European equities fell on Tuesday due to dismal earnings from UBS and a Federal Reserve policy announcement.
The pan-European STOXX 600 slid 0.06 % to 425.98 at 0320 EST (0720 GMT), while Germany’s DAX fell 0.35 % to 13,150 and France’s CAC 40 fell 0.41 % to 6,216.8. The U.K.’s FTSE 100 rose 0.29 % to 7,287.5.
UBS leads a series of large banks’ earnings this week. Investors will look for indicators that a weaker economy, rising interest rates, and the Ukraine crisis are affecting operations and outlooks.
UBS Group AG (SIX:UBSG) recorded a smaller-than-expected 5% gain in second-quarter net profit, sending shares falling 6.5%. CEO Ralph Hamers termed the quarter one of the “most challenging” for investors in a decade.
The second half of the year “remains unpredictable,” Hamers said.
The Fed remains the week’s focus. The Fed is likely to raise rates by 75 basis points to slow inflation.
Fed Chair Jerome Powell’s address and press conference will also be closely watched amid fears that fast interest rate hikes may drop the world’s largest economy and major global growth driver into recession.
Walmart (NYSE:WMT) warned of lower profits late Monday, citing customers’ reduced discretionary spending.
Sieben & Spruengli’s performances in Europe were positive (SIX:LISN). After announcing a 36% spike in first-half net profit, the Swiss chocolate producer raised its sales forecast and announced a CHF 1 billion share repurchase program.
The company’s shares jumped 3.28 percent in early deal-making on Tuesday.
Concerns over Europe’s energy supplies were heightened Tuesday when Russia announced a further cut in natural gas supplies to the region, perhaps pushing a move to crude.
Gazprom (MCX:GAZP), a Russian state-owned energy company, said Monday that Nord Stream 1 pipeline deliveries to Germany would decrease to 20% of capacity, just days after restoring output to 40% of capacity for maintenance.
Later in the session, the API will provide crude supply statistics.
By 3:45 AM EST, Crude Oil WTI Futures increased 2.0% to $98.63 a barrel, while Brent rose 2.02% to $102.21.
Gold futures rose 0.28 percent to $1,723.90/oz, while the EUR/USD fell to $1.0224.
