By Peter Nurse
Investing.com – European equity markets are expected to open lower on Tuesday and consolidate after Monday's strong gains as investors try to match signs of a global economic recovery with concerns over the increasing number of new coronavirus cases in the US bring.
At 02:05 ET (0605 GMT), the contract in Germany was down 0.7%. in France they fell 0.7%, while the UK contract fell 0.7%.
The mood was slightly dampened by German data, which rose by 7.8% in May. This was a significant recovery from the 17.5% decline in April, but slightly less than forecast. Factory order data released on Monday showed the same pattern.
In addition, the Italian oil major Eni, along with its larger competitors Shell (LON 🙂 and BP (NYSE :), has impaired assets of around EUR 3.5 billion (US $ 3.96 billion) due to lower prospects for energy prices reported while French food services and facilities company Sodexo (PA 🙂 said sales for the third quarter of fiscal 2020 were down 30% due to the pandemic.
The major European cash indices rose between 1.5% and 2% on Monday, supported by a rise in Chinese stocks and purchases on Wall Street, supported by a strong recovery in US services activity in June.
This sharp jump in the US index to 57.1 was the last in a series of economic releases in June that gave hope of a significant recovery in the global economy.
However, the fly in the ointment is the ever growing number of Covid-19 cases worldwide, particularly in the United States.
In several states – Texas, California, and Florida – new cases of corona viruses were reported over the holiday weekend. Some companies had to revert to the burgeoning recovery due to a setback. Raphael Bostic, president of the Federal Reserve Bank of Atlanta, said Monday that the US economic recovery is in danger of stalling.
Oil prices fell on Tuesday as continued growth in new coronavirus cases in the U.S., the largest crude oil consumer, depressed sentiment. According to Johns Hopkins University, the number of deaths in the U.S. on July 7 was over 130,000.
Later on Tuesday, the American Petroleum Institute's report on the level of will be in focus, following a 8.1 million barrel draw the previous week. Investors will look into whether the new wave of coronavirus infections has affected oil consumption across the country.
At 2:10 p.m. ET, the futures were down 1.4% at $ 40.05 a barrel. The international benchmark contract fell 1.4% to $ 42.52.
In other countries, it rose 0.1% to $ 1,794.45 / ounce while trading at 1.1303, a decrease of 0.1%.
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