European stocks were roughly flat on Wednesday; Earnings in focus
European stocks were roughly flat on Wednesday as countries around the world report rises in new coronavirus cases, while a fresh U.S. relief package hits an impasse in Washington.
The pan-European Stoxx 600 hovered just below the flatline in early trade, with retail stocks adding 1.2% while oil and gas dropped 0.8%.
U.S. Senate Majority Leader Mitch McConnell unveiled Senate Republicans’ proposed $1 trillion coronavirus aid bill on Monday, but Democrats have criticized the package’s limitations compared to a $3 trillion proposal that passed the House of Representatives in May. Complicating matters further, President Donald Trump on Tuesday voiced disagreement with some aspects of the bill, though talks are continuing.
Tuesday was the second consecutive day that the U.S. reported more than 1,000 fatalities, while China reported 101 new cases of Covid-19 on Wednesday, its sharpest daily increase for more than three and a half months.
Hong Kong Chief Executive Carrie Lam has warned that the city faces an outbreak that could lead to the “collapse” of its hospital system, with 106 new cases reported Tuesday. In France, confirmed cases rose to 183,804 from 183,079 on Monday.
On a more positive note, Pfizer and Moderna have each begun phase three trials of their respective vaccine candidates, eyeing launches by the end of the year.
Investors will also be monitoring the outcome of the U.S. Federal Reserve’s latest monetary policy meeting, with Chairman Jerome Powell expected to reiterate the central bank’s dovish stance later on Wednesday.
Earnings in focus
Back in Europe, Deutsche Bank on Wednesday reported a smaller-than-expected net loss attributable to shareholders of 77 million euros ($90.3 million) for the second quarter of 2020, while increasing its credit loss provisions to reflect the expected impact of the coronavirus pandemic. Germany’s largest lender upgraded its 2020 revenue guidance and said its transformation efforts are well on track, sending the stock 1.7% higher in early trade.
Barclays posted net income of £695 million ($765.64 million) for the first half of 2020, while increasing its coronavirus-related provisions. The British lender’s shares slid 1%.
At the top of the Stoxx 600, French engineering company Spie rallied 9% after beating first-half revenue and profit expectations. At the other end of the European blue chip index, Network International plunged 10.7% after a £205 million ($265.5 million) share placing.