European stocks higher; global confidence remains strong

By Peter Nurse

Investing.com - European stock markets edged higher Monday, continuing the previous week’s positive tone although gains are limited amid caution over the strength of the region's economic recovery.

At 03:55 ET (08:55 GMT), the DAX index in Germany traded 0.5% higher, CAC 40 in France rose 0.6% and the FTSE 100 in the U.K. climbed 0.6%.

Last week’s positive tone remains Monday, with global equity indices continuing to push higher after the cooler-than-expected U.S. consumer prices lifted hopes that the Federal Reserve will slow its aggressive monetary tightening campaign.

Still, gains are more limited - the benchmark S&P 500 index posted its biggest weekly gain in almost five months last week - after Fed Governor Christopher Waller stated markets shouldn't get carried away over just one "data point."

Additionally, the European Central Bank still has some way to go before it catches up with the extent of the Fed’s tightening, while inflation in the region is still climbing.

The United States might just avoid falling into recession next year, thanks to a resilient job market, analysts at Morgan Stanley said, in a note, but Britain and the Eurozone economies are unlikely to be so lucky.

Data due later Monday is expected to show Eurozone industrial production rising just 0.3% on the month in September, substantially slower growth than the 1.5% rise seen the previous month.

Attention will also be on the U.K. government's new fiscal plan on Thursday, especially after the car crash that was September's mini-budget. U.K. Chancellor Jeremy Hunt has indicated that around £60 billion (£1=$1.1837) in tax increases and spending cuts are coming to tackle a gaping hole in the public finances.

In corporate news, Informa (LON:INF) stock rose 6.6% after the publishing and exhibitions organizer raised its full-year earnings outlook, while S4 Capital (LON:SFOR) stock gained 4.8% after the marketing group said top-line growth looks relatively strong into the fourth quarter despite macroeconomic headwinds.

Rheinmetall (ETR:RHMG) rose 2.8% after the German military equipment manufacturer agreed to acquire Spanish ammunition maker Expal Systems for €1.2B (€1=$1.0343).

Oil prices edged higher Monday, continuing Friday’s positive tone after China’s health authorities cut the quarantine period for incoming travelers, raising hopes of a more substantial relaxation of the country’s Zero-COVID policy.

However, gains are minor as the number of reported cases in China climbed over the weekend, making it difficult for the country’s government to adjust its strict policy as winter approaches.

By 03:55 ET, U.S. crude futures traded 0.4% higher at $89.31 a barrel, while the Brent contract rose 0.4% to $96.41.

Additionally, gold futures fell 0.3% to $1,764.40/oz, while EUR/USD traded 0.1% lower at 1.0343.