EU leaders retreated on Friday morning as EU leaders prepared to discuss an agreement on the block’s major coronavirus recovery package, while US cases are still ongoing.
After a cautiously optimistic open, the Pan-European Stokes 600 slipped 0.2% below the flatline in trading around an hour. Autos jumped 1.7%, while banks and travel stocks fell 1.4% to lead the loss.
European stocks are set to follow a cautious tone seen overnight in Asia, where markets were a mixed bag in trading on Friday afternoon.
European Union leaders will meet in Brussels on Friday to see a proposed 750 billion euro ($ 853.8 billion) deal that could face opposition from the “frugal four” member states of Austria, Denmark, Sweden and the Netherlands. The bill could also be subject to a Hungarian veto, which has opposed linking the distribution of wealth with the EU’s adherence to democratic values.
Market attention is also linked to the continued rise of coronovirus cases in the US, with a Reuters report on Thursday at 77,000 new cases, a new daily record so far.
US unemployment claims data also fell slightly on Thursday, as the figure for initial jobless claims for the week ending July 11 was 1.3 million, the Labor Department said, missing expectations from economists for 1.25 million new filings by Dow Jones Were.
China-US tensions have also been affected, citing a report on China-Thursday. US President Donald Trump’s administration is imposing travel restrictions on all members of the ruling Chinese Communist Party (CCP) and their families.
The Institute for International Finance said in a report on Thursday that global debt rose to a record $ 258 trillion in the first quarter of 2020, 331% of global gross domestic product (GDP), and continued to grow.
In Europe, British Airways has retired its entire fleet of Boeing 747 aircraft due to declining global travel demand, which was brought on by worldwide shutdown measures during the epidemic.
The earnings season continues to gather steam, with Daimler revealing ahead of its July 23 earnings report that it would expect a slightly higher operating loss of EUR 1.68 billion for the second quarter. The German automaker also announced on Thursday that it would cease production of Mercedes-Benz sedans in the US and Mexico to cut costs. Daimler’s shares rose 4.2% in early trade, leading to a broader rally for the automotive sector.
Rio Tinto reported a 1.5% increase in iron ore shipments on Friday, citing an improvement in demand from China as the world’s second-largest economy emerges from the coronovirus epidemic. The stock of British metals and mining giants is 0.7% higher.
Danske Bank beat expectations for second-quarter net profit, but warned of further job cuts as part of a four-year cost-cutting strategy, as Danish lender overcame the 2017 Estonian money-laundering scandal Makes efforts. The bank’s stock rose 1.5% in early trade.
Ericsson also beat profit estimates on the back of strong margins on telecom equipment sales, allowing the Swedish company to reaffirm its 2020 and 2022 financial guidance and send the stock 8% higher to the top of the Stocks 600.
Swedish real estate company Samhällsbyggnadsbolaget fell 6% at the other end of the European blue-chip index.
On the data front, the euro zone industrial production and inflation figures for June are at 10pm London time.