European stocks ended the session little changed on Wednesday, as investors were focused on Federal Reserve Chairman Jerome Powell and Bank of England Gov. Mark Carney, who spoke after the close.
How are the markets performing?
The Stoxx Europe 600
ended little changed at 357.39, after closing up 0.2% on Tuesday.
The German DAX
slipped 0.1% to close at 11,298.88, while the French CAC
finished unchanged at 4,983.24. The FTSE 100
ended Wednesday 0.2% lower at 7,004.52.
The British pound
soared to $1.2839, from $1.2745 late in New York on Tuesday and the euro
climbed 0.8% to $1.1383, as both currencies benefited from weakness in the U.S. dollar.
What is driving stocks?
European investors were keeping a close eye on geopolitical events, notably a meeting planned for U.S. President Donald Trump and President Xi Jinping of China at the G-20 summit in Buenos Aires this weekend. Trump economic adviser Larry Kudlow said Tuesday that there was a good possibility for a deal but also that the White House was disappointed in the Chinese response so far.
Besides trade, central banks were in focus with remarks from both the Federal Reserve and the Bank of England scheduled for after the European close.
In the U.K., the BOE’s stress test results showed a resilience of the financial sector. However, the central bank’s worst case scenario of a no-deal Brexit without a transition period saw British gross domestic product 7.75%-10.5% lower by the end of 2023 versus the May 2016 trend.
In the U.S., the Fed warned of corporate debt burdens in its first-ever financial stability report, and Chairman Jerome Powell’s comments sparked a stock market rally when saying that interest rates were “just below” the neutral rate.
What stocks are active?
In the energy sector, BP PLC
ended just 0.1% lower after being down more than 1% during the session. Similarly, Royal Dutch Shell Group PLC
dropped as much as 1.2% during active trading, but closed just 0.2% lower.
Among banks, another weak sector, Holdings PLC
finished 0.5% down.
Meanwhile in the consumer goods sector, Reckitt Benckiser Group PLC
dropped 1.9% into the close.
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