European Stocks Edge Higher; Airbus Issues Jobs Warning

European Stocks Edge Higher; Airbus Issues Jobs Warning  | Sep 22, 2020 08:48

European Stocks Edge Higher; Airbus Issues Jobs Warning

By Peter Nurse - European stock markets rebounded Tuesday after the previous session’s sharp losses. However, the overall tone remains weak amid concerns that the region’s recovery will be derailed by fresh lockdowns.

At 3:50 AM ET (0750 GMT), the DAX in Germany traded 0.8% higher, the CAC 40 in France rose 0.3% and the U.K.'s FTSE index was up 0.6%. These three benchmark cash indexes all dropped over 3% on Monday, their biggest one-day losses in over three months.

A fresh Covid-19 outbreak in Europe is increasing fears of more new lockdowns on the continent. 

British Prime Minister Boris Johnson is set to tell the public later Tuesday to work from home and will impose new curbs on pubs, bars and restaurants in a bid to tackle the swelling second wave of the coronavirus outbreak.

A number of European countries, including France, Spain and Greece, have already implemented new restrictive measures. 

In corporate news, Airbus (PA:AIR) stock fell 1.4% after CEO Guillaume Faury said that he couldn’t guarantee that the European planemaker wouldn’t have to resort to compulsory redundancies to cut costs. Airbus has said it needs to shed 15,000 posts worldwide.

Whitbread (LON:WTB), which owns the Premier Inn hotel and Beefeater restaurant chains, fell 2.4% after warning that 6,000 staff could lose their jobs given fewer guests since the coronavirus lockdown.

On the flip side, drinks producer A.G.Barr (LON:BAG) rose 7.4% after reporting a profit for the difficult first half of the year, admittedly sharply lower than the previous year, adding that dividend payments are expected to be resumed next year.

Later on, investors are likely to concentrate on U.S. Federal Reserve Chair Jerome Powell, as he makes the first of three appearances on Capitol Hill this week to discuss the central bank’s response to the coronavirus pandemic. 

Powell is set to reiterate the Federal Reserve remains committed to maintaining loose monetary policy measures as the outlook remains uncertain.

Oil prices drifted Tuesday, with Tropical Storm Beta proving less disruptive to the infrastructure in the Gulf of Mexico than feared. However, persistent worries about fuel demand as coronavirus cases continue to flare up around the globe remain a drag.

Traders will be watching out for the American Petroleum Institute's data on U.S. oil inventories due later on Tuesday.

U.S. crude futures traded 0.2% higher at $39.62 a barrel, while the international benchmark Brent contract rose 0.2% to $41.52. Both oil benchmarks fell around 4% on Monday.

Elsewhere, gold futures rose 0.3% to $1,904.45/oz, while EUR/USD traded 0.4% lower at 1.1727.


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