Category: Market Summary

European equities moved higher on Thursday as investors digested a heavy flow of corporate results alongside fresh U.K. economic data.

By 08:10 GMT, Germany’s DAX was up 1%, France’s CAC 40 had added 1.4% and London’s FTSE 100 was 0.4% firmer.

Earnings dominate sentiment

Results from several of Europe’s largest companies for the final quarter of 2025 were in focus. While the outlook for corporate performance has improved somewhat, LSEG data still point to a contraction in fourth-quarter earnings across the region—potentially marking the weakest showing in seven quarters.

“Europe lacks the AI-driven growth engines powering the U.S., but investors are focusing on the cyclical earnings recovery,” analysts at Lombard Odier said in a note. “We expect earnings growth to rise from -3.5 in 2025 to 9% in 2026, slightly below consensus.”

“Almost 25% of corporates have reported, with blended earnings growth – the combination of estimated and reported growth so far – close to 5%. Companies are struggling with the effects of a strong euro and uneven demand.”

Among the day’s movers, Mercedes-Benz Group (TG:MBG) slid after posting a 57% drop in 2025 earnings and a 9% decline in revenue. The luxury carmaker warned that margins in its automotive division could weaken further this year, citing elevated costs, softness in China and global tariff pressures.

By contrast, Hermès (EU:RMS) reported another robust quarter, with fourth-quarter revenue rising 9.8% at constant exchange rates, ahead of expectations for 8.4%. Sales in the Americas climbed 12.1%, outpacing forecasts of around 9%.

Unilever plc (LSE:ULVR) also topped estimates for underlying fourth-quarter sales growth, driven by strong demand for brands such as Dove and Vaseline, although the group cautioned that slower market conditions could weigh on performance in 2026.

British American Tobacco plc (LSE:BATS) posted a 2.3% increase in annual profit as its Velo nicotine pouches gained traction and newer vaping and heated tobacco products expanded sales.

Thyssenkrupp AG (TG:TKA) exceeded expectations in the first quarter, with adjusted EBIT of €211 million, helped by a solid contribution from its Steel Europe division.

Anheuser-Busch InBev (EU:ABI) delivered 7.5% growth in fourth-quarter underlying earnings, surpassing forecasts as all three Americas regions outperformed on both volume and revenue despite subdued consumer spending.

Siemens AG (TG:SIE) lifted its full-year outlook after reporting higher first-quarter orders, revenue and operating profit, reflecting broad-based industrial strength.

In deal news, U.S. asset manager Nuveen agreed to acquire Schroders plc (LSE:SDR) in a transaction valued at just under £10 billion ($13.5 billion), creating a combined entity with close to $2.5 trillion in assets under management.

U.K. economy inches higher

Data released earlier showed the U.K. economy expanded by 0.1% in December, slightly slower than November’s 0.2% pace. Quarterly growth for the final three months of 2025 also came in at 0.1%, unchanged from the previous quarter.

The Bank of England left interest rates unchanged at its first meeting of 2026, following six cuts since August 2024.

In the U.S., January nonfarm payrolls rose by 130,000, beating expectations of 70,000, while the unemployment rate dipped to 4.3% from a projected 4.4%. The figures reinforced expectations that the Federal Reserve will likely keep rates on hold until at least the latter half of the year.

Oil edges up on geopolitical tensions

Oil prices ticked higher amid ongoing friction between Washington and Tehran, fueling concerns over potential supply disruptions.

Brent crude futures gained 0.4% to $69.69 per barrel, while U.S. West Texas Intermediate rose 0.5% to $64.97. Both benchmarks had climbed about 1% on Wednesday as reports suggested the U.S. could deploy a second aircraft carrier to the region.

Although recent talks between Iran and the U.S. hinted at limited progress, no comprehensive agreement has been reached regarding Tehran’s nuclear program, keeping energy markets cautious.

European equities traded in mixed fashion on Wednesday, with investors reacting to a fresh wave of corporate earnings. Technology names faced selling pressure after Dassault flagged ongoing weakness in the European automotive sector.

The U.K.’s FTSE 100 Index advanced 0.8%, while France’s CAC 40 hovered around flat levels. Germany’s DAX Index slipped 0.3%.

Among individual movers, TotalEnergies (EU:TTE) gained 1.3% after the energy group lifted its final 2025 dividend by 5.6% to €3.40 per share.

In contrast, software company Dassault Systemes (EU:DSY) plunged 20% following weaker-than-expected fourth-quarter results and a subdued outlook for the year ahead.

