Volatile European Markets Lacked Direction On Mixed Corporate Earnings

Bridgette Randall
11 Aug, 2022
Frankfurt

European markets traded higher and investors digested a mixed bag of corporate earnings and German bond yields rose. 

In regional economic news investors reviewed the jobless rate in Sweden, Turkey's current account balance, and the home price direction in the U.K.  

 Sweden's unemployment rate in July edged up to 6.7% from 6.6% in June, according to the data released by the Swedish government agency Public Employment Service. 

The jobless rate was the highest since the 6.81% rate in April. 

Turkey's current account deficit in June narrowed to $3.45 billion from $6.57 billion, largely on the account of improvement in service surplus. 

Merchandise goods deficit decreased to $6.426 billion in June from $8.878 billion in May and in travel services registered a net inflow of $2.728 billion in June.

Home prices in the U.K. continued to advance in July, the Residential Market Survey from the Royal Institution of Chartered Surveyors showed Thursday.

A net 63 percent of respondents said home prices are rising in July, lower than 78 percent in April but still significantly above the long term average of 13 percent. 

Lack of new home supply is driving the U.K.'s home price surge. 

The DAX index increased 0.1% to 13,716.14, the CAC-40 index increased 0.2% to 6,536.79, and the FTSE 100 index fell 0.6% to 7,462.56. 

Deutsche Telekom AG increased 0.2% to 18.89 euros after the company reported a weaker profit in the second quarter but lifted the 2022 earnings outlook. 

Siemens AG dropped as much as 1.5% before recovering to 0.7% rise to 110.06 euros after the industrial company reported second quarter loss, first loss in 12 years. 

Siemens swung to a quarterly loss on the account of expenses of business closure in Russia and investment in Siemens Energy.

Aegon NV soared 9.2% to 4.86 euros after the Dutch financial services company reported second quarter net revenues declined 4% to 538 million euros from 562 million euros a year ago. 

Aegon swung to a quarterly loss of 365 million from a profit of 842 million a year ago on one-time non-operating expenses. 

The quarterly  result was impacted by a one-time charge related to reinsurance rate increases in the US, contributing to the net loss of 348 million euros. 

Aegon raised its 2022 guidance for operating income from 1.2 billion euros to 1.4 billion euros and expects to achieve cumulative free cash flow over the period 2021 to 2023 of at least 2.2 billion euros, ahead of the 1.4 to 1.6 billion euros target set at the 2020 Capital Markets Day