European stocks are struggling after a strong day, as Citi advises less weight in the region

A cafe near the Eiffel Tower on the last day before new Covid-19 restrictions are forcing bars and cafes in the capital to close for at least two weeks on October 5, 2020 in Paris, France.

Kiran Ridley / Getty Images

European shares were trading in a narrow range Tuesday, with a leading bank saying the region was vulnerable to an economic recession as COVID-19 cases remained high.

The Stoxx Europe 600 SXXP rose 0.8% on Monday,
-0.18%
It was partially lower. German DAX Index,
-0.04%,
French CAC 40 PX1,
+ 0.03%
And Britain FTSE 100 UKX,
-0.41%
All flatline hugged.

ES00 US Equity Futures,
-0.33%
Retreated after a 465-point advance in the Dow Jones Industrial Average,
+ 1.68%
on Monday. “US investors seem to welcome President Trump’s return to work, and signs of progress toward additional fiscal stimulus have contributed to the index’s gains,” said Ian Williams, a strategic analyst at Bill Hunt.

Citigroup strategists led by Robert Buckland say they are concerned about “a second COVID-19 wave, more EPS cuts, expanded assessments, and a messy US election”. They cut their view of continental European stocks to a lower weight while keeping British stocks neutral and US stocks overweight. “The cyclical tendency of the region will put it at risk if the economic recovery stops.” Strategists on European equities said, “The strength of the euro will also affect corporate performance.”

Per capita, Spain, the Czech Republic and France have the highest number of COVID-19 cases over the past 14 days, according to the European Center for Disease Prevention and Control.

Suez SEV,
+ 3.86%
Stocks are up 5% after Veolia Environnement VIE,
+ 0.08%
It revealed that it has bought nearly 30% of the water and waste management competitor it wants to purchase in its entirety. Suez said it would work to protect “the interests of its employees, customers and all stakeholders, in particular to ensure equal and fair treatment of all its shareholders and to avoid creeping takeover or effective control.”

French Electric Utility Inge,
+ 1.21%,
Which sold the Suez stake to Veolia of 2%.

Shares in Puma PUM,
-1.71%
It fell 3% after Kering emptied the nearly 6% of the sneaker maker’s stake.

Switzerland WOSG watches,
+ 21.58%
It rose 19% as annual retail sales increased and margin directed, after a better-than-expected 18% sales growth in the first ten weeks of the second quarter of the fiscal year.

BHP BHP,
-0.26%
Was steady after clinching a $ 505 million deal to buy Hess’s HES,
+ 4.37%
A stake in the deep waters of the Gulf of Mexico oil project.

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