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European markets pulled back slightly on Wednesday, with corporate earnings season in full swing and a European Central Bank meeting ahead.

The pan-European Stoxx 600 was down 0.2% in early trade, with tech stocks shedding 1.7% to lead losses while health care stocks added 0.7%.

The European blue chip index ended Tuesday 1.4% higher, hitting its highest level since Sept. 19.

However, banking stocks closed down 0.3% amide mixed earnings, with UBS beating market expectations but seeing profits slide. The same pattern was reported at HSBC.

Deutsche Bank reported early Wednesday, and also surpassed analyst forecasts. Other European companies to report include Barclays, Standard Chartered, Mercedes Benz, Heineken and Reckitt Benckiser.

Investors will be also looking ahead to Thursday’s European Central Bank meeting, at which it is widely expected to raise rates by 75 basis points; and for clues on its path towards quantitative tightening, as the EU heads for a likely recession.

Meanwhile, sterling rose to its highest level this month, trading at $1.1481 at 8:00 am in London, after Rishi Sunak took office as the new UK prime minister.

US stocks rally Tuesday for a third straight day as soft economic data indicated the Fed may not need to be so aggressive with rate hikes, though stock futures were lower Wednesday morning after Alphabet earnings disappointed.

A slew of US companies will report Wednesday, including Meta, Coca Cola and McDonalds, and data is due on weekly mortgage applications, wholesale inventories and new home sales.

Asia-Pacific markets were higher on Fed expectations and comments from the China Securities Regulatory Commission on creating a “regulated, transparent open, lively and resilient” market.

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