EMEA Morning Briefing : Markets Digest an Eventful November

MARKET WRAPS

Watch For:

France consumer spending, provisional CPI, Germany unemployment, Eurozone flash estimate euro area inflation. No major trading updates expected.

Opening Call:

European stock futures were mixed after Asia markets edged lower. U.S. markets were closed for Thanksgiving, with a shortened Black Friday trading session marking the month's end. The dollar held steady, gold prices rose and oil futures were mixed.

Equities:

As investors enter the final trading day of an eventful month, most bullish Wall Street strategists note that strong earnings growth could continue to drive large-cap stocks prices higher.

The incoming Trump administration's focus on corporate tax cuts and deregulation could help boost company profits and stimulate the economy through increased deficit spending.

"The earnings expectation in the U.S. is quite healthy," Barclays chief U.S. equity strategist Venu Krishna said.

"The fulcrum for earnings strength remains centered on Big Tech. But directionally, the rest of the market is moving along the right path, although at a much slower pace than expected," Krishna added.

Forex:

The U.S. dollar could strengthen further if Trump enacts new trade tariffs, said Aviva Investors economist Vasileios Gkionakis.

The dollar's recent rise is primarily due to strong U.S. data and favorable interest rate differentials, with tariffs contributing less. Tariffs may increase inflation and widen rate differentials, potentially bolstering the dollar as a safe haven.

Bonds:

Current 10-year U.S. Treasury yields present an attractive entry point for bond investors, said Morgan Stanley Investment Management's Jim Caron.

"The yields on 10-year U.S. government bonds are likely to continue to fluctuate between 3.9% and 4.6%," he said, highlighting their appeal for investors seeking stable equity portfolio protection.

Energy:

Oil prices were mixed in thin trading. Geopolitical tensions eased with a 60-day cease-fire agreement between Israel and Hezbollah, said ANZ Research.

ANZ expects OPEC+ to delay planned production hikes, allowing time to assess the impact of U.S. trade and foreign policies, though the group is unlikely to permanently halt voluntary cuts.

Metals:

Gold prices edged higher on the prospects of a December Fed rate cut after the U.S. personal consumption expenditure data came in line with expectations.

Broader markets were muted overnight during the Thanksgiving holiday in the U.S., with the commodities market now pricing in a 70% chance for a 25bps rate cut in December, up from the 56% probability seen a week ago.

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Copper edged higher, as prices for base metals like lead, nickel and copper reached highs not seen in months.

This indicates increased market interest and signals that the sector will likely experience tighter near-term supply dynamics, said Daria Efanova, Head of Research at Sucden Financial.

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Iron ore rose amid prospects of higher demand from the steel sector.

Chinese steel manufacturers will likely boost exports ahead of an expected rise in global trade tensions, ANZ said, adding that it bodes well for demand for the steelmaking material.

China's steel sector has improved, with steel mill operations narrowing losses, said ANZ, noting that strong steel exports and destocking have helped improve profit margins.

TODAY'S TOP HEADLINES

Russia's War Economy Shows New Cracks After the Ruble Plunges

The Russian economy, surprisingly resilient through two-plus years of war and sanctions, has suddenly begun to show serious strains.

The ruble is plunging. Inflation is soaring, and President Vladimir Putin told the Russian people this week that there isn't any reason to panic.

Has China Become the New Japan and Japan the New China?

By now we're well into second- and third-order implications of the Trump administration on markets and investing. Getting too granular here is a fool's errand, as Oaktree sage Howard Marks recently reminded us. Still, noodling on Trump Part Deux, at least directionally, is prudent.

Some of this is blindingly obvious. The oil-and-gas business has a wind at its back, and renewables have a wind in their face. Crypto is rocking, while, with the prospect of Robert F. Kennedy Jr. at the helm of the Department of Health and Human Services, Big Pharma stocks are looking wan.

Stocks Could Soon Trade Through the Night After Exchange Wins SEC Approval

Stock trading all hours, well almost 24/7, moved one step closer Wednesday after a startup received approval from U.S. regulators to open an exchange in 2025.

The Securities and Exchange Commission has approved an application from 24X National Exchange that allows the trading of U.S. securities 23 hours a day, five days a week, but not at weekends.

Bitcoin Gets a Thanksgiving Spike. What's Driving Crypto Holiday Trades.

The Bitcoin price spiked above $97,000 in the early hours of Thanksgiving as the world's largest cryptocurrency looked to mount another charge toward the $100,000 milestone.

