European markets drifted lower as crude oil prices continued to move upward on reports of geopolitical tension.
How did markets perform?
The Stoxx 600 SXXP, -0.06% was down 0.2% to 387.5, after rising 0.1% Friday.
The euro EURUSD, +0.2496% was at $1.1233, up nearly 0.2% Monday, following a 0.1% gain Friday.
Germany’s DAX DAX, -0.26% DAX, -0.08% and the U.K.’s FTSE 100 led the regional declines. The DAX sank 0.3% to 11,975.5. It had crept up 0.2% by Friday’s close.
In the U.K., the FTSE 100 UKX, +0.05% was also down 0.3% to 7,423.1, though less worryingly as it had closed Friday up 0.6%.
The pound GBPUSD, +0.0767% recovered some of Friday’s loss, rising 0.1% Monday to $1.3061. On Friday it had fallen 0.5%.
France’s CAC 40 PX1, +0.04% dipped 0.1% to 5,471.3 Monday following Friday’s increase of 0.2%.
Italy’s FTSE MIB I945, -0.06% was down nearly 0.2% Monday at 21,725.2 after falling 0.2% Friday.
Crude oil was up again after a strong ending to the week Friday. Brent crudeLCOM9, +0.41% was $70.34 per barrel, up 1.4% from Friday’s close, while West Texas Intermediate (WTI) CLK9, +0.35% was at $63.08, 1.6% higher than Friday. Brent and WTI were respectively trading 2.3% and 2.8% higher than their close a week ago.
What’s moving the markets?
An escalating battle between government and rebel forces in Libya added to a wealth of factors driving up oil prices. Ongoing production cuts by Organization of the Petroleum Exporting Countries (OPEC) had bolstered prices in recent months, but the triple whammy of positive economic data out of the U.S. and China, encouraging trade talk news and now Libyan conflict threatening production seems to have pushed major benchmarks into a new range. Jasper Lawler, head of research at London Capital Group, said that while recent factors had largely affected supply: “[Friday’s] better than forecast U.S. jobs data will be lifting demand expectations. Right now, there are plenty of reasons to assume that the current strength in the oil market is here to stay.”
On Sunday, U.S. National Economic Council director Larry Kudlow reassured investors on a number of fronts. Appearing on CBS’ Face The Nation, Kudlow said that the previous week’s U.S.-China trade talks were productive. “We’re closer than we ever have been before,” Kudlow said. He also softened some of the government’s rhetoric around potential border closures with Mexico over immigration, and signaled positively on the new North America-wide free trade deal.
Brexit talks between teams led by U.K. Prime Minister Theresa May and opposition Labour Party leader Jeremy Corbyn were set to continue Monday despite Labour’s statement Friday that the Conservative government had not offered to compromise on any of its major issues. With optimism waning, focus turned to the European Council’s emergency Brexit summit Wednesday. EU leaders signaled that the Brexit extension May requested won’t likely be considered long enough unless it comes with a detailed plan, but a longer extension could finally drive Conservative Brexiteers over the edge. As things stand, the U.K. is set to leave without a deal on Friday, though few in the British media expect such an outcome.
What stocks are active?
Italian car maker Fiat Chrysler Automobiles NV FCA, +1.51% climbed on news it had reached a deal with U.S. electric auto maker Tesla TSLA, +0.91% to include the latter’s electric vehicles in Fiat Chrysler’s fleet, for the purposes of emissions reporting. Jeffries analyst Philippe Houchois said the deal was positive for both car makers, as Fiat could avoid as much as €2 billion in European Union emissions fines, while supplying Tesla with much-needed cash. Fiat Chrysler was up 1.3% Monday after closing flat Friday.
Dutch airplane maker Airbus SE AIR, +1.95% AIR, +1.70% swung higher after its U.S. rival was stung by news that American Airlines had canceled more flights into early June while seeking more information from regulators about the grounding of the Boeing BA, -4.21% 737 Max model. Airbus shares rose 0.9% Monday.
German enterprise software company SAP SE SAP, -1.16% fell 1.6% on concerns about the health of its cloud computing business. News emerged on Saturday that Robert Enslin, the veteran head of the division, had left, adding to a string of high-level departures.