Markets Mixed Amid Positive Fed News & Auto-Sector Losses

30 July 2020

    Wall Street has gotten its much needed boost yesterday as the Fed had reiterated its support for the US economy and suggested rates remain at their historical near-zero level for some time. Expected, yet reassuring news have added to indices, leading the Dow to close 0.6% higher, and S&P 500 and Nasdaq to gain 1.2% and 1.4% respectively.

     

    A dark cloud for the stock market did come in the face of clear auto-sector suffering, however. European stock markets were seen opening mixed, as major automakers, including Renault and Volkswagen reported large losses, slightly overshadowing the positive news from the Federal Reserve.

     

    Renault had posted a record net loss of 7.292 billion euros, further dragged down by the losses of its alliance partners Nissan and Mitsubishi, as well as the general pandemic-induced sales decrease.

     

    Volkswagen, in turn, had reported a first-half operating loss of 800 million euros, which caused it to cut its dividend from the initially-planned 6.50/ordinary share and 6.56/preferred share to a devastating 4.80 and 4.86 euro, respectively.

     

    In response, the German Dax had traded 0.4% lower. Nevertheless, UK’s FTSE 100 and France’s CAC 40 had still gained 0.3% each.


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