European markets were lower on Monday, as traders prepared for the final week of central bank action this year and three French media businesses listed in Europe. The regional Stoxx 600 index fell 0.14% at 9:40 am in London, with autos stocks leading losses. France’s CAC 40 index dropped 0.58% as investors assessed a surprise decision by Moody’s to downgrade the country’s credit rating to Aa3, from Aa2 previously, citing ongoing political instability.
Shares of France’s Vivendi leapt 33% after 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 fell 13% in London, while publisher Louis Hachette Group climbed 25% in Paris, and advertising and PR firm Havas rose 6% in Amsterdam.
Meanwhile, investors will be watching Berlin, where a vote of confidence is set to take place in parliament on Monday, with Chancellor Olaf Scholz expected to call on the German parliament to declare it has no confidence in him to trigger snap polls in February. The US Federal Reserve’s monetary policy meeting on December 18 is also front and center, with a 96% chance of a 25-basis-point cut. Traders will be closely watching the updated policy statement and Fed Chair Jerome Powell’s press conference for clues about interest rates. The Bank of England meets on December 19, with markets pricing in only a slim chance of a final rate cut of the year.