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At 4:10 AM ET (0810 GMT), the DAX in Germany traded 0.6% lower, the CAC 40 in France fell 0.3% and the U.K.’s FTSE 100 dropped 0.2%.
European stocks are set for strong gains in October, boosted by a swathe of positive earnings, but the week is set to end on a negative note after weaker than expected quarterly earnings from both Apple and Amazon raised fears about the impact of global supply chain issues coming into the holiday season.
Apple, in particular, noted that supply chain problems cost it $6 billion in sales during the company’s fiscal fourth quarter, and Chief Executive Tim Cook said the impact will be even worse during the current holiday sales quarter.
Back in Europe, BNP Paribas (OTC:BNPQY) stock rose 0.3% after the French bank, the largest in Europe, launched a share buyback program for a maximum total of 900 million euros ($1 billion). It posted a strong rise in third-quarter profit on lower provisions for pandemic-related loan losses and a sharp rise in equity trading.
Daimler (OTC:DDAIF) stock rose 2.5% after the German carmaker reported a higher quarterly net profit despite the global semiconductor chip shortage, as it focused on higher-margin cars and on cost cutting.
Air France KLM (OTC:AFLYY) stock rose 3% on returning to profit in the third quarter, after a loss in the same period in 2020. Passenger numbers almost doubled thanks to the easing of coronavirus travel curbs.
Turning to economic data, French GDP grew 3.0% in the third quarter, more than expected, while German GDP grew by 1.8% during the same period, which was less than the 2.2% expected.
However, the main focus will be on the October inflation data for the region, especially after ECB President Lagarde’s comments at her press conference, which struck some as signalling an important change in outlook on interest rates.
Crude prices stabilized Friday, but were on course for their first weekly drop in months as the heat comes out of a near two-month rally prompted by record high gas prices in Europe and China.
Attention now turns to next Thursday’s meeting of the Organization of the Petroleum Exporting Countries and its allies including Russia, a group called OPEC+. These top producers are expected to stick to their plan to add 400,000 barrels a day of supply each month until April 2022.
By 4:10 AM ET, U.S. crude futures traded 0.2% higher at $82.95 a barrel, while the Brent contract rose 0.3% to $83.89. Both benchmarks were on track to fall about 1% for the week – the first weekly drop in 10 weeks for WTI and the first in eight weeks for Brent.
Additionally, gold futures fell 0.4% to $1,795.75/oz, while EUR/USD traded 0.1% lower at 1.1665.