Dutch recruitment specialist Randstad (EU:RAND) dropped 8.5% after issuing cautious guidance for the first quarter.

Supermarket operator Ahold Delhaize (EU:AD) climbed 7% as its fourth-quarter earnings topped market forecasts.

Heineken (EU:HEIA) rose 5.3% despite announcing plans to cut up to 6,000 jobs globally as it navigates a challenging demand environment.

German bank Commerzbank (TG:CBK) fell 3%, even after posting a record €4.5 billion operating result for the 2025 fiscal year.

Siemens Energy (TG:SIE) rallied 6% after reporting that first-quarter profit nearly tripled, supported by strong AI-related demand for gas turbines and grid infrastructure equipment.

Thyssenkrupp Nucera (TG:NCH2), a producer of electrolysers, edged up 1.1% after reaffirming its FY26 guidance.

Swiss elevator manufacturer Schindler Holding (TG:SHR) slid 8% after forecasting low- to mid-single-digit revenue growth in local currencies for 2026.

In London, engineering firm Renishaw (LSE:RSW) advanced 2.7% on stronger-than-expected half-year figures.

Housebuilder Barratt Redrow (LSE:BTRW) declined 6.3% after reporting first-half profits that missed expectations.

Meanwhile, shares of London Stock Exchange Group (LSE:LSEG) rose 2.5% amid reports that activist investor Elliott Management has taken a sizable position in the company.

U.S. equity futures moved modestly higher early Wednesday as investors positioned for a delayed monthly employment report and continued to digest a heavy slate of corporate earnings.

At 02:33 ET, Dow futures were up 91 points, or 0.2%. S&P 500 futures rose 12 points, also 0.2%, while Nasdaq 100 futures added 48 points, or 0.2%.

The Dow Jones Industrial Average closed at a fresh all-time high on Tuesday, but the broader S&P 500 and the tech-focused Nasdaq Composite ended lower, weighed down in part by renewed debate over the disruptive impact of emerging artificial intelligence tools.

Financial stocks were under pressure after wealth-management start-up Altruis unveiled an AI-powered tax planning solution. The Charles Schwab Corporation (NYSE:SCHW) slid more than 7%, while Raymond James Financial, Inc. (NYSE:RJF) posted its steepest single-day drop since the height of the 2020 pandemic turmoil.

The weakness mirrored recent AI-driven selloffs in insurance brokers and software names, highlighting broader concerns that the fast-evolving technology could significantly reshape multiple industries. Still, some analysts argue that market anxiety may be running ahead of fundamentals.

Soft retail sales data also dampened sentiment, prompting speculation that U.S. growth could moderate in 2026. Expectations for a more dovish Federal Reserve stance increased, with CME FedWatch indicating a rising probability of an April rate cut.

Focus turns to U.S. jobs report

The main event of the day is the delayed January employment report.

Economists forecast that the U.S. economy added approximately 66,000 jobs last month, compared with 50,000 in December.

At its latest policy meeting, the Federal Reserve described the labor market as “stabilizing” after a period of sluggishness. That assessment, combined with inflation that remains elevated but steady, led policymakers to hold interest rates in the 3.5%–3.75% range.

Earlier this week, White House economic adviser Kevin Hassett warned that advances in artificial intelligence could weigh on job growth in the coming months, even as productivity improves.

With uncertainty surrounding both employment trends and inflation — the Fed’s dual mandates — the outlook for 2026 remains unclear. The payrolls data, along with Friday’s consumer price index, may offer further guidance on the likely trajectory of interest rates.

“Today’s jobs report is a pivotal event for the [foreign exchange] market. A materially weak print would likely pave the way for markets to price in a cut in April,” analysts at ING Groep N.V. said.

Ford forecasts strong year despite tariff-related hit

Ford Motor Company (NYSE:F) shares edged higher in extended trading after the automaker delivered profit and cash flow projections that exceeded expectations.

Ford guided for annual operating income of about $9 billion, above the roughly $8.85 billion anticipated by analysts. It also forecast free cash flow of $5.5 billion, topping market estimates.

However, the company reported a fourth-quarter operating loss of $11.1 billion — the largest in its history — after booking a $900 million charge tied to a delay in implementing a tariff-relief program introduced during the Trump administration.

Chief Financial Officer Sherry House said the company was informed of the “unexpected” change “very late” in 2025.

Takeover tensions around Warner

Separately, developments continued in the high-profile takeover battle involving Warner Bros. Discovery, Inc. (NASDAQ:WBD).

