European Stocks Dip on Glum Earnings Before Fed Rate Decision
European stocks slid following a flurry of disappointing earnings, while investors awaited the Federal Reserve’s policy decision.
The Stoxx Europe 600 Index was down 0.3% at 8:20 a.m. in London. Banking stocks dropped after a slate of mixed earnings reports. HSBC Holdings Plc fell 5% as it posted disappointing quarterly profit, while UBS Group AG gained as much as 3.7% on better-than-expected earnings.
Mercedes-Benz Group AG and Aston Martin Lagonda Global Holdings Plc declined after tempering their business outlook.
Disappointing results have dented an otherwise positive month for European stocks that was driven by abating trade uncertainty. The Stoxx 600, which is about 2% below its March record high, faces another hurdle in the coming months from weak seasonals. The benchmark has historically seen its worst performance over August and September.
Geoff Yu, a macro strategist for EMEA at BNY Mellon, said he was expecting a holding pattern in markets ahead of the Fed’s decision. “We are also particularly interested in early responses by European corporates to the US-EU trade deal, and how future tariffs may affect or change their outlook,” he said.
Policymakers are largely expected to hold interest rates steady for a fifth consecutive meeting. Dissents from one or more officials could send the message that some members of the rate-setting Federal Open Market Committee prefer to reduce borrowing costs sooner rather than later.
In other earnings news, Adidas AG fell 7% as the footwear giant reported weaker than expected revenue growth.
French consumer goods company Danone SA rallied 6.7% as its sales beat expectations with volumes rising in most of its categories.
Source: Bloomberg
