European Stocks Kick Off August with Gains, Stoxx 600 At Record

02 Aug 2021 · 3rd Party Analysis

European Stocks Kick Off August with Gains, Stoxx 600 At Record

WRITTEN BY ThorFX

In Summary

  • European markets open on a high note, Stoxx 600 Europe surges to an all-time session high
  • US futures elevated ahead of the first trading session in August

European Stocks Kick Off August with Gains, Stoxx 600 At Record

Markets across Europe are trading higher on the first trading day of August as traders and investors are piling into the positive momentum around the world, driven by strong earnings and decreased inflation pressures.

The pan-continental Stoxx 600 Europe on Monday spiked over 0.81% in the early hours, setting a new intraday record of nearly 466 points. Over the next few hours, the broad-market index retreated and is currently gyrating around 465 points, up about 0.65% on the day. Almost all sectors in the index are trading in positive territory, with the auto industry leading the gains, up about 2% on Monday.

Major bourses in Europe today are considerably higher with Spain’s IBEX35 leading the positive performance, up nearly 1.45%. UK’s FTSE100 follows right after, higher by roughly 0.90%, while the German DAX and the French CAC40 are higher on the day by around 0.40% and 0.70%, respectively.

Earnings are in focus for another week as the financial reporting season unleashes another set of large companies presenting their quarterly results. In Europe, Heineken, AXA, and HSBC are set to reveal how they fared during the pandemic-ridden second quarter, coupled with a broader economic reopening around the globe.

US Futures Gear Up for a Strong Start of the Month

Stateside, futures contracts tied to the major indexes on Monday are gearing up to kickstart with gains of over 0.50%. Strong earnings are pushing the valuations higher, while bipartisan progress on Joe Biden’s $1tn infrastructure bill is expected to provide increased certainty over the outlook for the US economy.

Entering August trading, the market on both sides of the Atlantic is largely shrugging off several key concerns that have caused stock jitters over the past month. In addition, to tackle rising Delta virus woes, the US Centers for Disease Control have called for mandatory vaccines for health workers and a return to mandatory mask-wearing even for vaccinated people. On that front, the market doesn’t expect the rising Covid-19 cases to overturn economic progress or bring back harsh lockdowns.

Meanwhile, inflation concerns have eased slightly since Friday when the latest personal consumption expenditures price index showed prices rose 3.5% for June, lower than the expected rate of 3.6%. The measure of inflation is the inflation gauge followed by the Federal Reserve.

In Europe, the Covid-19 vaccine health pass France is fueling continuous protests for a third consecutive weekend. Thus, on Saturday, more than 200,000 protesters took to the French streets to express their reluctance to adhere to the new policies by the government.

The weekly protests challenge the country’s response to the rising threat of the Delta variant. This comes after French President Emmanuel Macron said in mid-July that a health pass would be necessary for anyone who wants to enter places like restaurants, cafes, or other social venues.

Shifting the focus on cryptocurrencies, Bitcoin, Ether, and other major coins experienced a considerable move higher over the weekend. The flagship token soared nearly $2,000, or about 4%, Saturday through Sunday, to a Sunday-session high of $42,550. The Ethereum coin spiked nearly 12% for the same period, reaching as high as $2,700 per token.

However, on Monday, the price of bitcoin is pressured as the digital asset is showing an intraday loss of about 4%, trading near $39,600. Ether is also in the red, lower by 3%, gyrating around $2,600.

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