Earnings season, virus and China data

LONDON — European stocks are expected to open largely around the flatline on Tuesday with investors waiting for earnings season to kick off in the U.S., while watching the latest China data and coronavirus developments.

London’s FTSE is expected to open 16 points higher at 6,017, Germany’s DAX down 8 points at 13,130, France’s CAC 40 down 4 points at 4,975 and Italy’s FTSE MIB 7 points lower at 19,712, according to IG.

The lackluster open comes as investors brace themselves for the first batch of corporate earnings and updates on a U.S. stimulus package.

U.S. stock futures fell slightly in overnight trading ahead of third-quarter earnings season that starts on Tuesday. Several major banks are slated to report their results, including JPMorgan Chase, Citigroup and Delta Air Lines. Third-quarter results are expected to decline significantly; however, traders are hoping for a surprise to the upside.

Tech stocks will be in focus Tuesday as Apple’s long-awaited iPhone launch, which was pushed to October due to Covid-19, occurs on Tuesday and the company is expected to launch its first-ever 5G iPhone. 

Investors also weighed the possibility of a second coronavirus relief package from Washington. Over the weekend, the Trump administration called on Congress to pass a smaller $1.8 billion coronavirus relief bill as negotiations on a bigger package continue to run into roadblocks. However, House Speaker Nancy Pelosi In a letter to colleagues, said the proposition has insufficient offers on healthcare issues.

Overnight in the Asia Pacific region, meanwhile, markets were mixed. That came after data from China showed that the country’s exports and imports of goods hit a record in yuan-denominated terms in September, according to a Reuters report Tuesday that cited a spokesperson for the national customs agency.

In U.S. dollar terms, China’s exports rose 9.9% in September as compared to a year ago. That was close to expectations of a 10% year-on-year increase by analysts in a Reuters poll.

In the latest coronavirus news, Johnson & Johnson’s Covid-19 vaccine study has been paused due to an unexplained illness in a study participant.

On the data front in Europe, several countries report inflation data and Germany publishes its latest ZEW survey of economic sentiment. Kantar reports grocery market share data and Manchester United its full-year results and French Connection interim results.

– CNBC’s Maggie Fitzgerald and Eustance Huang contributed to this market report.

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