European Midday Briefing : Stocks Mixed, Investors Look Ahead to Earnings

MARKET WRAPS

Stocks

European shares were mixed as geopolitical risks eased, with investors taking profits and expecting any pullbacks in stocks to be short-lived.

French politics are still in focus as President Macron could name a new prime minister on Friday to replace Sebastien Lecornu while Israel approved the U.S.-brokered deal for a cease-fire and hostage release in Gaza.

Looking ahead, the third-quarter earnings season kicks off in earnest next week. Results are likely to have a greater impact on markets in the absence of major economic data releases, investors say.

Companies in the S&P 500 are expected to report earnings growth of 8% in the third quarter, which would mark the ninth straight quarter of year-over-year earnings growth for the broad-based index, according to FactSet.

Meanwhile, spot silver prices reached the historic $50 mark on Thursday, a level not seen since 2011, as investors continue to turn to safe haven assets. The white metal is following gold's rally, with mining stocks shining even brighter.

Stocks to Watch

Leonardo's

third-quarter results, due for release on Nov. 5, will show that the Italian defense and aerospace group is well on track to meet its full-year guidance, Jefferies said. It expects the company to post 5% revenue and 13% Ebita growth.

U.S. Markets:

US stocks futures edged up as the government shutdown continued and investors awaited sentiment data.

Official data has been delayed, which means the University of Michigan's preliminary consumer-sentiment index for October will attract more interest than usual.

Forex:

The euro rose.

The currency's tepid recovery following more positive headlines on French politics is understandable given current risks , ING said.

The dollar's recent recovery stalled, with the greenback falling slightly after reaching a two-month high in the previous session.

The dollar has strengthened this week as political concerns in Japan and France weighed on the yen and the euro.

Bonds:

Eurozone government bond yields declined, led by OATs, with market focus on French President Macron's anticipated announcement of a new prime minister.

" French politics will remain in the headlines with the president expected to convene with party representatives in the afternoon and likely to appoint a new prime minister thereafter--some think it could again be [Sebastien] Lecornu," ING said.

OATs price only around 9 basis points of political risk premium as snap-election risk is priced out, Citi Research said.

Societe Generale said political stress intensity in OATs eased slightly , but tensions remained high.

"Defensive positioning remains appropriate given ongoing uncertainty and rising ratings risk."

Treasury yields declined as focus was on Treasury supply, which was well absorbed by the markets, Societe Generale said.

Treasury yields have been trading in a tight range , while swap spreads continued to widen, it added.

Energy:

Oil prices fell in early trade after Israel approved the U.S.-brokered deal for a cease-fire and hostage release in Gaza.

"This presents a major step toward ending the two-year war that raised the risk of supply disruptions in the oil market," ANZ said.

Metals:

Gold prices slipped back beneath the $4,000 mark, but remained on track for an eighth consecutive weekly gain as structural drivers stayed in place.

Comex gold futures have likely formed an interim peak at $4,000/oz, RHB Retail Research said.

Barclays said the yellow metal's rally this year signals increasing distrust in the existing fiscal and monetary order .

William Blair said strong catalysts could continue to support prices , shrugging off dollar strength.

Copper

Copper was lower due to profit-taking. Prices may face short-term corrections , but the medium-to-long-term outlook remains bullish, Nanhua Futures said.

Iron

Iron ore rose with markets subdued given the recent Chinese holidays. Markets will likely be concerned about any further efforts to limit China's steel exports, ANZ said.

EMEA HEADLINES

Canned-Tuna Maker Princes Group Expects London IPO at End of October

Canned-tuna company Princes Group, a U.K. subsidiary of Italian food manufacturer NewPrinces, aims to go public on the London Stock Exchange at the end of this month, it said Friday.

The food-and-beverage company-which owns brands like Flora and Napolina-said the initial public offering will be made up of new ordinary shares, with net proceeds being used to fund growth through acquisitions. Princes didn't provide pricing details of the IPO, which is still subject to financial regulatory approval.

