European Equity Market Handover: Trump and May help brighten stocks’ day

Reassuring words from U.S. President Donald Trump and broad relief in Europe after the resignation of UK Prime Minister Theresa May encourage buyers back to global shares

Stock market snapshot as of [24/5/2019 2:05 PM]

  • More reassuring words from U.S. President Donald Trump towards the end of a bruising week, and broad relief in Europe after the resignation of UK Prime Minister Theresa May are two key factors encouraging buyers back to global shares
  • The sentiment seems to reach across markets: copper advances, after five days of losses in London, and investors also seem willing to loosen their grip on ‘safe’ Treasurys, enabling the 10-year yield to inch up to 2.33% from two-year lows.
  • The dollar is steady as emerging market currencies also get a break from selling
  • European indices and U.S. stock index futures also appeared to soak up comments from China’s Vice Premier Li Keqiang suggesting more fiscal stimulus is on the way
  • With public holidays on both sides of the Atlantic on Monday, the calendar alone may be enough to add some drag to this rebound into Friday’s close. There are few reasons to seek exposure to potential gaps on Tuesday’s open in the current geopolitical climate

Corporate News

  • Trump’s hint that banned Huawei might be a topic incorporated into a subsequent U.S.-China trade deal was cue for another flood of bargain stock picking in European techs – slanted towards semiconductors and hardware
  • However China-dependent mining stocks and shares in the broad industrials sphere, like aerospace groups, outperformed, taking each of their STOXX sub-sector indices up 1%
  • Energy shares also got a look in, as the U.S. marker WTI and global benchmark Brent bounced more than 1%. This had an eye as much to assessments of how the world demand outlook could be tempered by growth as to a natural tendency to bounce following Thursday’s mini supply shock
  • J.C. Penney is going against the recent big U.S. retailer trend with a 10% pre-market drop on a lack of traction for turnaround efforts. HP Inc. fared better with its own results reaction. Shares rose 3% due to top and bottom-line beats 

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