Despite the boss of the European Central Bank throwing more or less everything at the single European currency to stop it climbing, Mario Draghi's words yesterday weren’t enough. The surging euro is a huge problem for large-cap companies across Europe – their exporting power is directly hit – and this was reflected across European capitals today.
At 4pm this afternoon the German Dax – a collection of Germany’s 30 biggest publicly traded companies on the Frankfurt stock exchange – plummeted more than 2% to 12,200 points while the Parisian CAC 40 wasn’t far behind at 5,102 down -1.86%.
Shares in Volkswagen and Infineon Technologies were both down close to 5% while Continental was down 3.5%. The euro anxiety didn’t do much for US stocks either, with the Dow down -0.41% at 21,521. At the time of writing (4.10pm) the euro was up 0.20% at $1.1653 having peaked earlier at $1.1667. It was also up 0.22% against the pound at 0.8986.
- UK FTSE 100 7,452.91 -0.47%
- Dow 21,542.36 -0.33%
- S&P 500 2,467.89 -0.23%
- Nasdaq 6,376.58 -0.21%
- Nikkei 225 20,099.75 -0.22%
- DAX 12,201.11 -1.97%
- CAC 40 5,104.54 -1.82%
- Gold 1,257.10 +0.40%
- Oil WTI 46.11 -1.73%
Bank of America signals Dublin move
This afternoon saw Bank of America (BoA) claim Dublin as its new EU hub post-Brexit. The news is significant because BoA is the first major US bank to nominate Dublin as its number one choice. Other banks are known to be looking at a similar path, or extending existing operations, including Barclays.
The Irish move is important for many international banks because they need a licence to keep their EU operations going – and a UK licence won’t be much good post-Brexit. The invoking of Article 50 saw to that.
“Until the final outcome of the political negotiations has been reached, none of us will know how we will operate in the future,” Middle East operations boss of Bank of America Alexander Wilmot-Sitwell told the Irish Times.
GE profits down 60%
Across the water Wall Street stocks have dipped with shares slumping sharply in General Electric, down more than 5% following a second quarter 60% profits slump. However GE still reported profits of $1.19bn and it claims it’s still on target to snip $1bn in savings by year end.
Keeping in the States, Reuters is reporting that US authorities, specifically the Federal Trade Commission, are probing Amazon’s discounting practices following a complaint bought by advocacy lobbying organisation Consumer Watchdog. The news is sensitive given that Amazon is on the cusp of swallowing Whole Foods for $13.7bn.
In London the FTSE 100 closed down 34 points at 7,452.91 with Shire the biggest riser, up 1.86%. However G4S slumped more than 3% to 330p; there were 2.5% falls for Micro Focus Int and Smiths Group.
Breaking news: Hometrack claims UK house price growth across 20 cities including Manchester and Leeds could hit 6% in 2017, up from the 4% figure it predicted in December 2016.