Europe close: Stocks slightly higher ahead of Trump speech
European stocks finished the session with slight gains ahead of an eagerly awaited speech from US president Donald Trump later in the day and as inspectors from Greece's lenders headed back towards Athens.
Seadrill
kr779,275.00
19:00 21/12/20
Ahead of his speech, scheduled for after the close of trading on Wall Street, Trump told Fox News that stronger US economic growth - of 3.0% or more - could pay for his stimulus measures.
"I think the money is going to come from a revved up economy [...] I mean you look at the kind of numbers we're doing, we were probably GDP of a little more than 1% and if I can get that up to 3% or maybe more, we have a whole different ball game."
The benchmark pan-European Stoxx 600 edged higher by 0.19% to 370.24, as Germany's Dax added 0.10% to 11,834.41 and the FTSE Mibtel surrendered 0.01% to end at 18,913.28.
In parallel, front month Brent crude oil futures were off by 1.103% at $55.32 a barrel on the ICE, while the euro/dollar was edging higher by 0.25% to 1.0615.
Dallas Fed president strikes hawkish note
The Stoxx 600 gauge of Basic Resources companies was at the bottom of the pile, down 0.89% at 426.53. A sub-index of construction stocks was up for a second day running, gaining 0.69% to 442.14 on hopes for a boost to US infrastructure spending.
Fed funds futures were pricing-in 50.0% odds of a Fed rate hike at the 14 to 15 March policy meeting, according to Bloomberg data.
On a related note, in remarks to CNBC Dallas Fed president Robert Kaplan reiterated his stance that the US central bank should raise rates "sooner rather than later".
On Monday, Reuters reported him as saying "sooner rather than later means in the near future."
However, Kaplan added: "I don't think the exact timing is the most important thing. I think the path of rates is."
Trump, Greek bailout review on traders' minds
"We think the market is getting rather tired of the US administration’s flamboyant rhetoric and needs considerable clarity, especially on fiscal plans," analysts at UniCredit said.
"This can be seen not only in the year-to-date losses of the dollar but also in stalling US nominal yields and the underperformance of US equities versus EM peers. The latter is particularly important because there is a case to be made that the rally in world equities is related more to the upswing in global growth than simply being 'Trump-induced'."
Acting as a backdrop, Greece's finance ministry said inspectors from the European Commission, the International Monetary Fund and the European Central Bank would meet with officials in Athens to discuss energy reforms, fiscal issues and privatisations.
In other news, the latest French voter poll from Opinionway put support for independent centrist presidential candidate Emmanuel Macron in a run-off vote at 61.0%, versus the 39.0% which were expected to back Far-right candidate Marine Le Pen.
Support for Macron was down from 62.0% on Monday and before an expected announcement of his economic policy proposals on 2 March.
Also in France, the cost of living dipped from a 1.3% year-on-year pace in January to a 1.2% clip for February, missing forecasts for an advance of 1.5% by a wide margin.
Seadrill leaves investors reeling
In corporate news, shares in Seadrill were sharply lower after warning of difficulties in restructuring its debt pile.
Analysts at Canaccord Genuity pointed out inconsistencies in the company's update. In particular, by saying that its 'ad-hoc' committee of bondholders was "not presently restricted" Seadrill in effect conceded they were not privy to any non-public information.
Hence, the broker said "we struggle to see therefore how they could now be in any meaningful negotiation with Seadrill, despite the later claim that discussions with this group continue."
Furthermore, its 31 January restructuring plan made no mention of the need for a debt-to-equity swap, Canaccord said, estimating the then current face vale of the company's gross debts at roughly $13.0bn.
Volkswagen's supervisory board decided to cut executives' pensions to just 40.0% of their base salary, down from 50.0%, German daily Bild reported.
Pan-European aerospace giant Airbus appointed a new head for its problem-prone A400M military cargo aircraft.