Fed causes bemusement | Calamatta Cuschieri

European markets moved lower on Thursday, as investors digested the latest Federal Reserve minutes, which failed to provide further clarity on the outlook for US interest rates and created confusion on the central bank’s plan of action.

Over in the US, stocks traded slightly lower, as a fall in the technology sector dragged down the broader market. Shares of Facebook, Tesla, Apple, Netflix and Google parent Alphabet all traded lower, pushing the Technology Select Sector down during Thursday’s session. Tech, which was this year’s best performing sector coming into Thursday session, has fallen 4% over the past month and was on track for its fourth losing session in five.

Autos higher, travel stocks struggle

Travel and leisure stocks struggled on the back of lower than expected sales from some firms. Shares of EasyJet were in the red and Ryanair traded lower, too.

Auto stocks made some gains after the European Commission cleared the takeover of General Motors’ European arm Opel by the carmaker Peugeot. Shares in Peugeot rose 2.57%. Staying in the industry, shares of rival French firm Renault traded in positive territory after it announced plans to increase its presence in the Chinese market. Shares were up 1.65%.

But among the top performers of the day was Associated British Foods. Shares jumped after the parent of fashion retailer Primark said its full year outlook has improved.

Tesla and General Electric lower

Shares of Tesla were down on Thursday, shedding 4% after the electric car maker’s Model S failed to receive a top safety award from the Insurance Institute for Highway Safety. This was the second straight day of declines for the company, having fallen 7% during Wednesday’s trading session following a disappointing sales delivery update.

Elsewhere, shares in General Electric were in the red after the European Union’s antitrust watchdog said the company may have misled regulators when the EU was reviewing its $1.65 billion deal with LM Wind Power. Its shares shed 1.70% during the session.

Fed fails to inspire

Investors assessed the minutes from the June meeting of the US Federal Open Market Committee on Thursday. The minutes showed Fed policymakers are divided on the pace of interest rate hikes and several members showed concern on the impact on markets.

“The minutes gave rise to confusion rather than providing a clearer insight on the FOMC’s next policy move,” said a senior market analyst at London Capital Group in a note.

In the same vein, the European Central Bank released the minutes of its latest monetary policy meeting. Traders are looking for any hints the ECB is getting closer to ending its ultra-loose monetary policy stance, after central bank President Mario Draghi was seen as striking a hawkish tone at the speech in Portugal last week.

Disclaimer:

This article was issued by Rebecca Naudi, Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.