Stock markets mostly fell yesterday as investors digested one of the busiest days of the US corporate earnings season, while oil prices edged back after flirting with six-month highs.
Across Europe, London’s FTSE 100 fell 0.5% to close at 7,434.13 points; Frankfurt’s DAX 30 was down 0.3%, while Paris’s CAC 40 lost 0.3% at 5,557.67.
Briefing.com analyst Patrick O’Hare summed up the results from the US behemoths as “the good, the bad and the ugly”.
In the ugly column was industrial products manufacturer 3M, which announced weaker-than-expected profits and job cuts due to falling sales, helping to drive the Dow Jones Industrial Average down 0.4% in midday trading on Wall Street.
On the good side of the ledger were Microsoft — which became just the third tech giant to reach the trillion-dollar value mark — and Facebook, with the two titans bolstering the tech-rich Nasdaq Composite Index.
Analysts were also encouraged by US data showing an unexpected jump in durable goods in March.
However European markets closed solidly in the red after the collapse of two mega-mergers in the supermarket and banking industries.
And oil prices neared six-month highs amid supply concerns stoked by the US tightening the screws on sanctions-hit Iran.
“Brent crude oil has rallied above $75 a barrel for the first time this year on the back of tighter sanctions on Iran, while gains in West Texas Intermediate (WTI) have been curtailed by a surge in US supply,” noted Dean Popplewell, markets analyst at Oanda trading group.
Brent North Sea crude for delivery in June jumped to $75.60 per barrel, the highest level since the end of October, before falling back.
West Texas Intermediate (WTI) prices reached $66.28 per barrel — just 0.03 cents away from its own six-month high — before also dropping back.
The US removal this week of waivers that allowed countries to buy oil from sanctions-hit Iran is expected to hit supplies, though analysts are keeping watch on the region and whether Opec responds by opening up the taps.
While the mood on trading floors remains broadly positive, there are lingering concerns that growth in most parts of the world is well off the pace of the US.
European stock markets closed solidly down, with shares in Deutsche Bank down 2.1% and Commerzbank dropping 2.4% after Germany’s two biggest lenders ended merger talks.
British supermarket Sainsbury’s meanwhile slid 4.7% after the UK’s competition watchdog blocked its proposed merger with Walmart-owned Asda.
Asian markets also stuttered following some weak economic data.
In foreign exchange news, the euro dropped to $1.1118, its lowest level against the dollar since June 2017, before rebounding slightly.
“The euro is cheap, dragged down by weak growth, political uncertainty and two-year bond yields that are even lower than Japan’s,” said Kit Juckes, macro strategist at French bank Societe Generale.
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