Europe open: Stocks edge higher as focus turns to US bank earnings
European stocks edged higher in early trade after US markets managed to pare losses into the close on Thursday, with investors eyeing the release of some key bank earnings across the pond.
At 0900 GMT, the benchmark Stoxx Europe 600 index and Germany’s DAX were both up 0.5%, while France’s CAC was 0.6% firmer. Meanwhile, oil prices were little changed, with West Texas Intermediate up 0.1% to $53.04 a barrel and Brent crude flat at $55.99.
Lee Wild, head of equity strategy at stockbroker Interactive Investor, said: “Like a pub drunk at closing time, Donald Trump threatens all sorts, but he's impossible to take seriously. That's why traders tend to dismiss his whacky ideas, believing either Congress or common sense will head them off at the pass, while few would oppose a sensible programme of fiscal stimulus.
“And so it was the case Thursday when the Dow's 184-point slump narrowed to little more than 60 points by the close. Yes, Trump failed to flesh out stimulus plans this week, but financial deregulation and some of his better ideas still resonate with buyers.
“Focus on US company earnings will steal some of the spotlight from the hapless Trump in the days leading up to his inauguration. Expectations are reasonably high, and doing the numbers should at least underpin current valuations, possibly teeing stocks up for another assault on 20,000.”
Earnings are due from banking heavyweights JP Morgan, Bank of America and Wells Fargo before the US open.
Investors digested data showing Chinese trade was weaker than expected in December, leading to the first shrinkage in the full-year surplus since 2011. Asia’s largest economy saw net exports fall from $44.2bn in November to $40.8bn in December.
In US dollar terms, exports declined by 6.1% year-on-year following a drop of 1.6% in the month before (consensus: -4.0%), with November’s print having been revised lower from an initial reading of +0.1%.
Imports on the other hand rose by 3.1%, which was nevertheless also down from the 4.7% clip recorded in November.
In corporate news, French media company Technicolor slumped on the back of a profit warning, while London-listed pub group Mitchells & Butlers rallied on a well-received trading update, as it reported a “particularly strong” Christmas period.