European stocks edged higher on Thursday as market sentiment steadied ahead of Netflix earnings.

"In the absence of pivotal macro data, investor focus remains on the earnings season," UniCredit said.

Meanwhile, geopolitics have been pushed to the background as an Israeli response to Iran's weekend attack "for the moment... does not seem imminent," IG said.

Shares on the Move

Hipgnosis Songs Fund agreed to a $1.40 billion takeover by Apollo-backed music company Concord Chorus. The fund's shares rose around 30%.

Lagarde Speech

Christine Lagarde told a forum in Washington D.C. on Wednesday that collective funding of European projects including defense could become more common.

The major European Union-wide investment project aiming to shore up economies amid the shocks of the pandemic and the Russia-Ukraine war, worth hundreds of billions of euros, is due to come to an end in the coming years, but further collectively financed investment and bonds could follow, including for defense purposes, Lagarde suggested.

"When faced with the urgent need to defend ourselves and stand up for our values, we are prepared to transgress rules that seemed intrasgressable, and shoot down taboos that we thought would be the rule forever."

Lagarde also said private capital is needed to raise the money vital to the green transition to fight climate change.

She estimates more than $600 billion a year until 2030 is needed for the shift and says European governments will struggle to fund this themselves. The climate threat remains, as does the political resolve to face it, Lagarde said.

"It will need a shift from bank lending to capital markets."

U.S. Markets:

Stock futures were rising with Netflix earnings in the spotlight. Earnings are also due from Elevance Health and Blackstone.

On the economic front, data is expected to show that home sales slowed by nearly 5% in March.

Stocks to Watch

Advanced Micro Devices, Nvidia and Micron Technology rose premarket following TSMC's report. TSMC reported its first profit rise in a year, underscoring how the AI boom has fueled demand for advanced chips. Its ADRs edged up in premarket trading.

Duolingo said it will be added to the S&P MidCap 400 on April 22. It replaces Cable One, which will be moved to the S&P SmallCap 600. Duolingo shares were up 7.3%.

Netflix was rising 0.6% in premarket trading ahead of its first-quarter earnings report scheduled for after the closing bell.


Morgan Stanley Research expects the dollar's resilience to endure, building on gains versus the euro and the Chinese yuan in the short term due to the U.S. business cycle. The market consensus is too negative on the dollar currently, it said.

The dollar's dominant reserve currency status--which is expected to endure despite "an increasingly multipolar world"--should provide long-term support for the currency. This backs Morgan Stanley's current preference for the dollar, although periods of weakness are to be expected due to cyclical factors and valuations.

The dollar and Treasury yields dropped, but the trend of dollar strength should continue, Brown Brothers Harriman said.

Late Wednesday, finance ministers from Japan and South Korea expressed concerns about their currencies' recent depreciation against the dollar; earlier this week Bank Indonesia intervened to stabilize the rupiah; and overnight the People's Bank of China warned against one-sided yuan moves, it said.

"As long as U.S. economic activity remains solid and monetary policy divergence persists; the cyclical dollar uptrend is intact."


The 10-year Treasury yield is likely to continue rising, with key resistance at October's peak of 5.021%, UOB said.

However, the daily relative strength index is approaching the most overbought since October 2023, so it's less clear whether there's sufficient momentum for the 10-year yield to reach 5.021%, UOB added.

Taking into account other technical indicators and weekly time horizon, the odds of the 10-year yield reaching October's peak in the next couple of months seems low, UOB said.

Fiscal concerns put upcoming rating reviews for France and Italy in focus, and France could be downgraded by S&P at the end of May, NatWest Markets said.

"It is currently on negative outlook and being able to demonstrate a viable path to a lower debt/GDP ratio remains one of the key indicators that rating agencies are considering with regards to a shift in the outlook."

Arguably, the fiscal trajectory for France is in the wrong way for a revision of the outlook to stable, NatWest said.

"Whilst Italy's deficit woes will continue to make headlines, we are less worried about a near-term impact on its rating."

Edmond de Rothschild Asset Management said there are opportunities in bond markets despite tighter spreads.

"Rates are now high in absolute terms so they offer some protection against any economic accident. Lower rates would offset any spread widening."

