December 1, 2020

European stocks up as holiday slowdown begins

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LONDON (AP) — European markets bounced back Thursday as the traditional holiday slowdown began in earnest, rising a day after investors were rattled by the European Central Bank’s huge loans to bolster the continent’s banks.

Investors were spooked by the huge size of the ECB’s euro489 billion ($639 billion) three-year loans Wednesday to 523 banks — its biggest credit infusion to date as authorities try to steady a financial system under severe pressure from Europe’s debt crisis.

Although the loans will help make sure banks have enough money to lend next year, they don’t address Europe’s underlying problem of too much government debt.

With Christmas looming, trading is getting lighter by the day. The flow of news is also drying up — once a raft of U.S. economic figures are released later, there’s very little on the economic calendar until the New Year. Analysts expect U.S. economic growth figures later to be left unrevised at an annualized rate of 2 percent and weekly jobless claims to remain below 400,000.

“With trading in many markets grinding to an almost complete standstill, even though price action remains choppy, it will take some large surprises … to stir markets from their seasonal slumber,” said Marc Ostwald, markets strategist at Monument Securities.

Figures earlier showing that Britain’s economy grew by a slightly better-than-anticipated 0.6 percent in the third quarter had little impact, as the previous quarter was revised down by an equivalent rate to show zero growth.

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