Home > Business > European stocks softer in aftermath of Fed Chair Powell’s comments

European stocks softer in aftermath of Fed Chair Powell’s comments


European stocks struggled on Friday, following sharp losses for Wall Street after Federal Reserve Chair Jerome Powell indicated the central bank wasn’t ready to stem rising long-term bond yields.

Investors are also looking out for U.S. jobs data due later.

Paring earlier losses as U.S. equity futures turned positive, the Stoxx Europe 600

slipped 0.2% to 411.26 and was up 1.6% on the week. The German DAX

and French CAC 40

fell 0.5% and 0.3% each and the FTSE 100

rose 0.4%. The euro

and pound

were both falling as the dollar


Read: China sets economic-growth target of 6%, aims to be more self-reliant on tech

U.S. stock futures



steadied following Thursday’s technology-led rout. The Fed’s Powell said a disorderly move in the bond market would be concerning, but didn’t suggest that the central bank was alarmed yet, in comments made at The Wall Street Journal Jobs Summit.

Investors are worried bond yields will keep climbing amid his apparent lack of concern and, in turn, pressure stocks.

“The markets wanted hints as to what the central bank would do if the situation worsens, and when that didn’t materialize, equities took a hit,” said Connor Campbell, financial analyst at Spreadex, in a note to clients. “That’s fed into a rough European open, confirming whatever rebounding hopes opened the week (and month) have completely disappeared.”

Bonds remained under pressure. The yield on the 10-year Treasury note

was hovering at year highs of 1.55%, while the yield for the German 10-year

bund was up one basis point to -0.295%, a level not seen since roughly last June.

Economic data due later are expected to show 210,000 U.S. jobs were added last month, according to economists surveyed by Dow Jones and The Wall Street Journal. In Europe, German manufacturing orders rose by a better-than-expected 1.4% in January, following a revised 2.2% drop in December.

As for European stocks on the move, weakness was spread across almost all sectors, with airline stocks under pressure. Shares of Deutsche Lufthansa
International Consolidated Airlines
which operates British Airways and other carriers, and Ryanair


were down over 3% each.

Energy companies failed to get a lift from rising crude futures
up more than 1%. U.S. prices posted their highest finish since 2019 on Thursday, after the Organization of the Petroleum Exporting Countries and its allies said they would rollover current production cuts to end-April. Royal Dutch Shell shares


fell 0.6% and those for BP


were barely higher.

Dassault Aviation

shares fell 3%, after the French aircraft manufacturer said profit and revenue fell in 2020 as the aviation industry continues to struggle under the weight of the COVID-19 pandemic. Dassault did say it said expects higher sales in 2021. Shares of rival Airbus

fell by roughly the same.

Shares of the London Stock Exchange

fell 5%. The exchange operator said 2020 pretax profit rose 5.2% on the back of higher revenue, and declared an increased dividend. But net profit came in 5% below consensus on a heavier tax charge, noted Citi analyst Andrew Coombs.

“2021 revenue guidance seems to be in-line with expectations, but cost guidance appears heavier than expected. There is also no update on the existing financial targets. On balance a disappointing set of results,” said Coombs, in a note to clients.

Source link

TAGS , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,
Hi guys, this is Kimmy, I started LicensetoBlog to help you with the latest updated news about the world with daily updates from all leading news sources. Beside, I love to write about several niches like health, business, finance, travel, automation, parenting and about other useful topics to keep you find the the original information on any particular topic. Hope you will find LicensetoBlog helpful in various ways. Keep blogging and help us grow as a community for internet lovers.