European Markets Struggled to Advance After Underwhelming Earnings Reports

Bridgette Randall
05 Nov, 2024
London

European markets traded around the flatline as investors reviewed another batch of quarterly results and awaited rate decisions this week.

Benchmark indexes in Paris, Milan, Frankfurt, and London lacked direction after a fresh batch of mixed earnings. 

Investors are also awaiting rate decisions from central banks of the U.S., U.K., Sweden, and Norway later in the week. 

The U.S. Federal Reserve and the Bank of England are likely to lower their key lending rates by 25 basis points after policy meetings on Thursday. 

Moreover, investors are also awaiting the results of the U.S. presidential and congressional elections, which could impact the future funding of the NATO and trade relations between the U.S. and the eurozone. 

 

Spain Jobless Count Advanced In October 

The number of people registered as jobless increased by 26,769 from the previous month to 2.602 million in October, the lowest number for this month since 2007, according to the ministry of employment and social security. 

On an annual basis, the number of unemployed declined by 157,350, or about 5.7%, from a year ago and fell at the fastest pace since September 2023. 

Registered unemployment increased in all 17 autonomous communities, with the largest increases in Andalusia (7,723), Castilla-La Mancha (3,859), and Catalonia (2,909).

Unemployment among young people under 25 years of age rose in October by 8,361 people compared to the previous month. 

 

France's industrial output declined in September. 

France's industrial output declined 0.9% from the previous month in September, following the downwardly revised 1.1% increase in August, France's statistical agency INSEE reported on Tuesday. 

Industrial activity declined for the first time since May, driven by a fall in manufacturing activities by 0.8%, in mining, energy, water supply, and waste management by 1.2%, and in construction activities by 0.3%. 

On an annual basis, industrial output declined 0.6%. 

 

Europe Indexes and Yields

The DAX index increased by 0.1% to 19,156.42; the CAC-40 index rose by 0.1% to 7,376.05; and the FTSE 100 index rose by 0.3% to 8,209.53. 

The yield on 10-year German bonds edged higher to 2.42%, French bonds inched higher to 3.16%, the UK gilts edged higher to 4.49%, and Italian bonds decreased to 3.70%.

The euro edged higher to $1.09; the British pound inched higher to $1.29; and the U.S. dollar weakened to 86.19 Swiss cents.

Brent crude increased $0.26 to $75.34 a barrel, and the Dutch TTF natural gas rose by €0.48 to €40.97 per MWh. 

 

Europe Stock Movers

Vestas Wind Systems declined 8.8% to DKK 124.0 after the wind turbine company lowered its estimate of operating earnings before special charges to €450 million from €500 million. 

Adecco Group declined 10.5% to CHF 24.14 after the Swiss staffing company reported third quarter results that lagged market expectations. 

Revenue in the third quarter declined 4% to €5.7 billion and net income fell 4% to €99 million from a year ago, respectively. 

The temporary and permanent staffing services provider said market conditions are challenging in France and the United States.

"Macroeconomic conditions are challenging, but volume trends have stabilized," said chief executive Denis Machuel. 

Syensqo increased 6.1% to €77.36 after the Belgian chemical company said it plans to reduce about 2% of its workforce. 

Associated British Foods increased 0.7% to 2,305.0 pence after the parent of retailer Primark reported strong financial results for the year ending on September 14. 

Group revenue increased 2% to £20.0 billion from £19.8 billion, pre-tax profit advanced 43% to £1.9 billion from £1.3 billion, and basic earnings per share rose 44% to 193.7 pence from 134.20 pence a year ago. 

Free cash flow soared to £1.4 billion from £269 million a year ago, driven by significant growth in operating profit and improvement in working capital.