The European stock rally is stalled as traders evaluate the economic impact of Venezuela
After a string of record closings, European stocks were down?on Wednesday as investors took a break to digest the latest U.S. - Venezuela developments and awaited new economic data.
The?STOXX?600 index was slightly lower at 0920 GMT a day after it reached a new closing high.
Investors were cautious following the announcement by U.S. president Donald Trump that the United States has reached an agreement to import $2 billion of Venezuelan crude oil, which is expected to increase supply.
In response to Trump's remarks, oil prices dropped. Shares of UK energy giants Shell and BP fell 2.4% and 3.1% respectively. The European energy index also dropped 1.7%. There is sometimes a concern that complacency will set in. Richard Flax is chief investment officer of wealth management firm Moneyfarm. He said that investors in the past have largely ignored geopolitics and been rewarded.
"Even though momentum can sometimes break, the markets are predicated on a supportive operating environment and a decent earnings environment."
DATA TO DRIVE SENTIMENT Traders have also analyzed a series of data releases that will be crucial in shaping the macroeconomic narrative. The U.S. Labor Department’s Job Openings and Labor Turnover Survey (also known as the JOLTS Report) is due Wednesday.
The benchmark index in Germany increased by 0.44%. Indexes in Spain, Italy and France were all flat. The three indexes had all reached their highest levels a day before.
The unemployment rate for Germany, the largest economy in the eurozone, is currently at 9%.
Roses less than expected
In December. Retail sales fell in November, a surprise.
Data from France showed that consumer confidence increased in December. The CAC 40 index slipped 0.2%. Pluxee, a French voucher and benefits company, rose 3.5% to its highest level since November after reporting a 9.1% organic growth in the first quarter sales.
ASML, a manufacturer of chip equipment, fell by 2% and snapped a six-day streak of gains, the longest since November. Nestle's stock fell?0.1% as Jefferies and Bernstein cut their price targets for the stock. The company announced on Tuesday that it was recalling certain batches of infant nutrition products because they may have been contaminated with a toxin which can cause nausea and vomitus. (Reporting and editing by Subhranshu Sahu in Bengaluru, and Saumyadeb Chkrabarty.)
(source: Reuters)
