EUROPE MARKETS: European Markets Rise To Welcome Lagarde As ECB President
03 Juli 2019 - 12:21PM
Dow Jones News
By Dave Morris
European markets reacted enthusiastically to the news that
International Monetary Fund Managing Director Christine Lagarde
would take over the region's central bank.
How did markets perform?
The Stoxx 600 was 0.7% higher at 392, after rising 0.4%
Tuesday.
The U.K.'s FTSE 100 rose 0.7% to 7,608.8. On Tuesday it ticked
up 0.8%.
The pound edged down 0.2% to $1.2570. It also declined 0.5%
Tuesday.
In Germany, the DAX climbed 0.7% to 12,620.2. It closed flat on
Tuesday.
France's CAC 40 increased 0.6% to 5,608.7. It edged up 0.2%
Tuesday.
Italy's FTSE MIB jumped 1.2% to 21,648.7, after moving up 0.7%
Tuesday.
What's moving the markets?
The European Commission broke the deadlock over several top
appointments, with reports emerging Tuesday that German Defense
Minister Ursula von der Leyen would be named EC President, and in
something of an unexpected development, that long-serving
International Monetary Fund Managing Director Christine Lagarde
would head the European Central Bank
(http://www.marketwatch.com/story/imfs-christine-lagarde-wins-eu-support-to-lead-european-central-bank-2019-07-02-131033418).
Outgoing ECB President Mario Draghi's term ends October 31, and
both the EC and ECB roles will be subject to a formal confirmation
process.
Bond markets in Europe broadly rallied, which was perceived
partly as an indication that Lagarde was expected to continue the
ECB loose monetary policy stance in the face of slowing growth. At
the individual country level, Italian bonds were buoyed by news
that its coalition government had restrained its spending plans to
keep it in line with European Union budget rules, while a speech by
Bank of England Chairman Mark Carney signaled to investors that the
bank might loosen the tightening bias of its monetary policy.
U.S. President Donald Trump put forward another two nominees to
the board of the U.S. Federal Reserve
(http://www.marketwatch.com/story/trump-nominates-christopher-waller-judy-shelton-for-fed-board-2019-07-02),
choosing Judy Shelton and Christopher Waller. Shelton, as a staunch
critic of the Fed's role in the economy, is likely to prove the
more controversial of the two candidates. Trump's previous two
nominees, Stephen Moore and Herman Cain, dropped out of
consideration amid widespread criticism.
In economic data, Purchasing Managers' Index (PMI) surveys
proved mostly underwhelming. While the Markit Eurozone PMI
composite reading for June was slightly above its modest
expectations at 52.2 versus 52.1 expected, both China and the U.K.
missed in terms of services. China's Caixin services PMI for June
was 52
(http://www.marketwatch.com/story/caixin-chinas-services-growth-slowed-in-june-2019-07-02),
compared to 52.7 expected by a consensus of economists, and the
U.K.'s CIPS services PMI for June was 50.2 versus a consensus
reading of 51.
Which stocks are active?
Online real estate agency Purplebricks Group PLC (PURP.LN)
reported a pretax loss for fiscal 2019 that was larger than the
previous year. The pretax figure wes GBP56 million, versus GBP29.2
million in fiscal 2018. The company also said it had decided to
exit from the U.S. market
(http://www.marketwatch.com/story/purplebricks-to-exit-us-market-posts-loss-2019-07-03)
after generating lower than expected revenues. Shares rose 2.8% on
the news.
U.K. grocer J Sainsbury PLC (SBRY.LN) first quarter fiscal 2020
results were hit by its clothing business
(http://www.marketwatch.com/story/j-sainsbury-total-retail-sales-fall-12-2019-07-03),
with total retail sales retreating 1.2%. Russ Mould, investment
director at AJ Bell, wrote: "This isn't an inspiring update as
every single sales metric is pointing downward. But is it really a
surprise? We already know the supermarket sector is highly
competitive and Sainsbury's is stuck in the middle--being too
expensive for value shoppers and not perceived as high enough
quality for the premium shoppers." Sainsbury's shares ticked up
0.2%.
Unite Group PLC (UTG.LN) has agreed to buy Liberty Living Group
PLC
(http://www.marketwatch.com/story/unite-group-buys-liberty-living-for-177-billion-2019-07-03)from
a Canadian pension fund for GBP1.4 billion. The deal for the
student accommodation business will be a combination of cash and
stock. Unite Group stock rose 2.4%.
(END) Dow Jones Newswires
July 03, 2019 06:06 ET (10:06 GMT)
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