European Markets View Latest Earnings with Caution

Bridgette Randall
05 Aug, 2022
Frankfurt

European markets traded sideways before and after the release of the keenly awaited July labor market survey in the U.S. 

Investors were cautious on the simmering tensions between the U.S. and China. 

China escalated its largest-ever military exercises near Taiwan and fired several missiles over the island nation. 

At least five missiles landed as far as the southernmost islands of Okinawa, Japan. 

China's foreign ministry placed sanctions on the U.S. House Speaker Nancy Pelosi and her immediate family members. 

The U.S. added 528,000 payrolls in July after adding 372,000 in June, the U.S. Bureau of Labor Statistics reported Friday. 

The sharply higher payroll additions were broad based and highlighted the strength in the labor market despite the economic slowdown but also raised the fears of larger interest rate hike at the next Fed's meeting.  

Germany's industrial output increased in June on a sequential basis, according to the latest data from the Federal Statistical Office or destatis.

The seasonally and calendar adjusted production expanded at a faster pace of 0.4% in June after growing at 0.1% in May despite the persistent supply chain problems and a four-decade high inflation. 

However, the factory production fell 0.5% from a year ago.  

Market sentiment win the region was subdued after the Bank of England issued negative views on the economy and guided longer and deeper recession starting as early as this year. 

The central bank also said inflation is likely to peak at 13% before turning lower. 

The DAX index fell 0.2% to 13,635.10, the CAC-40 index declined 0.3% 6,492.45, and the FTSE 100 index inched up 0.2% to 7,465.88.

London Stock Exchange Group gained 1.6% to 8,264 pence after the financial exchanges operator announced its plan to buy back its shares. 

WPP Plc plunged 9.5% to 813.20 pence after the advertising group reported sales growth but the worries of global economic slowdown weighed.  

Deutsche Post AG increased 5.5% to 42.15 euros after the parent of DHL posted better-than-expected quarterly results. 

Pirelli & C. SpA increased 4.4% to 4.44 euros after the tiremaker reported first-half sales rose 24.6% to 3.2 billion euros and net income surged 76% to 233.0 million from 131.6 million euros a year ago. 

The sales increase was driven by roughly 20% increase in prices and volume mix and the positive impact from the foreign exchange contributed 5% points. 

Tire tire sales volume increased 1% in the first-half. 

Credit Suisse Group AG fell 0.4% to 5.24 Swiss francs on the local news that the global financial services company is looking to eliminate "thousands" of positions.