U.S. markets may be closed Thursday as Americans enjoy the holiday, but crypto trading never stops. The digital asset was showing some of its trademark volatility as it jumped to $97,336 overnight from a 24-hour low of $92,900 late Wednesday afternoon.

EU Ends Probes on Amazon, Starbucks, Fiat Tax Deals After Court Defeats

The European Union's competition regulator formally closed probes into Amazon, Starbucks and Fiat's European tax cases, bringing an end to three of its attempts to crack down on international companies' tax deals after court defeats.

The regulator's largely symbolic decision Thursday came after EU courts ruled between 2019 and 2023 that the bloc's executive was wrong to charge the Netherlands and Luxembourg with giving companies unfair advantages through tax breaks in a string of in-depth state-aid investigations.

France's bond yields rise above Greece's for first time amid political instability in Paris

Borrowing costs for France hit a 12-year high relative to Germany this week, and briefly rose above those of Greece for the first time ever on Thursday, as markets became roiled by politics in Paris.

The moves reflect a remarkable change in fortunes for the credit rating of French government debt, long considered part of the safe eurozone core, and the paper of Greece, which became all but uninvestable during the European debt crisis around 12-years ago.

Canada Sues Google, Alleging Anticompetitive Online-Ad Practices

OTTAWA-Canada's antitrust watchdog alleges that Google acted unlawfully in building market share in the online-advertising business, marking the latest regulatory headache for the tech giant.

In a notice filed Thursday with Canada's Competition Tribunal, the watchdog-known as the Competition Bureau-said it seeks to "put a decisive end to Google's structural dominance and anticompetitive practice, [and] restore competition" in the country's online-advertising marketplace.

These Stocks Can Get a Black Friday Bump as U.S.-China Chip Fears Ease

Stock in Applied Materials and other U.S.-listed chip makers could get a Black Friday boost after a report said the Biden administration's crackdown on semiconductor sales to China will be less severe than some had expected. European chip makers were rising Thursday on the news, with U.S. markets closed for the Thanksgiving holiday.

Shares in ASML, which makes the lithography machines that are used to produce chips, were up 3.8%, while European peers ASM International and BE Semiconductor Industries, and Asian rival Tokyo Electron also rose on Thursday.

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Expected Major Events for Friday

00:01/UK: Oct Zoopla House Price Index

00:01/UK: Nov BRC-Sensormatic IQ Footfall Monitor

05:30/NED: Oct PPI

05:30/NED: Nov Flash Estimate CPI

06:00/FIN: 3Q GDP

06:00/FIN: Oct Retail sales

07:00/NOR: Oct Retail Sales

07:00/SWE: Oct Retail sales

07:00/SWE: 3Q GDP

07:00/GER: Oct Foreign trade price indices

07:00/DEN: Oct Unemployment

07:00/TUR: 3Q GDP

07:00/GER: Oct Retail Trade

07:30/HUN: Oct Employment & unemployment

07:30/HUN: Oct PPI

07:45/FRA: 3Q Job creation

07:45/FRA: Oct Household consumption expenditure in manufactured goods

07:45/FRA: Oct PPI

07:45/FRA: Nov Provisional CPI

07:45/FRA: 3Q GDP - detailed figures

08:00/SPN: Oct Retail Sales

08:00/SWI: Nov KOF economic barometer

08:00/SWI: 3Q GDP

08:00/CZE: 3Q GDP

08:55/GER: Nov Labour market statistics (incl unemployment)

09:00/ITA: Sep Industrial turnover

09:00/BUL: Oct PPI

09:00/ICE: 3Q GDP

09:30/UK: Oct Money and Credit - Lending to Individuals, Lending to Businesses, Broad Money and Credit

09:30/UK: Oct Monetary & Financial Statistics

09:30/UK: Oct Bank of England effective interest rates

10:00/MLT: Oct PPI

10:00/CRO: Oct Industrial Production Volume Index

10:00/CYP: Oct PPI

10:00/GRE: Oct PPI

10:00/GRE: Sep Turnover Index in Retail Trade

10:00/ITA: Nov Provisional CPI

10:00/ITA: Nov Cities CPI

10:00/BEL: 3Q Final GDP

10:00/LUX: Oct PPI

All times in GMT. Powered by Onclusive and Dow Jones.

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

(END) Dow Jones Newswires

11-29-24 0019ET