European markets higher

Where are the major benchmarks trading?

The Stoxx Europe 600 Index SXXP, +0.34%  rose 0.5% to 385.20, after dipping between positive and negative territory earlier in the session. The index ended 0.6% higher on Monday, in a modest rebound from recent losses, including a 1.2% drop over the course of last week, which was its third straight weekly decline.

U.S. stocks opened higher early Tuesday, putting the S&P 500 nearer to record levels.

Italian stocks were proving the day’s best performers in Europe, with the FTSE MIB Italy index FTSEMIB, +1.68%  climbing 1.7% to 20,809.38.

Germany’s DAX DAX, +0.49% rose 0.7% to 12,425.35. On Monday, the index rose 1% in its biggest single-day percentage gain since July 26, after its third straight down week, its longest such stretch since February.

France’s CAC 40 PX1, +0.76%  jumped 0.8% to 5,423.30, while the U.K.’s FTSE 100 UKX, -0.35%  was unchanged at 7,591.5.

The euro EURUSD, +0.3745% extended its recent advance against the dollar, changing hands at $1.1562, compared with $1.1484 late Monday in New York. The U.S. dollar index DXY, -0.25%  is down for a fifth straight session, its longest such streak since the start of the year. Thus far this year, however, the euro is down more than 4% against the greenback.

What’s driving the market?

Investors are turning their attention to upcoming news from the U.S. Federal Reserve. The minutes from the central bank’s latest meeting will be released on Wednesday, and on Friday, Fed Chairman Jerome Powell will give a speech at the Fed’s annual summer retreat in Jackson Hole.

Both the minutes and the speech will be scoured for any insight into what the Fed sees as potential problem spots for the economy as well as for any clues into the Fed’s policy plans on interest rates. In particular, market participants will be looking to hear Powell’s thoughts on trade policy and whether the currency crisis in Turkey could spread to other emerging markets or regions.

Separately, investors are continuing to monitor trade relations between the U.S. and its major trading partners, with talks between the U.S. and China set to resume on Wednesday. While market participants are optimistic that progress could be made in the talks — potentially avoiding a potential trade war, which most analysts said would be a massive headwind for global economic growth — few expect the issue to be resolved.

On Monday, President Donald Trump told Reuters that he has “no time frame”for ending the trade dispute, and that he didn’t “expect much” from the talks. His administration is also moving forward with tariffs that cover $200 billion in Chinese goods, including some that are to take effect on Thursday.

U.K.’s top diplomat was expected to deliver a speech in Washington on Tuesday calling for fresh sanctions against Russia, urging a continued hard line, according to prepared remarks released by the embassy.

What stocks are in focus?

BHP Billiton PLC BLT, -2.32%  fell 1.2% after it reported its quarterly results, where earning were pressured by $5.2 billion in impairment charges.

Bank stocks were busting higher and supporting the main index, with Spain’s Banco Santander SA SAN, +2.29% SAN, +1.82%  up 2.8% and France’s BNP Paribas SA BNP, +1.39%  gained 2.8%. Italian banks were also gaining, with Unione di Banche Italiene SpA UBI, +4.01%  surging nearly 5% and UniCredit SpA UCG, +2.31%  climbing over 3%.

Bayer AG BAYN, +1.46%  surged 3.8%, extending Monday’s rally. The pharmaceutical giant is up nearly 6% so far this week, following massive losses last week sparked by a litigation loss in California over whether Bayer-owned Monsanto’s Roundup herbicide is carcinogenic. Shares were lifted to buy by Berenberg Bank, where an analyst said the selloff had gone far enough.

John Wood Group WG., +7.89%  gained nearly 8%, and was the top percentage gainer among European stocks after posting results, and saying its full-year outlook was on track.

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Source: marketwatch.com