European Shares Fall to Two-week Low

European shares fell further on Wednesday, pressured by concerns over a possible recession in US bond markets and the ongoing trade war between the world’s top two economies.

The pan-European STOXX 600 traded down 1.2 percent at the start of the session, marking its lowest level since November 23, but it recovered some losses and last stood 0.8 percent lower to €355.52.

The financial sector weighed heavily on European stocks as investors thrust sectors highly sensitive to economic growth aside. Europe’s bank index dropped 1.7 percent, before recuperating to trade down 0.2 percent to €142.85.

The oil and gas sector declined 1.4 percent to €320.44, while the mining segment slipped 1.3 percent to €400.54. Both sectors shed 1.5 percent earlier in the session.

Cyclicals are really dependent upon accelerations in growth, they are very real economy sensitive for higher revenues, said John Ricciardi, chief executive and lead portfolio manager for a hedge fund management firm.

Ricciardi added that the inversion parts of the US yield curve means investors are starting to worry about future growth and inflation.

Analysts have lowered their forecasts for 2019 earnings growth as markets’ mood turned dim this autumn.

Tech shares sank 1.1 percent to €411.95 after the highly valued US tech sector sold off.

Following a sharp fall in chip stocks in the US, chipmakers ams AG, STMicroelectronics, and Infineon Technologies AG were down 5.4 percent to CHf26.30, 2 percent to €13.020, and 1.7 percent to €18.483 respectively.

German Automakers’ Stock Soar after White House Meeting

German automakers bested the DAX as investors absorbed what appeared to be a relatively positive result from auto executives’ meeting at the White House.

Shares of Daimler AG were up 0.1 percent to €50.505, while BMW AG rose 0.1 percent to €74.505 and Volkswagen advanced 0.04 percent to €148.60.

The DAX lost 0.8 percent to €11,245.18 on Wednesday.

US President Donald Trump called for car companies to raise investments in the US, something the senior executives said they intend to do but would not be able to do if the administration proceeds with new tariffs.

White House economic adviser Larry Kudlow, among those in the meeting, stated that he did not see the car tariffs to be imminent, although he added that they were in Trump’s quiver of arrows.

Trump has threatened to levy tough duties on vehicles produced in the European Union (EU) as his America First trade policy.

BMW said last week it was considering setting up a second manufacturing plant in the US that could build engines and transmissions, earning praise from Trump, who has made the renewal of US production the main support of his economic program.

BMW noted on Tuesday that it had not yet made a final decision.

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