2024-10-21 23:48:47 :
(Bloomberg) — European stocks held steady ahead of a busy earnings week. Investors remain cautious about the health of the European economy and growing tensions in the Middle East.
As of 9:05 a.m. in London, the Stoxx Europe 600 index was up less than 0.1%. Banks and insurance companies lagged, while energy stocks outperformed as oil prices rebounded from last week’s losses. Mining shares rose as iron ore and base metal prices rose after Chinese banks cut benchmark lending rates more than expected.
Among stocks, JDE Peet’s NV jumped after investment holding company JAB agreed to buy Mondelez International Inc.’s stake in the coffee retailer. Munich Re fell after a rating downgrade. RBC downgraded SGS SA and Intertek Group Plc, making them among the worst performers on the Stoxx 600 index, citing greater caution in the testing, inspection and certification industry.
Investors are keeping a close eye on the health of major economies, with France’s scope rating downgraded today in another warning about the country’s fiscal health. The country’s CAC 40 index underperformed. Geopolitics is also in focus, with developments in the Middle East, the war in Ukraine and the upcoming US election all coming under scrutiny.
Disappointing results last week also dampened investor sentiment. Joachim Klement, head of strategy, economics and ESG at Panmure Liberum, said weak earnings from companies such as ASML Holding NV could put pressure on tech index heavyweights such as SAP SE, which will report after the close today.
However, Barclays strategists led by Emmanuel Cau said a mixed start to the earnings season was not enough to derail gains in global stocks as recent U.S. data bolstered talk of a soft landing.
The upcoming U.S. election will also keep many investors on the sidelines as the outcome remains uncertain. “Overall, investors appear to be increasingly cautious about the medium-term outlook over the next six months,” Clement added. “As a result, gains in selected stocks will be used to take profits.”
European company executives are more focused than their U.S. counterparts on Donald Trump’s pledge to impose tariffs on all imports if he returns to the White House, with European companies mentioning “tariffs” more frequently on conference calls than their U.S. counterparts .
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