Historically high for the Stoxx 600 – Earnings for the sixth consecutive week in the European markets

Most European stock markets ended the week with gains, with investors weighing the recent data on the rise of inflation to new highs with the strong corporate results announced in recent days.

The spike in inflation in the US, China and Europe has hit the investment psychology worldwide this week, but that has not stopped the eurozone market from closing at a new all-time high on Friday and recording its sixth consecutive week of gains.

The Commission this week forecast continued growth for the European Union economy by 5% for 2021 in a total of 27 EU countries and 19 eurozone countries. The estimate was 0.2 percentage points higher than the previous summer.

According to the Commission, growth is expected to be supported by the improvement of the labor market, high savings, favorable financing conditions and the full development of the Recovery and Sustainability Fund.

With regard to inflation, the Commission stressed that after several years of low inflation, the strong resumption of economic activity has been accompanied by the recovery of inflationary pressures, which exceeded estimates.

Eurozone inflation hit a 10-year high of 2.4% in September, and Eurostat’s initial estimates for October were even higher at 4.1%.

It is worth noting that economists in a Reuters poll on Thursday estimated that inflation in the Eurozone will continue to move above the 2% target set by the European Central Bank in 2022. It is noted that eurozone inflation exceeded 4% in the previous month, however, the ECB has diversified from other major central banks by continuing to resist pressure to tighten its monetary policy.

The interest of investors was focused today on the corporate results announced before the start of the meeting by Richemont, AstraZeneca and Deutsche Telekom.

Particularly, Richemont SA announced that its sales in the first half of the year continued to strengthen, as well as that it is in negotiations with Farfetch regarding the sale of the e-commerce platform Yoox-Net-A-Porter. The Swiss luxury goods group announced sales of 8.91 billion euros for the six months to September 30, 65% higher on an annual basis and 20% higher in the corresponding period two years ago, before the pandemic. Its share made a “jump” of 10%.

Deutsche Telekom announced the Improved third quarter revenue and upgraded its estimates for the full year. Its share increased by 2%

In addition, AstraZeneca announced Gains from core activities $ 1.08 per share and earnings increased by 47% to $ 9.74, with its share, however, falling by almost 7%.

In this climate, the dashboard, the pan-European Stoxx 600 strengthened on Friday by 0.3%, recording a record high at 486.75 points. The household products sector added 1.9% and led the profits, while the biggest losses were recorded by oil and gas shares, falling by 0.9%.

In the individual boards, the German DAX recorded marginal gains of 0.07% at 16,094.07 points, the French CAC 40 strengthened by 0.45% to 7,091.40 points, while the British FTSE 100 closed down 0.49% at 7,347.91 points.

In the periphery, the Italian FTSE MIB gained 0.36% to 27,732.39 points, while the Spanish IBEX 35 fell 0.13% to 9,080.80 points.

In corporate news Daimler announced on Thursday that its trucking industry will split on December 10, as the German carmaker seeks to cut costs and increase profit margins to double digits by 2025.

In macro As of today, industrial production in the Eurozone fell in September for the second consecutive month, as delays in deliveries resulting from supply problems hold back manufacturing.

Production from factories, mines and utilities in the region fell 0.2% in September from August, Eurostat said. Economists expected a 0.7% drop.