The European stock rally is stalling as traders evaluate the economic impact of Venezuela

After a string of record-breaking?closes?, European stocks were subdued Wednesday as investors took time to digest recent U.S.?developments? between Venezuela and the United States. They also awaited new economic data.

STOXX 600 was slightly lower at 0920 GMT a day after it had reached a new closing record.

Investors were cautious when U.S. president Donald Trump announced that the United States has reached an agreement to import $2 billion of Venezuelan oil, which is expected to increase supply.

In response to Trump's remarks, oil prices dropped. Shell and BP, UK's two largest energy companies, fell 2.4% and 3.1% respectively. The European?energy index also dropped 1.7%.

Sometimes, complacency can creep in. Richard Flax is chief investment officer at Moneyfarm. He said that investors in recent years have paid more attention to the economy and geopolitics.

"Even though the'momentum' sometimes breaks down, the markets are predicated on an operating and earnings environment which is supportive."

DATA TO DRIVE SENTIMENT

The traders also assessed the release of a series of data that will play a pivotal role in shaping the macroeconomic narrative. Wednesday is the deadline for the U.S. Labor Department’s Job Openings and Labor Turnover Survey (also known as JOLTS).

In Germany, the benchmark index rose by 0.44%. Indexes in Spain & Italy were unchanged. The three indexes had all reached their highest levels a day before.

In December, the unemployment rate in Germany - the largest economy in Europe - rose less than anticipated. Retail sales fell unexpectedly in November.

Data from France showed that consumer confidence increased in December. The CAC 40 index fell 0.2%.

Pluxee, a French voucher and benefits company, rose by 3.5% to its highest level since November after reporting a 9% growth in organic sales for the first quarter.

ASML, a manufacturer of chip equipment, fell by 2% and snapped a six-day streak of gains, the longest since November.

Nestle's stock dropped 0.1% as Jefferies & Bernstein cut their price target on 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)