European stocks snapped a three-day streak of gains on Monday amid light volumes, with the UK market closed for a bank holiday. The pan-European Stoxx 600 index ended the session down 0.02 per cent. The index was still trading around near a one-month high.
European Market Performance
The Iseq All-Share index advanced 0.8 per cent to 9,631.49. Banking stocks were in demand, with AIB advancing 2.8 per cent to €5.43, Bank of Ireland gaining 0.9 per cent to €10.36 and PTSB rising 1.3 per cent to €1.62 as the European Central Bank’s chief economist Philip Lane said over the weekend the bank’s battle to return inflation to 2 per cent was not won and interest rates must stay as high as necessary to achieve that goal. Higher interest rates typically boost banks’ income.
Housebuilders also edged higher as home prices continue to increase. Cairn Homes rose 0.8 per cent to €1.91, while Glenveagh Properties nudged 0.7 per cent higher to €1.44.
Individual Stock Performance
Corrie Energy rallied almost 42 per cent to 17 cents, having sold off sharply last week as its interim chairman resigned after less than two months and the embattled company set about raising more short-term cash as it continues to seek longer-term investment.
Ryanair dipped 0.6 per cent to €15.15 as oil prices rose on Middle East tensions. The German benchmark equities index pared some earlier losses, closing down about 0.1 per cent after a survey showed business morale for Europe’s largest economy fell in August. German gross domestic product figures, employment, and retail sales data are on deck throughout the week. The oil and gas sector gained 0.7 per cent, as crude prices jumped.
Among individual stocks Telecom Italia rose 2 per cent on a report that Italian banker Claudio Costamagna is working on a plan to gather a group of investors potentially interested in buying France’s Vivendi shares in the telecoms group. Swiss solar panel-maker Meyer Burger fell 45 per cent, its worst day on record, after the company halted plans for a plant in Colorado and further delayed its financial results.
US Markets Brace for Earnings Season
The S&P 500 and the Nasdaq were lower in choppy trading by midafternoon on Wall Street, weighed by AI-favourite Nvidia ahead of its results later in the week, while markets awaited a key inflation report and cemented bets on an imminent interest rate cut by the Federal Reserve.
Nvidia dropped, leading declines among chip stocks and sending the Philadelphia SE Semiconductor index down ahead of the chip designer’s highly anticipated earnings on Wednesday. Markets have been less forgiving this quarter of highly valued megacap stocks, which spearheaded the excitement around artificial intelligence. Nvidia’s earnings will be scrutinised to justify the stock’s more than 160 per cent year-to-date jump, which pushed its market cap value to No. 2, just below Apple’s, as of Friday’s close.
“Nvidia’s on tap. People are taking a little money off the table, saying, well, we’ve earned some money,” said Kim Forrest, chief investment officer at Bokeh Capital Partners. “Their forecast for the next six months or so is probably the most important data that we get this week.”
Other growth names such as Tesla, Meta and Apple were also lower. The energy sector bucked the trend to rise as reports of oil supply disruptions amid the geopolitical conflict in the Middle East lifted crude prices.
Focus on Inflation and Rate Cuts
Other areas in the market, including financials stocks such as American Express and consumer staples such as Procter & Gamble, also saw gains, limiting declines on the blue-chip Dow, which hit an intraday record high earlier in the day. The main indexes rallied more than 1 per cent on Friday, with the benchmark S&P 500 nearing record highs after Federal Reserve chair Jerome Powell said “the time has come” to lower borrowing costs in the light of a diminishing upside risk to inflation and moderating labour demand.
Traders are now betting on either a quarter- or a half-percentage-point rate cut in September. Results from Dell, Salesforce, Dollar General and Gap are also expected through the week.
– Additional reporting, Bloomberg, Reuters
