European shares facing a "toxic backdrop"
VGK•VGK•VGK•VGK•European shares fell to their lowest in almost four months as higher energy prices and fiscal and political concerns in France pushed bond yields higher. The STOXX 600 was up 1% in the live-market update, while oil prices dipped and Wall Street futures rose.
European shares dropped to their lowest in almost four months as higher oil and gas prices and fiscal and political worries in France pushed bond yields to their highest in decades. Barclays equity strategists said higher rates and rising energy prices create a “toxic backdrop” for Europe, given the region’s greater sensitivity to both.
Barclays said the backdrop for equities is no longer as straightforward as earlier in the year, with the cushion from the “There Is No Alternative” trade increasingly challenged and earnings needing to do more of the heavy lifting. Earnings season unofficially kicks off next week, with major U.S. banks set to report and ASML, BMW and LVMH on the European docket.
