European Stocks Mixed; Miners Weigh Ahead of Fed Meeting

This post was originally published on this site – European stock markets traded in a mixed fashion Tuesday, with investors focusing on the ongoing corporate earnings season ahead of the start of an eagerly-awaited Federal Reserve meeting.

At 4 AM ET (0900 GMT), the DAX in Germany traded 0.4% higher, the CAC 40 in France was largely flat, while the U.K.’s FTSE 100 dropped 0.6%.

European stock indices posted gains through much of last month, helped by a generally positive earnings season, but the news has been more mixed Tuesday.

AP Moeller – Maersk (CSE:MAERSKb) stock rose 0.2% after the shipping giant tripled its quarterly profit. It also said it will increase its existing buyback program by $5 billion, expecting exceptionally high shipping rates to stay strong through the first quarter of next year at least.

Fresenius (DE:FREG) stock rose 4.7% after the German health care company outlined plans to restructure its Fresenius Medical Care (NYSE:FMS) business, including cutting up to 5,000 full-time jobs. HelloFresh (DE:HFGG) soared over 14% after the meal-kit delivery firm raised its 2021 sales forecast.

Dragging the FTSE 100 index down, in particular, was the heavily-weighed resources sector with iron ore prices down another 5% in China today, unwinding all of its pandemic rally. BHP Group (LON:BHPB) stock fell 3.8%, Rio Tinto (NYSE:RIO) stock dropped 3% and Anglo American (LON:AAL) stock was 3.9% lower.  

BP (NYSE:BP) stock fell 2.2% despite the energy giant stating it would buy back an additional $1.25 billion of shares after posting a strong rise in profit, while Standard Chartered (OTC:SCBFF) stock dropped over 6% despite reporting a stronger-than-expected pre-tax profit for the third quarter.

Away from the corporate sector, the Fed’s two-day policy-setting meeting starts later Tuesday, with the central bank widely expected to start winding down its $120 million monthly bond-buying program. 

The Fed will likely have to update its thinking about rising prices, and consequently about when it will start raising interest rates, as inflation is running at a 30-year high. What it says on this subject will be an important determinant of risk appetite in the weeks ahead.

In economic news, the German manufacturing PMI for October fell to 57.8, a small drop from the 58.2 level in September.  

Crude prices stabilized at the recent high levels Tuesday with preliminary October output data for the top producers suggesting the global supply situation remains tight.

The Organization of the Petroleum Exporting Countries meets with allies including Russia later this week to discuss their production levels.

According to a Reuters survey, the group increased output by 190,000 barrels per day over the month, below the 254,000 b/d they could have increased output by under their current deal. 

The American Petroleum Institute will also release its latest U.S. crude oil supply data at 4:30 PM ET.

By 4 AM ET, U.S. crude futures traded 0.1% lower at $83.94 a barrel, while the Brent contract rose 0.2% to $84.85. 

Additionally, gold futures were largely unchanged at $1,795.75/oz, while EUR/USD traded 0.2% lower to 1.1587.