Stocks - Europe To Edge Higher; Daimler Seen Cutting More Jobs

Stocks - Europe To Edge Higher; Daimler Seen Cutting More Jobs  | Feb 10, 2020 15:33

Stocks - Europe To Edge Higher; Daimler Seen Cutting More Jobs

By Peter Nurse - European stock markets are set edge higher Monday, as traders reacted with cautious optimism to the restarting of industrial activity in China. However, gains are likely to be limited as the coronavirus continues to claim victims.

At 02:00 ET (0700 GMT), the DAX futures contract traded 36 points, or 0.3% higher. France's CAC 40 futures were up 10 points, or 0.2%, while the FTSE 100 futures contract in the U.K. rose 4 points, or 0.1%. Futures on the pan-eurozone index, the Euro Stoxx 50, climbed 6 points, or 0.2%.

Workers in China travelled back to offices and factories around the country after the extended Lunar New Year holiday, although a large number of workplaces still remain closed and many white-collar workers will continue to work from home. Still, a report that Apple’s main manufacturer, Foxconn, got a green light to resume some production has helped the overall tone.

Adding to that tone is the news the Chinese government has pledged $10 billion to help fight the virus while the People’s Bank of China moved to keep liquidity ample Monday through reverse-repurchase agreements.

Even so, the death toll from the disease has officially overtaken that of the SARS outbreak almost two decades ago, as China reported an additional 89 deaths on Sunday, bringing the total number of deaths in the mainland to 908, with over 40,000 people affected.

The death of a whistleblower doctor last week and the disappearance of citizen journalists in Wuhan who were reporting on the outbreak have also raised suspicions that the scale of the outbreak may be being understated.

The U.K. has declared the virus a "serious and imminent" threat to public health.

Turning back to Europe, in corporate news, eyes will be on Daimler (DE:DAIGn), the maker of Mercedes-Benz cars and trucks, following a report that the German luxury carmaker plans to cut up to 15,000 jobs to cut costs in the face of a global demand slowdown, compounded by the need to adapt to electric drivetrain technology.

The group had said in November that it would cut at least 10,000 jobs and reduce staff costs by around 1.4 billion euros ($1.5 billion) by the end of 2022, but the newspaper Handelsblatt reported that these numbers would be significantly exceeded.

Economic data are thin on the ground Monday, with only Italian industrial production for December due, at 04:00 AM ET (0900 GMT).

Elsewhere, the oil market has edged lower Monday, after posting a fifth straight weekly loss last week. Combined losses over five weeks stood at more than 22% for both benchmarks, leaving them in bear market territory.

AT 02:00 AM ET (0700 GMT), U.S. crude futures traded 0.1% lower at $50.28 a barrel and the international benchmark Brent contract fell 0.1% to $54.45.

The euro was little changed against the dollar at $1.0954.

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