European Stocks Take a Pause
European stocks were muted on Monday as investors braced for a busy earnings day. The Stoxx Europe 600 Index was little changed, with gains in the technology and health-care sectors offset by losses in the energy and financial sectors.
Tech and Health Care Lead the Way
The technology sector was the biggest gainer, rising 0.7%, while the health-care sector was up 0.4%. Among the biggest gainers in the tech sector were semiconductor maker Infineon Technologies AG, which rose 1.7%, and software maker SAP SE, which rose 1.3%.
In the health-care sector, drugmaker Novartis AG rose 1.2%, while medical device maker Smith & Nephew Plc rose 0.9%.
Energy and Financials Take a Hit
The energy sector was the biggest loser, falling 0.7%, as oil prices fell on concerns about rising U.S. crude inventories. Among the biggest decliners in the sector were oil major BP Plc, which fell 1.3%, and Royal Dutch Shell Plc, which fell 1.2%.
The financial sector was also down, falling 0.4%, as investors remained cautious ahead of the earnings season. Among the biggest decliners in the sector were insurer Allianz SE, which fell 1.2%, and banking giant Deutsche Bank AG, which fell 0.9%.
Earnings Season Begins
Investors are bracing for a busy earnings season, with a number of major companies set to report their results this week. Among the companies set to report are oil major BP Plc, banking giant Deutsche Bank AG, and drugmaker Novartis AG.
Analysts expect earnings to be mixed, with some companies reporting better-than-expected results and others reporting worse-than-expected results. Investors will be looking for signs of a recovery in the European economy, as well as any indications of how companies are managing the ongoing pandemic.
Markets Remain Cautious
Despite the upcoming earnings season, markets remain cautious. The Stoxx Europe 600 Index is down 1.2% year-to-date, and the euro is down 0.3% against the U.S. dollar.
Investors are also keeping an eye on the ongoing Brexit negotiations, as well as the U.S.-China trade talks. Any progress on either front could provide a boost to European markets.
Looking Ahead
Looking ahead, investors will be closely watching the earnings season for any signs of a recovery in the European economy. Any positive news could provide a boost to European markets, while any negative news could weigh on the markets.
In addition, investors will be keeping an eye on the ongoing Brexit negotiations and the U.S.-China trade talks. Any progress on either front could provide a much-needed boost to European markets.