European Markets Hover at All-Time Highs, US Futures Climb

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Principal Points

• Stocks in Europe trade to the upside, continuing their upbeat performance from Monday
• Equity futures in the US indicate a higher open in New York on Tuesday

Markets across Europe are looking to continue their upside swing from Monday as investors are expecting strong earnings reports to further pave the way to new highs. On Tuesday, a few hours into the regular trading session, major European stock indexes hover moderately in the green.

European stocks ended the first trading session for August on a positive note. All major benchmarks in the old continent ended higher, led by Spain’s IBEX35, finishing up by 83 points, or 0.96%, to 8,758.70. France’s CAC40 was right after, advancing 63.14 points, or 0.95%, to 6,675.90. UK’s FTSE100 added 49.42 points, or 0.70%, while Germany’s DAX was moderately higher by 24.34 points, or 0.16%, to finish at 15,568.73.

Bourses in Europe were off to a strong start of equity trading for the month, boosted by robust financial reports by mainstay companies in the finance, technology, and travel and leisure sector. The region-wide Stoxx 600 advanced 2.71 points, or 0.59%, to close at 464.45, a new record close for the index and just 0.20% from its session high of 465.45 set the same day.

British aero-engineer Meggitt skyrocketed nearly 60% on Monday to become the best performer among the 600 stocks in the broad-based index. The soaring price was a result of the news that US industrial firm Parker-Hannifin would buy the UK competitor in a deal valued at $8.76bn.

Axa, the second-biggest insurance company in Europe, advanced 4.2% after it released quarterly earnings, saying net income for the first half of the year surged 180%.

Positive Financial Statements Among European Companies

On the broader corporate earnings front in Europe, more than half of the Stoxx 600 companies have already reported second-quarter financial statements. About 67% of them have delivered better-than-expected profit figures, Refinitiv data states.

Elevated optimism in European stocks has propelled the benchmark Stoxx 600 index to end the month of July with a gain of about 1.5%, logging its sixth straight month of positive performance.

Over to the US markets, major averages delivered a rather weak performance on Monday as investors were dissuaded from piling into the risky assets on looming concerns the Delta strain could once again jeopardize the economic recovery.

The blue-chip Dow Jones and the broad-based S&P500 gave up early gains and ended the session in the red. The Dow fell roughly 0.3%, while the S&P500 declined nearly 0.2%. The Nasdaq Composite kept steady above the flatline and finished Monday action slightly higher, up 8.39 points, or less than 0.1%.

The US is now averaging more than 85,000 new Covid cases a day in the last seven days. The figures mark a 50% increase in the rate of infection compared with the seven days ended July 26. The seven-day average is the highest since late January when the pace of vaccination in the US was gathering speed. Presently, about 70% of US adults have received a dose of a Covid-19 vaccine.

Despite the lingering uncertainty over the fast-spreading Delta variant, futures markets on Tuesday indicate a higher open for the major stock averages. Dow futures, S&P500 futures, and Nasdaq futures are higher by about 0.20% each.

Shifting to cryptocurrencies, the nascent market today is struggling to remain positive. Bitcoin is lower for a third straight day, currently trading around $38,450 per token. Ether is gyrating near the $2,500 mark, down by nearly 4.5% on the day.