According to the Wall Street Journal, activist investor Ancora Holdings has accumulated a stake worth roughly $200 million and is preparing to urge Warner to reject a sweeping offer from Netflix, Inc. (NASDAQ:NFLX) for its film and television assets and HBO Max streaming service.

The report said Ancora may argue that Warner has not sufficiently engaged with a competing proposal from Paramount Skydance, led by David Ellison, which seeks to acquire the entire company rather than selected divisions.

Paramount has reportedly enhanced its bid by offering additional cash to Warner shareholders for each quarter the transaction remains incomplete and by covering any breakup fee associated with terminating the Netflix agreement. Nonetheless, its total offer — including debt — remains at $108.4 billion.

Gold and oil advance

Gold prices strengthened after weak U.S. retail sales data fueled expectations of slowing economic momentum, sharpening focus on the upcoming payrolls release.

Spot gold rose 0.4% to $5,047.08 per ounce, while futures gained 0.8% to $5,071.34, though prices remained below recent record highs.

Oil markets also moved higher. Brent crude climbed 1.2% to $69.64 per barrel, and U.S. West Texas Intermediate crude added 1.3% to $64.81 per barrel.

European markets struggled for clear direction on Wednesday morning, with investors positioning cautiously ahead of the release of closely watched U.S. labor market data later in the day.

By 09:12 GMT, the STOXX Europe 600 was down 0.1%. Germany’s DAX slipped 0.2%, while France’s CAC 40 fell 0.4%. In contrast, the U.K.’s FTSE 100 advanced 0.4%.

Earnings in focus across Europe

Corporate results continued to shape trading sentiment across the region.

Koninklijke Ahold Delhaize N.V. (EU:AD) climbed after reporting fourth-quarter net sales of €23.5 billion, representing a 6.1% increase at constant exchange rates. Comparable sales excluding fuel rose 2.5%.

Heineken N.V. (EU:HEIA) announced plans to cut up to 6,000 jobs globally and signaled slower profit growth this year relative to 2025 amid soft demand. Shares nonetheless edged higher following the update.

TotalEnergies SE (EU:TTE) said it would reduce share buybacks by 62% in the current quarter due to weaker oil and gas prices. Analysts broadly endorsed the company’s more cautious stance, and the stock gained 1.4%.

In Germany, Siemens Energy AG (TG:SIE) jumped more than 5% after first-quarter net profit nearly tripled, supported by strong AI-related demand for gas turbines and grid infrastructure.

Across the Atlantic, Ford Motor Company (NYSE:F) shares ticked up in after-hours trading after the automaker issued profit and cash flow guidance above expectations, despite absorbing a $900 million impact from a delay in tariff relief measures introduced under President Donald Trump.

Other major U.S. names reporting Wednesday include Cisco Systems, Inc., McDonald’s Corporation, and T-Mobile US, Inc..

Spotlight on U.S. labor market data

Market attention is now turning to U.S. employment figures scheduled for release at 08:30 ET, following a previous delay.

Economists expect the report to show that approximately 66,000 jobs were added in January, compared with 50,000 in December.

At its most recent meeting, the Federal Reserve characterized the labor market as “stabilizing” after earlier signs of softness. Combined with persistently elevated — though steady — inflation, this assessment prompted policymakers to leave interest rates unchanged at 3.5% to 3.75%.

However, White House economic adviser Kevin Hassett recently cautioned that advances in artificial intelligence could weigh on job growth in the months ahead, even as productivity improves.

The broader outlook for 2026 remains uncertain given ambiguity around both employment and inflation — the Fed’s two core mandates. In addition to the jobs report, Friday’s consumer price index data may offer further insight into the likely path of interest rates.

“[E]quities don’t want to see a collapse in payrolls, but with Corporate America increasingly preaching about efficiencies and productivity enhancements, it’s expected that job creation will remain tepid going forward,” analysts at Vital Knowledge wrote.

Oil rebounds amid geopolitical uncertainty

Oil prices moved higher as traders monitored developments in U.S.–Iran relations and assessed travel demand ahead of a major Chinese holiday.

Crude recovered part of Tuesday’s losses, aided by a softer dollar ahead of key U.S. economic releases.

Brent futures rose 1.4% to $69.74 per barrel, while West Texas Intermediate gained 1.5% to $64.90.

Iranian officials said nuclear talks with the U.S. had allowed Tehran to evaluate Washington’s seriousness and indicated that diplomatic engagement would continue. The comments followed discussions last week over Iran’s nuclear program, after President Trump dispatched additional warships to the Middle East.

