Oct 25 2024: European stock markets trended mostly lower on Friday as third-quarter corporate earnings took center stage, with tepid economic growth dampening investor sentiment.
As of 03:05 ET (07:05 GMT), Germany’s DAX index dipped by 0.1%, France’s CAC 40 slid 0.3%, and the UK’s FTSE 100 remained largely unchanged.
Weak Economic Sentiment in Europe
French consumer confidence saw a slight decline in October compared to the previous month, with data released earlier on Friday placing attention on Germany’s upcoming Ifo surveys.
The eurozone economy is facing challenges, with PMI activity data still indicating contraction. This has weighed heavily on market sentiment, despite the European Central Bank’s efforts to ease monetary policy through three 25-basis-point interest rate cuts this year. Speculation is growing that the ECB may consider a larger rate cut at the next meeting to address the weak economic outlook, though some policymakers are cautious.
Meanwhile, traders at the IMF-World Bank annual meetings, which conclude Friday, will be watching for any hints on future monetary policy directions.
Mercedes Struggles with Sluggish Demand in China
Corporate earnings reports continue to capture attention across Europe as the week ends. Mercedes-Benz (OTC: MBGAF) shares dropped over 2% after the company announced that third-quarter earnings in its core car division suffered from reduced demand for luxury goods among Chinese consumers.
Norwegian Air (OL: NAS) shares fell 0.5% after the budget airline trimmed its upper-end profit forecast for 2024 due to lower-than-expected third-quarter results. Similarly, French spirits maker Remy Cointreau (EPA: RCOP) dropped 1% after reporting disappointing sales amid challenging conditions in China.
In contrast, Sanofi (NASDAQ: SNY) rose 2% after the French pharmaceutical company reported stronger-than-expected earnings, boosted by higher-than-anticipated seasonal vaccine sales. Eni (BIT: ENI) gained 1% as the Italian energy company announced an expanded share buyback program following better-than-expected third-quarter results.
In the U.S., investors are gearing up for next week’s earnings season for major tech companies, with Alphabet (NASDAQ: GOOGL), Amazon (NASDAQ: AMZN), Apple (NASDAQ: AAPL), Meta (NASDAQ: META), and Microsoft (NASDAQ: MSFT) set to release results over three days starting Tuesday.
Oil Poised for Weekly Gains
Oil prices edged up on Friday, likely securing a weekly gain as tensions in the oil-producing Middle East region maintained a risk premium in the market.
At 03:05 ET, the Brent crude benchmark rose 0.4% to $74.69 per barrel, while U.S. crude (WTI) increased by 0.4% to $70.47 per barrel. Both contracts are set to record weekly gains of around 2%, as traders monitor Israel’s anticipated response to Iran’s October 1 missile attack, which could disrupt supplies in the top oil-producing region.
U.S. and Israeli officials are expected to resume discussions on a ceasefire and hostage negotiations in Gaza soon, though expectations remain low due to the lack of success in prior attempts.
4o
