On Tuesday, European stock markets were down with losses in the banking sector ahead of the big tech earnings season in Wall Street. The DAX index in Germany was 0.2% lower, the CAC 40 in France dropped 0.7%, and the FTSE 100 in the U.K. fell 0.4%. The banking sector is currently in full swing with UBS reporting a 52% drop in profit for the first quarter, causing UBS stock to fall 4.5%. This significant drop is due to the $665 million increase in legal provisions relating to U.S. residential mortgage-backed securities. Moreover, Credit Suisse was taken over by UBS earlier this month, with its former rival logging asset outflows of more than $68 billion during the first quarter. Santander stock also fell by almost 4% due to a very small rise in its net profit in the first quarter, which was weighed by a weaker performance in Brazil.
Standard Chartered's CEO Bill Winters warned of fresh issues that could lead to a crisis, and investors will be looking for news on cost-cutting and job shedding across the industry, as well as their efforts around artificial intelligence. The European Central Bank's Supervisory Board Chair, Andrea Enria, is due to speak later in the session, and investors will be listening for clues as to the future path of the central bank's monetary policy. The European Central Bank is expected to lift interest rates again in early May, a decision that the central bank's chief economist, Philip Lane, confirmed in an interview with French newspaper Le Monde published early Tuesday.
Meanwhile, oil prices have stabilized, with traders weighing a potential recovery in Chinese demand as the second-biggest economy nears a crucial holiday period. Bookings in China for trips abroad during the upcoming May Day holiday point to a continued recovery, boosting fuel demand in the world's largest oil importer. By 04:05 ET, U.S. crude futures traded 0.1% higher at $78.83 a barrel, while the Brent contract climbed 0.1% to $82.62. Additionally, gold futures edged higher to $1,995.95/oz, while EUR/USD traded 0.1% lower at 1.1029.