Although both sides cited progress, tensions resurfaced after the U.S. issued a warning to vessels transiting the Strait of Hormuz. Reports also suggested that Trump is weighing the deployment of a second aircraft carrier near Iran, potentially escalating regional strains.

The evolving situation has prompted traders to factor in a geopolitical risk premium, amid concerns that any military confrontation could disrupt Iranian oil exports.

UK equities moved higher at the start of Wednesday trading, outperforming major European peers that slipped into negative territory. Gains in commodity-related shares helped lift sentiment, while sterling recovered against the dollar after recent pressure linked to political uncertainty.

Precious metals producers were among the strongest performers as gold prices climbed. Oil majors and banking stocks also added support, pushing the benchmark index upward.

By 08:42 GMT, the blue-chip FTSE 100 was up modestly, while the pound strengthened 0.2% against the dollar to 1.3687. On the continent, Germany’s DAX fell 0.4%, with France’s CAC 40 also down 0.4%.

UK round-up

London Stock Exchange Group plc (LSE:LSEG) advanced in early trading after the Financial Times reported that activist investor Elliott Investment Management L.P. is assembling a “significant” position in the company. According to the report, Elliott has been engaging with management in an effort to enhance the exchange operator’s performance.

Meanwhile, Barratt Redrow plc (LSE:BTRW), the UK’s largest homebuilder, said first-half completions surpassed market expectations. The group delivered 7,305 homes during the period, a 7% increase on a pro-forma basis year on year, ahead of analyst forecasts of roughly 6,889 units. Despite stronger volumes, profitability came in below consensus projections. The company reiterated its full-year volume guidance but flagged ongoing margin pressures.

European equities were largely subdued on Tuesday, as investors digested a mixed flow of corporate earnings and waited for key U.S. economic data later in the week that could influence expectations for Federal Reserve interest rates.

France’s CAC 40 edged up 0.1%, while Germany’s DAX slipped 0.1%. The U.K.’s FTSE 100 lagged its peers, down 0.4%.

Dutch healthcare group Philips (EU:PHIA) stood out on the upside after reporting strong fourth-quarter results and setting ambitious targets for 2026.

Shares of luxury group Kering (EU:KER), owner of Gucci, also jumped after the company reported an acceleration in sales momentum in the final quarter of 2025.

Pharmaceuticals group AstraZeneca (LSE:AZN) traded higher after forecasting continued revenue and earnings growth in 2026, supported by strong demand for its cancer treatments.

In contrast, BP Plc (LSE:BP.) shares came under pressure after the energy major suspended its share buyback programme and reported a wider replacement cost loss for the fourth quarter.

Travel stocks were weaker as well, with TUI (TG:TUI1), Europe’s largest tour operator, sliding despite posting solid quarterly results and reaffirming its full-year targets.

European luxury stocks moved higher on Tuesday, supported by signs that trading at sector heavyweight Kering (EU:KER) held up better than expected in the fourth quarter, easing some concerns around the pace of its turnaround.

Shares in fellow luxury names such as Salvatore Ferragamo (BIT:SFER) and Burberry (LSE:BRBY) were up more than 2% by mid-morning in Europe. Rival group LVMH, the diversified luxury conglomerate spanning fashion, wines and spirits, also edged higher, gaining around 0.8%.

Kering itself led the gains, with its shares jumping more than 10%, extending a strong rally that began after the company announced the appointment of Luca de Meo as chief executive last June.

The former Renault boss has been brought in to drive a broad restructuring of the group. Since taking the helm, de Meo has focused on reducing debt, streamlining governance and sharpening the portfolio. In October, Kering agreed a €4bn deal to sell its beauty business and certain brand licences to L’Oréal.

In the fourth quarter — de Meo’s first full period as CEO — Kering reported a 3% decline in currency-adjusted sales year on year. That result compared favourably with a 5% drop expected by analysts, according to Visible Alpha forecasts cited by Reuters.

Addressing analysts and investors, de Meo reiterated his ambition to return Kering to growth in 2026 and to improve margins across all of the group’s brands.

Investor focus is now shifting to late February, when Gucci’s new creative director, Demna, is due to present his first collection at a Milan show. The performance of Gucci remains critical for Kering, as the brand accounts for a substantial share of the group’s profits.

Gucci’s revenue fell 10% in the quarter, marking the tenth consecutive quarterly decline. However, the drop was less severe than many in the market had anticipated, Reuters noted, helping to underpin the positive reaction across the luxury sector.