European markets were lower on Monday, as traders braced up for the final week of central bank action this year and three French media businesses listed in Europe.
The regional Stoxx 600 index was down 0.14% at 9:40 a.m. in London, with autos stocks leading losses. France’s CAC 40 index dropped 0.58% as investors assessed credit rating agency Moody’s surprise Saturday decision to downgrade the country’s score to Aa3, from Aa2 previously. The agency said French public finances would be weakened in the coming years by ongoing political instability.
On Friday, Francois Bayrou was named as France’s fourth prime minister this year.
Shares of France’s Vivendi leapt 33% as three major businesses formerly within the media conglomerate listed in Europe on Monday. The spinoff was approved by Vivendi shareholders earlier this month in a bid to give each entity a higher valuation.
Broadcaster and film studio Canal+ shares saw a rocky start on the London Stock Exchange, trading 13% lower by mid-morning. Canal+ CEO Maxime Saada told CNBC on Monday that the company had chosen London because it is targeting growth in English-speaking markets and has many important British properties in its portfolio.
Russ Mould, investment director at AJ Bell, noted that volatility in the price in its early days was expected as some investment funds which hold Vivendi stock may be restricted to French-listed stocks and so forced to sell, while other investors decide who inherit the stock decide whether to stick with it.
Publisher Louis Hachette Group climbed 25% in Paris, while advertising and PR firm Havas rose 6% in Amsterdam, making them the second and third-best performers of the Stoxx 600.
In Europe Monday, investors will be keeping an eye on Berlin where a vote of confidence will take place in parliament Monday. Chancellor Olaf Scholz is expected to call on the German parliament today to declare it has no confidence in him in order for snap polls to take place in February. The move comes after his governing coalition collapsed last month.
Beyond that, the U.S. Federal Reserve’s monetary policy meeting on Dec. 18 stateside is front and center for global markets this week, with the CME Fedwatch tool forecasting a 96% chance of a 25-basis-point cut by the central bank. Traders will be paying close attention to the updated policy statement and Fed Chair Jerome Powell’s press conference for clues about the trajectory for interest rates.
The Bank of England meets on Dec. 19, with markets so far pricing in only a slim chance of a final rate cut of the year.