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European stocks mixed; caution at start of action-packed week

Published 01/29/2024, 03:24 AM
Updated 01/29/2024, 03:35 AM
© Reuters. - European stock markets traded in a muted fashion Monday, at the start of an action-packed week full of event risk, including the Federal Reserve’s first meeting of the year.

At 03:25 ET (08:25 GMT), the DAX index in Germany traded 0.3% lower, while the CAC 40 in France traded 0.1% higher and the FTSE 100 in the U.K. rose 0.1%.

Fed to meet on Wednesday

Investors have started the new week on a cautious note, with the main indices trading in tight ranges ahead of a potentially crucial policy-setting by the Federal Reserve.

The Fed is widely expected to keep interest rates unchanged on Wednesday with investors eagerly awaiting any indication that officials believe they have progressed enough in their battle against inflation to begin cutting rates sooner rather than later.

The U.S. is set to release the January jobs report on Friday, with the economy expected to have added 177,000 new jobs, slowing from 216,000 the prior month.

The Bank of England also meets this week, and is also expected to keep interest rates on hold on Thursday, following on from the European Central Bank keeping interest rates unchanged at a record-high 4% last week.

Ryanair trims annual profit forecast

In the corporate sector, Ryanair (IR:RYA) stock fell 2.9% after the budget airline trimmed its profit forecast for the year to the end of March after some online travel agents stopped selling its flights in December, forcing it to cut fares to fill seats.

Philips (AS:PHG) stock fell 4.4% after the Dutch medical device maker reported another loss in 2023, even though the losses were trimmed compared with the previous year, as it seeks to bounce back from a series of damaging recalls.

Bayer (ETR:BAYGN) stock fell over 5% after the German pharmaceutical giant was ordered by a U.S. court to pay $2.25 billion in damages, the highest amount yet in its ongoing litigation linked to an alleged carcinogenic effect of its Roundup weedkiller.

Holcim (SIX:HOLN) stock rose 5% after the Swiss building materials giant unveiled plans to separate and list its North American business.

The European banking sector is likely to be in focus later this week as a number of the region’s major lenders release quarterly earnings.

Additionally, in the U.S., Alphabet (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT) are due to report results on Tuesday, followed by Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) on Thursday with Meta Platforms (NASDAQ:META) closing out the week on Friday.

Crude gains on Middle East turmoil

Oil prices rose Monday on increased worries of disruptions to supply in the Middle East following a drone attack on U.S. forces in Jordan over the weekend.

By 03:25 ET, the U.S. crude futures traded 0.3% higher at $78.25 a barrel, while the Brent contract climbed 0.3% to $83.21 a barrel.

Both contracts rose last week for a second week in a row and settled at their highest in nearly two months on Friday.

This attack was by Iran-backed militants, according to the U.S. President Joe Biden, and resulted in the death of three U.S. service members, the first deadly strike against U.S. forces since the Israel-Hamas war erupted.

Iran has denied involvement in the attack, but it does raise concerns of a more direct confrontation between the two countries, potentially resulting in regional energy supply disruptions in the oil-rich Middle East.

Additionally, gold futures rose 0.7% to $2,050.85/oz, while EUR/USD traded 0.1% higher at 1.0840.

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