A profit warning released by the company responsible for the making of Mercedes-Benz automobiles, Daimler, has placed pressures on the European stock market as investors look towards the upcoming G20 summit, the meeting between Trump and Xi Jinping that could potentially dissolve the month-long trade tensions between the two global superpowers.
The auto-company’s shares experienced a 3% drop after it lifted certain provisions for issues regarding its diesel vehicles and simultaneously cut its earnings outlook for this year. Combined with recent data illustrating a drop in German business morale this June, Daimler’s drop contributed to a 1% drop in the larger European auto sector, with Volkswagen AG Bayerische Motoren Werke AG and Porsche Automobil Holding’s stocks also experiencing a 1% drop.
As this situation unravels, investors in the European stock markets eagerly await the possibility of easing US-China trade tensions during the upcoming summit. Despite the ultimate failure of previous talks, analysts expect the G20 summit to produce more tangible results.