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  • by Smriti Mathur
  • Aug 08, 2022
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European stocks set to climb as traders assess earnings, economic data

 

Key Takeaways:

  • Following unexpectedly strong US employment data on Friday, forecasts for a recession were lowered. The Fed is likely to tighten monetary policy more forcefully to combat inflation as a result.
  • Siemens Energy, Porsche, and BioNTech are among the businesses reporting their earnings before Monday's bell.

 

European markets rose on Monday as investors assessed the possibility of a recession by monitoring company results and major economic data points.

By late morning, the pan-European Stoxx 600 index had risen 0.7 percent, with technology companies rising 1.3 percent to lead advances across all sectors and major bourses.

The European blue-chip index fell roughly 0.8 percent on Friday after unexpectedly good US employment data dropped forecasts for a recession, increasing the prospect of the Federal Reserve tightening monetary policy more forcefully to combat inflation.

Overnight, Asia-Pacific markets were uneven, with Hong Kong's tech-heavy Hang Seng index dragging on the region.

 

US stock futures edged higher as the S& P 500 had its third consecutive winning week, with investors looking ahead to critical inflation data on Wednesday. 

In Europe, the Sentix economic mood index for the eurozone climbed somewhat from the previous month, but it still indicated a high chance of recession throughout the 19-member single currency bloc.

"In the same manner that Erwin Schrödinger's cat was both dead and alive at the same time," said HSBC Global Economist James Pomeroy, "the global economy may be both in a recession and not - at least not yet."

"Over the last month, the confusing signals haven't become any clearer, with a second quarterly drop in US GDP in contrast with firmer monthly data, upside surprises in European GDP data, and a series of releases indicating that consumers continue to spend despite their pessimistic view."

Individual share price action in Europe has been driven by corporate results, with Siemens Energy, Porsche, and BioNTech among the firms reporting before the bell on Monday.

Hargreaves Lansdown, a British financial services business, rose more than 7% to top the Stoxx 600 after Deutsche Bank boosted its share price objective.

Future, a British media firm, plummeted 5% to the bottom of the index.

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