By Peter Nurse
Investing.com - European stock markets are set to open mixed Wednesday, consolidating after Tuesday’s strong gains, with investors weighing indications of an economic recovery with signs the fight against Covid-19 will be a long one.
At 2 AM ET (0600 GMT), the DAX futures contract in Germany traded 0.3% higher. France's CAC 40 futures were down 0.4%, while the FTSE 100 futures contract in the U.K. fell 0.3%.
European stock markets posted hefty gains Tuesday, along with Wall Street, as a strong rebound in U.S. retail sales in May boosted the impression that the American economy, the world’s largest, is recovering quickly, despite another sobering performance from Federal Reserve Chair Jerome Powell on Tuesday.
News out of Europe was encouraging as well, after the German ZEW confidence indices suggested “the euro economy has already moved into upswing territory,” said Danske Bank, in a note to clients.
However, doubts still exist about how solid a base this recovery is built upon, with Powell cautioning that output and employment in America would remain well short of their pre-pandemic levels for a long time.
The Covid-19 virus is also proving hard to get rid of, with infections hitting record highs in six U.S. states and Beijing struggling to contain a fresh outbreak. The Chinese capital closed its schools on Wednesday, saying that a cluster of new cases discovered at the weekend was "extremely severe".
Adding to the mixed picture, Japan’s exports fell 28.3% in May from a year, their biggest decline since the 2008 global crisis.
In corporate news, HSBC (LON:HSBA) is likely to be in focus after the banking giant is set to resume a massive redundancy plan it had put on ice following the outbreak of coronavirus, according to a memo seen by Reuters.
The U.K.-based, but Asia-focused, bank, plans to cut 35,000 jobs over the medium term, around 15% of the bank's 235,000 staff worldwide.
In other news, U.K. online fashion house boohoo.com, one of the biggest winners of the pandemic in Europe, said it expects revenue growth to slow to 25% for the full year, despite a 45% increase in its first quarter. Net margin will dip below 10%, it added, although it promised to take advantage of the many acquisition opportunities it expects from the recession.
Also in London, bookmaker William Hill raised 224 million pounds in new equity at a price of 128 pence, 8% below Tuesday's closing price.
Oil prices headed lower, after the American Petroleum Institute predicted late Tuesday another rise in U.S. crude stocks.
API reported a 3.9 million-barrel build for the week ending June 12. The Energy Information Administration publishes its weekly crude oil inventories data at 10:30 AM ET (14:30 GMT). Crude inventories are seen falling 152,000 barrels after a build of 5.7 million barrels in the previous week. OPEC will also present its monthly update on the world oil market.
At 2 AM ET, U.S. crude futures traded 1.6% lower at $37.75 a barrel. The international benchmark Brent contract fell 1.2% to $40.49.
Elsewhere, gold futures were flat at $1,736.45/oz, while EUR/USD traded at 1.1282, up 0.2%.