Edmond de Rothschild sees subordinated financial debt relatively more appealing than corporate bonds and it is overweight emerging country bonds as they are expected to benefit from an interest-rate cut cycle by the Federal Reserve and China's economic recovery.


Oil prices edged lower as traders discounted risks of a broader war in the Middle East, while a fourth straight weekly build in U.S. crude inventories and prospects of higher-for-longer interest rates weighed on sentiment.

"The lack of an immediate response by Israel to Iran's weekend attack has seen the market reduce its geopolitical risk premium," ANZ Research said.

Fears of a widening conflict continued to keep markets on edge, but the fact that no physical barrels have been taken off the market and OPEC+ has significant spare capacity reassured investors.

Meanwhile, "a bearish EIA inventory report appears to have been the perfect opportunity for investors to lock in profits after the recent gains," ANZ added.


Metals prices rose, with gold futures gaining 0.2% and base metals gaining on Russian sanctions.

MUFG reiterated its 2024 commodities views that gold is its most bullish call this year on a trifecta of Fed cuts, supportive central bank demand and bullion's role as the geopolitical hedge of last resort.


Nokia Expects Demand in Mobile Networks to Pick Up

Nokia said the first quarter marked the low point in mobile networks demand, with activity expected to progressively pick up through the remainder of 2024.

The Finnish telecommunications company's first-quarter earnings beat expectations, with lower sales of its gear offset by a one-off bump from catch-up payments related to delayed licensing deals with cell phone manufacturers.

Danone Backs Guidance After Sales, Volumes Beat Expectations

Danone backed its guidance for the year after first-quarter like-for-like sales rose ahead of expectations, with volume growth across all regions and categories.

The French food company on Thursday said it expects like-for-like sales growth of between 3% and 5% in 2024, and confirmed that it anticipates a moderate improvement in recurring operating margin.

EU March Car Sales Recorded Biggest Drop in 16 Months

Registrations of new cars in the European Union slipped further than they have in more than a year in March, upset by the Easter holiday and in line with a trend of softening demand.

The bloc's new-car registrations, which mirror sales, fell 5.2% on year-the largest monthly drop since November 2022, when sales dipped 6.1%, according to the European Automobile Manufacturers' Association.

ABB Raises Profitability Guidance Despite Revenue Miss

ABB raised its profitability guidance for 2024, but reported flat revenue for the first quarter that missed consensus expectations.

The Swiss industrial-technology company said Thursday that strong demand, particularly from data centers and utilities at its key electrification division, resulted in a stronger-than-anticipated order momentum in the quarter. Orders for the group as a whole, though, fell compared with last year's record high due to declines at its automation and robotics segments.

BP to Simplify Organization, Reduce Size of Leadership Team

BP said it will simplify its organizational structure and cut the size of its leadership team as it seeks to reduce duplication and complexity in management reporting lines.

The changes are part of a plan to turn the British energy giant into an integrated energy company and move away from its image as an oil major and invest more in low-carbon activities.


Fed's Mester Says Recent Inflation Means Longer Wait for Rate Cuts

Cleveland Federal Reserve President Loretta Mester is the latest central bank official to talk down the likelihood of interest-rate reductions in the near future.

Mester said Wednesday that the first three months of 2024 were a bump in the road in the fight against inflation, and the Federal Reserve should take a patient approach to changing interest rates until more data comes in.

Pension Funds Are Pulling $325 Billion From Stocks

Stock portfolios at large pension funds had a blockbuster run. Now, managers are cashing out.

Corporate pension funds are shifting money into bonds. State and local government funds are swapping stocks for alternative investments. The nation's largest public pension, the California Public Employees' Retirement System, is planning to move close to $25 billion out of equities and into private equity and private debt.

China Pledges to Steady Yuan as Asian Currencies Come Under Pressure

China's central bank reiterated its commitment to a stable yuan, joining the chorus of Asian officials concerned about weakening regional currencies.

The People's Bank of China said it is steadfast in its aim of keeping the yuan steady at a reasonable and balanced level, according to a post on its account on social-media platform WeChat on Thursday.

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