Europe Markets: European stocks and Dow futures step lower after rally

People walk past a Christmas market booth at the Castle Square in Stuttgart, southern Germany, on November 30, 2020, amid the continuing coronavirus COVID-19 pandemic. (

thomas kienzle/Agence France-Presse/Getty Images

After a bullish start to December, European stocks slipped Wednesday, along with U.S. equity futures, as investor optimism cooled after a record run higher.

The Stoxx Europe 600 index SXXP, -0.10% fell 0.4% to 390.50, a day after a 0.7% gain on Monday. The German DAX DAX, -0.30% and French CAC 40 PX1, -0.16% slipped 0.3% each and the FTSE 100 UKX, +0.21% eased 0.2%.

Dow futures YM00, -0.31% dropped over 100 points, or 0.4%, while S&P 500 ES00, -0.15% and Nasdaq-100 futures NQ00, -0.06% also pulled back.

“The equity market rally which is fueled by vaccine hope is taking a breather today, Basically, investors are trying to place their bets more carefully as the global equity markets recorded a record month,” said Naeem Aslam, chief market analyst at AvaTrade in a Wednesday research note.

“But traders do know that there is still a lot more upside left in equities as Pfizer and BioNTech have gained regulatory approval for their coronavirus vaccine in Europe,” said Aslam.

The U.K. government on Wednesday granted emergency approval for Pfizer PFE, +2.87% 0Q1N, +2.17% and BioNTech’s BNTX, -8.23% COVID-19 vaccine, with limited distribution of a shot expected within days. Shares of AstraZeneca AZN, +0.07% AZN, +0.26%, which is producing its own vaccine with Oxford University, rose 0.5%.

Investors were also keeping watch on stimulus talks in the U.S. The S&P SPX, +1.12% and Nasdaq Composite COMP, +1.28% logged record closes on Tuesday after a bipartisan group of lawmakers proposed a $900 billion coronavirus aid package.

Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell, testifying before a Senate panel, appeared to welcome the effort.

But expectations cooled after Senate Majority Leader Mitch McConnell, R-Ky., unveiled his own downsized proposal for a fiscal package, which included several provisions that were unlikely to receive Democratic support.

ReadEndgame afoot on Capitol Hill as lawmakers mull fiscal stimulus, funding, defense bills

On the geopolitical front, President-elect Joe Biden said in an interview with the New York Times that he wouldn’t immediately ease U.S. tariffs on China when he takes office in January. Auto stocks, sensitive to trade headlines, fell in Europe, with shares of BMW BMW, -1.07% down nearly 2% and those of Volkswagen VOW3, -1.49% dropped 1%.

Among other stocks on the move, shares of G4S GFS, +7.64% jumped 7% after Canada’s Garda World Security lifted its offer for the London-listed security company by 24%, valuing it at 3.68 billion pounds ($4.94 billion).

The pound GBPUSD, -0.53% fell 0.3% on signs the U.K. and Europe may be no closer to an agreement on their future trade relationship, once the U.K. leaves Europe’s single market on Dec. 31. The EU’s chief Brexit negotiator, Michel Barnier was expected to tell member states on Wednesday that key gaps between the two sides remain, according to media reports.

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