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A general view of Shell Petroleum refinery on Pulau Bukom off Singapore is pictured on July 16, 2020. (Photo by Roslan RAHMAN / AFP) (Photo by ROSLAN RAHMAN/AFP via Getty Images)
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European stocks traded lower Thursday on the busiest day of second-quarter earnings season, with concerns mounting about a sluggish economic recovery and a possible second wave of the coronavirus.
The Stoxx Europe 600 SXXP, -0.80% dropped 0.7% in early action. U.S. stock futures ES00, -0.78% dropped sharply as European stock markets opened.
Traders were looking at the U.S. economy, where Federal Reserve Chairman Jerome Powell again said the central bank was not even “thinking about thinking about” lifting interest rates, as second-quarter gross domestic product numbers are expected to reveal a 35% annualized drop when they are released at 8:30 a.m. Eastern.
U.K. Prime Minister Boris Johnson fears a second wave of coronavirus in two weeks, the Daily Mail reported, citing a Downing Street source.
Earnings season continue on both sides of the Atlantic. Earnings per share of Stoxx Europe 600 companies have dropped 42% in the second quarter, according to FactSet Research data on the 40% of results so far.
Anheuser-Busch InBev ABI, +7.55% BUD, +1.90% shares surged 8% as its profit for the second quarter came in below estimates after a write-down of its African business but the revenue decline wasn’t as steep as estimated due to its Latin American and Asian businesses.
Lloyds Banking Group LLOY, -6.99% slumped 6% after it an unexpected pretax loss for the first half of 2020 on booking a large impairment charge.
Royal Dutch Shell RDSA, +0.19% took a $16.8 billion write-down and said that due to the lag in contracts, the impact of low oil prices is expected to become more significant in the third quarter, and rival Total FP, +0.94% took $8.1 billion of impairments, but both oil producers edged higher.
AstraZeneca AZN, +2.54% rose 2.5% as the U.K. pharmaceutical giant reported its second-quarter net profit surged and said late-stage trials for the coronavirus vaccine it is developing with University of Oxford researchers are under way.
A slate of U.S. earnings also are coming Thursday, with key technology companies Alphabet, Amazon.com, Apple and Facebook all reporting after the close of trade.
