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European stocks higher; German factory orders jump, Maersk warns of demand hit

Published 2023-08-04, 04:14 a/m
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Investing.com - European stock markets edged higher Friday, as investors digested more corporate earnings, including from tech giants Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN), ahead of the release of the eagerly-awaited U.S. nonfarm payrolls report.

At 03:45 ET (07:45 GMT), the DAX index in Germany traded 0.3% higher, the CAC 40 in France climbed 0.4% and the FTSE 100 in the U.K. traded 0.1% higher.

Quarterly earnings continue, Maersk warns of demand hit

In Europe, the corporate earnings season continued Friday, with AP Moeller-Maersk (CSE:MAERSKb) stock falling 1.7% after the shipping giant warned of a steeper decline in global demand for shipping containers by sea this year prompted by muted economic growth and customers reducing inventories.

Credit Agricole (EPA:CAGR) stock rose 4.4% after France's second-largest listed bank reported better-than-expected quarterly earnings, driven by strong insurance and consumer finance performances.

Airbus Group (EPA:AIR) stock rose 0.2% after the European aircraft manufacturer deliveries rose 11% in the first seven months of the year to 381 airplanes.

Still, a lot of attention will be on Wall Street after Apple, the world's largest company by market capitalization, posted its third straight quarter of declining sales and predicted a similar performance in the current period.

On the flip side, online retail giant Amazon impressed as it reported sales growth and profit that beat expectations as hefty cost cuts delivered a leaner company.

Talk of additional Chinese stimulus helps tone

European stocks were given a minor boost early Friday on the back of more talk from the Chinese government of additional stimulus measures to boost the second-largest economy in the world, and a major export market for many of Europe’s largest companies.

China’s top economic committees said in a joint statement on Friday that the government will unlock more measures to boost consumer spending and improve local liquidity, but offered no major details.

Cloudy eurozone economic picture

Additionally, German factory orders climbed a chunky 7% on the month in June, a much better result than the drop of 2.0% expected, helped by sharp gains in the aerospace sector.

However, excluding these large orders, overall monthly activity would have declined by 2.6% in June, suggesting the overall picture remains very cloudy.

French industrial production fell 0.9% in June, a sharp fall from 1.1% growth the prior month.

Investor attention will also be on construction PMI data from the eurozone, U.K. and Germany, as well as eurozone retail sales.

However, the day’s highlight will be the release of the official U.S. jobs report, which is expected to show payrolls rose 200,000 in July, a small reduction from the 209,000 jobs created the prior month.

Any signs of resilience in the jobs market would likely provide the Federal Reserve with more headroom to keep raising interest rates.

Crude prices edge higher after further output cuts

Oil prices edged higher Friday, on course for the sixth consecutive week of gains on the back of output cuts by Saudi Arabia and Russia, two of the world’s largest producers, tightening global supplies.

Saudi Arabia extended on Thursday a voluntary oil production cut of 1 million barrels per day until the end of September, while Russia has also said it will cut its oil exports by 300,000 barrels per day next month.

These cuts came just before a meeting of the Organization of Petroleum Exporting Countries and allies later this session, which makes further cuts from the cartel unlikely.

By 03:45 ET, the U.S. crude futures traded 0.4% higher at $81.89 a barrel, while the Brent contract climbed 0.4% to $85.44.

Additionally, gold futures fell 0.1% to $1,968.15/oz, while EUR/USD traded 0.1% higher at 1.0948.

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