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European Markets Rally on Positive Earnings, Declining Yields, and Strong U.S. GDP Growth

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“European markets set to soar as positive earnings reports, attractive yields, and robust U.S. GDP growth fuel investor optimism from open to close.”

European stocks were mixed Friday morning, with earnings and the state of the global economy keeping sentiment on edge. The benchmark Stoxx 600 was 0.1% higher in London, as health-care stocks slipped 1.6% and oil and gas climbed 1.65% on strong crude oil price gains. The index is heading for its worst monthly performance since September 2022.

Company results have caused big movements in individual stocks. NatWest plunged as much as 17% before trading around 11% lower on the prior session. The bank reported third-quarter results that showed a lower net interest margin, while the U.K.’s Financial Conduct Authority said it had found “potential regulatory breaches” in its report into a banking account scandal that ousted NatWest CEO Alison Rose.

Deutsche Bank gained on a forecast beat as Barclays tumbled after warning of cost-cutting charges ahead.

Investors are also focused on central bank messaging on “higher for longer” rates and economic indicators as bond yields remain elevated. U.S. GDP grew by 4.9% in the third quarter, ahead of estimates, sparking stock market jitters.

The European Central Bank held interest rates steady after an unprecedented run of 10 hikes. ECB President Christine Lagarde said the bank had not discussed when the first rate cut may come, and to do so would be “totally premature.”

Friday will see the release of the U.S. personal consumption expenditures reading, the Federal Reserve’s preferred inflation gauge.

Asia-Pacific stocks were broadly lower despite mainland China bucking the trend, while U.S. futures were higher.

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