Stellantis Shipments Rise After Strong Rebound in North America

Jeep maker Stellantis's vehicle shipments rose by an estimated 13% in the third quarter, driven by strong growth in North America on the back of inventory improvements.

The company said Friday that global shipments-vehicle deliveries to dealers, distributors, or directly from the company to retail and fleet customers-rose to an estimated 1.3 million units.

How Trump's Upside-Down Diplomacy Delivered a Major Foreign-Policy Victory

President Trump's announcement that he ended the two-year war in Gaza rested on an unorthodox strategy of declaring victory first and forcing others to fill in the details to make it a reality.

He turned upside-down the traditional playbook for solving international crises, in which diplomats work behind the scenes to iron out differences between warring parties, before world leaders swoop in and announce a deal.

GLOBAL NEWS

China to Impose Special Port Fees on U.S. Vessels

China plans to impose a special port fee on U.S. vessels docking at Chinese ports, in retaliation for the Trump administration's move to levy fees on Chinese ships.

China's Ministry of Transportation said Friday the fees will be collected on vessels owned by U.S. companies, organizations, or individuals. Vessels with 25% or more of their equity owned by U.S. entities, as well as those flying the U.S. flag, will also be subject to the special port fee, it added.

Bubble or Not, the AI Spending Binge Is Unprecedented in Every Way

One big question is haunting the bull market of 2025: Are we in an artificial-intelligence bubble that resembles the dot-com investment boom of the 1990s?

There are frothy (and reminiscent) indicators like suppliers funding their customers, and concentrated investment in a single asset class, AI data centers, all backed by the insatiable demand for AI computing. In the middle of everything is start-up OpenAI, the maker of ChatGPT, which lit the prairie fire in 2022. It may represent a single point of failure for the AI trade.

China's Rare-Earth Escalation Threatens Trade Talks-and the Global Economy

China's newest restrictions on rare-earth materials would mark a nearly unprecedented export control that stands to disrupt the global economy, giving Beijing more leverage in trade negotiations and ratcheting up pressure on the Trump administration to respond.

The rule, put out Thursday by China's Commerce Ministry, is viewed as an escalation in the U.S.-China trade fight because it threatens the supply chain for semiconductors. Chips are the lifeblood of the economy, powering phones, computers and data centers needed to train artificial-intelligence models. The rule also would affect cars, solar panels and the equipment for making chips and other products, limiting the ability of other countries to support their own industries. China produces roughly 90% of the world's rare-earth materials.

Peru Removes Unpopular President Amid Anger Over Crime

Peru's Congress ousted President Dina Boluarte from power in the latest round of political turmoil in the Andean nation.

Boluarte was impeached Friday by opposition lawmakers on grounds of "moral incapacity," a legal mechanism that has been used by Congress to oust previous presidents. The head of Congress, Jose Jeri, took over as president, becoming Peru's seventh head of state since 2018.

Japan's Komeito Party Withdraws From Ruling Coalition

TOKYO-A major political ally of Japan's ruling Liberal Democratic Party has exited the governing coalition, ending a 26-year-long relationship in a move that could fuel political instability.

"There was a disagreement over the basic stance," regarding political funding issues that caused election losses, Komeito leader Tetsuo Saito said at a news conference Friday.

Thai Central Bank Can Cut More, But Not Much Room Left, Says Deputy Governor

The Thai central bank stands ready to cut rates further, but that alone won't fix the country's economic woes, a top official says.

Fiscal policy needs to play a role too, said Piti Disyatat, deputy governor for monetary stability at the Bank of Thailand in an interview.

Write to [e-mail]

Write to us at [e-mail]

We offer an enhanced version of this briefing that is optimized for viewing on mobile devices and sent directly to your email inbox. If you would like to sign up, please go to https://newsplus.wsj.com/subscriptions.

This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

10-10-25 0524ET