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Fingers are crossed in the expectation of earnings results from major banking giants in the US.
On Tuesday morning, European stocks dipped 1.2% after an unknown investor sold large stakes in two German banks. While the pan-European Euro Stoxx 600 index dropped 1.2% on the day, the German DAX fell 1.8%. The same goes for the banking sector, which lost 2.3%. Earlier reports showed that the German Banks’ stakes the undisclosed investor sold were in Deutsche Bank and Commerzbank. The stakes sold were over 5% in the banks. The sale consisted of 116 million shares of Deutsche Bank and 72.5 million shares of Commerzbank.
European Stocks Down as Unknown Investor Sell Stakes in German Banks
Although the investor is not mentioned, Capital Group is one investor with such significant stakes in both banks. The Group has added to its take to own over 5% in Deutsche Bank as of November last year. In the previous year, Capital Group increased its stake in Commerzbank to over 5%.
About 24 hours after the stakes sale in both German banks, European stocks declined. The two affected banks also recorded losses. The shares of Deutsche Bank plunged 9.5%, while Commerzbank fell 8.6%. Despite the fall, Deutsche Bank remains positive. The banking giant said it is “confident” in its strategy.
The co-chief investment officer of BlackRock Fundamental Equities, Nigel Bolton, voiced his opinion about the current market condition. The investment officer advised traders to be aware of huge investor flows. Speaking to CNBC’s “Squawk Box Europe,” he said:
“When you look at the equity markets at the moment I do think there are some attractive areas, actually European banks are looking incredibly cheap now. And in an environment where you are starting to see rising rates, as long as you don’t think we’re going to move into a sort of recessionary environment in a year or two out, then actually they can look relatively attractive.”
US and European Stocks
The Russia-Ukraine war has resulted in oil volatility and volatility in other commodities and markets. This has also resulted in troubled stocks in Europe. Most recently, UK Foreign Secretary Liz Truss said the government was working swiftly to attend to an alleged attack. The Foreign Secretary said the government would confirm the details of an alleged chemical weapons attack in Mariupol, Ukraine.
Fingers are crossed in the expectation of earnings results from major banking giants in the US. This week, the likes of JPMorgan (NYSE: JPM), Citi (NYSE: C), Morgan Stanley (NYSE: MS), Wells Fargo (NYSE: WFC), and Goldman Sachs (NYSE: GS) will be announcing their earnings reports.
Additionally, global investors are looking forward to the March US consumer price index reading today. At the same time, investors all around the world are waiting for the producer price index tomorrow, the 13th of April.