Global Stocks Off to Tepid Start Amid Brexit Uncertainty
By Avantika Chilkoti
U.S. stock futures and European equities wavered Monday as
corporate earnings and the prospect of general elections in the
U.K. weighed on investors.
Stock futures tied to the Dow Jones Industrial Average edged up
Ahead of the New York opening bell, shares in Tiffany surged 27%
after LVMH Moët Hennessy Louis Vuitton confirmed it's talks for a
potential takeover that would value the iconic jewelry brand at
$14.5 billion. Shares in LVMH gained 0.3% in Paris trading.
Microsoft gained 3.4% in premarket trading after the software
company won a contract worth up to $10 billion over the next decade
from the Pentagon.
Investors are braced for a slew of corporate results later
Monday with companies including Beyond Meat and Alphabet due to
Meanwhile, the pan-continental Stoxx Europe 600 index was mostly
flat. HSBC Holdings was among the biggest losers in Europe,
shedding 4.4% after the bank dropped its main financial target and
said it would speed up plans to revamp its U.K., U.S. and European
The U.K.'s FTSE 100 gauge dropped 0.2% as U.K. Prime Minister
Boris Johnson urged lawmakers to support his push for a Dec. 12
general election as a way to clear a path to Brexit. European Union
leaders agreed to a three-month extension to the Brexit deadline,
extending the political uncertainty until Jan. 31. The British
pound was mostly flat against the dollar.
"The encouraging sign is that the risk of a no-deal remains low
and has shrunk even further," said Esty Dwek, a strategist at
Natixis Investment Managers. "The extension shows Parliament's
power and Parliament's willingness to make sure a no-deal doesn't
The yield on 10-year Italian government debt rose to 0.987% from
0.948% Friday following preliminary results from local elections
this weekend. The results will allow center-right political leaders
to campaign against the current administration in a bid to boost
their popularity, according to analysts at UniCredit.
Asian markets had a stronger start to the week. The Shanghai
Composite Index gained almost 0.9% and Hong Kong's benchmark Hang
Seng Index gained 0.8%.
The yield on 10-year Treasurys rose to 1.835%, its highest level
since mid-September as investors anticipate the Federal Reserve
will deliver another 25 basis point cut.
"Recent softer U.S. data would justify the cut," Barclays
analysts said in a note to clients. "However, the temporary easing
of global risks reduces the need for further insurance, and the Fed
could signal more willingness to follow a "meeting-by-meeting"
Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com
(END) Dow Jones Newswires
October 28, 2019 07:20 ET (11:20 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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