.com/story/wall-street-is-buzzing-about-gileads-new-rheumatoid-arthritis-drug-heres-why-2019-03-29))
developed by two pharmaceutical firms, Gilead Sciences Inc. (GILD)
and Galapagos NV (GLPG.AE), will be put before the U.S. Food and
Drug Administration for approval this year, Gilead said Monday.
Galapagos shares are up 6.6%.
(END) Dow Jones Newswires
July 02, 2019 05:59 ET (09:59 GMT)
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