Stocks – Europe Seen Lower After Wall Street Weakens

© Reuters.

By Peter Nurse – European stock markets are set to open marginally lower Wednesday, taking their tone from the small losses seen on Wall Street on Tuesday as worries emerged over the effective impact of the expected trade deal between the U.S. and China

Market participants are mindful of the still-simmering tensions between the two countries.

At 02:00 ET (0700 GMT), futures on the U.K.’s index were trading 15 points, or 0.2%, lower. Futures on France’s were 6 points, or 0.1%, lower, while the dropped 53 points, or 0.4%.

This follows on from the broad-based easing back from record highs to close down 0.2% on Tuesday. The fell 0.2% but the outperformed, helped by some strong bank earnings, closing up 0.1%.

U.S. and Chinese officials are scheduled to sign the deal Wednesday in Washington. It had been hoped that this would lead fairly promptly to a de-escalation of trade hostilities between the two economic powerhouses. But U.S. Treasury Secretary Steven Mnuchin late Tuesday dismissed the idea that this agreement could prompt the rolling back of more tariffs on China after the U.S. presidential election in late 2020.

“The tariffs will stay in place until there is a phase two. If the president gets phase two quickly, he will consider releasing tariffs. If not, there won’t be any tariff relief,” Mnuchin said on Bloomberg TV.

With the “phase two” negotiations likely to be more complex, this could take some time.

That said, losses were minor, helped by the largely positive tone from Wall Street’s blue chips at the start of the U.S. earnings season. The banks are often taken as a rough proxy for the health of the broader economy.

JPMorgan Chase (NYSE:) and Citigroup (NYSE:). were able to post strong double-digit earnings growth in the final

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