February 23, 2024

Lower European Stock Futures; Strong Quarterly Earnings from Deutsche Bank

The German DAX futures contract traded 0.2% lower at 02:00 ET (06:00 GMT). Futures for the French CAC 40 and the British FTSE 100 decreased by 0.4%.

The Outlook for European Stock Markets Is Not Optimistic

The impact on European equities markets is expected to be unfavorable. However, the reading will contrast an overnight decline in U.S. futures after a poor kickoff to Big Tech results week.

Alphabet shares dropped more than 6% after Google’s owner revealed weak ad revenue. Due to the slowing economy, advertising had to cut down on their expenditure. 

According to market share, Google is the world’s most prominent digital advertising platform.

Additionally, the price of Microsoft shares decreased by more than 6%. The software titan was underwhelmed with its sales growth prediction after hours. 

Specifically, its Azure cloud computing service has shown this.

Investors Review More European Bank Quarterly Results

In Europe, the banking sector will be featured prominently due to positive developments.

Deutsche Bank (ETR: DBKGn) is expected to excel on Wednesday. This comes after the massive German banking corporation reported a sharp increase in third-quarter earnings. 

Revenue at investment banks rose as a result, despite a general slowdown in M&A activity.

Santander (BME: SAN), a Spanish lender, has released some reports. It said that the yearly growth in net profit for the third quarter was 11%. 

This is because rising loan loss provisions and expenses were countered by improved revenues across all of its markets.

UniCredit (BIT: CRDI) increased its profit target for 2022. As a result of rising interest rates and reduced loan loss reserves, the second-largest Italian bank experienced this. In the third quarter, profits surpassed forecasts as a result of this.

The quarterly earnings for Standard Chartered (LON: STAN) increased by 40%. This occurred when rising interest rates increased the bank’s profits with a concentration on developing markets. It has also been able to enhance its revenue projection due to this.

Mercedes-Benz (ETR: MBGn) also improved its prognosis for its automotive business. This occurred as third-quarter profits significantly increased. 

At the same time, French catering and food services company Sodexo (EPA: EXHO) announced full-year revenue higher than anticipated. It expects sales and profit margins to reach 2019 levels by 2023.

The Fall in Oil Prices

In Europe on Wednesday, there were no noteworthy economic data releases. This is the case, with October’s consumer confidence levels for France being the essential data.

On Wednesday, oil prices fell. This came after business data showed that U.S.U.S. crude stockpiles increased faster than anticipated last week. 

Fears that a recession in the biggest economy in the world may affect demand have been further fueled by this.

The American Petroleum Institute’s data has produced some results. The statistics revealed that in the week leading up to October 21, U.S.U.S. oil stockpiles increased by 4.5 million barrels. This exceeded expectations for the construction of 200,000 barrels.

Investors are awaiting the Energy Information Administration’s (EIA) official report. For confirmation, this will be made known later in the session.

U.S.U.S. oil futures were trading 0.8% down at $84.67 a barrel by 2:00 E.TE.T. To $90.89, the Brent contract decreased by 0.9%.

Gold futures also increased 0.3% to $1,662.65/oz. EUR/USD was down 0.1% at 0.9962.

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