European Markets Edge Higher Amid Earnings Parade, Fed Decision Fallout

By Scott Kanowsky

Investing.com -- European markets rose on Thursday, as investors weighed both the latest batch of company results and a second 75 basis point rate hike by the U.S. Federal Reserve in two months.

At 03:36 EST (0736 GMT) the pan-European STOXX 600 was higher by 0.50% and the DAX in Germany also traded up by 0.10%. Losing some ground was France's CAC 40, which slipped slightly by 0.02%, and the FTSE 100 in the U.K., which fell by 0.40%.

The Fed's decision to increase its policy target interest rate on Wednesday by three-quarters of a percent was widely expected. But Fed Chair Jerome Powell also dropped guidance on the size of the next rate rise, creating the possibility that the central bank could soon pivot to a slower pace of rate hikes.

“We have the best part of two months until the September 21st FOMC meeting, a period that includes two jobs reports, two inflation reports and the Fed’s Jackson Hole symposium. A lot could happen in that time so it is unsurprising that the Fed is being somewhat vague in its forward guidance,” said analysts at ING, in a note.

Back in Europe, quarterly corporate earnings continue to pour in.

Carmaker Stellantis NV (BIT:STLA) posted record first half earnings as strong performance in all five of its regions helped outweigh an uptick in raw material costs and semiconductor shortages, giving shares a more than 3% boost.

Franco-Italian chipmaker STMicroelectronics NV (EPA:STM) reported that second quarter revenue exceeded expectations and raised its full-year outlook, benefiting from strong demand for its chips used in smartphones to cars. Shares in the company jumped after the release.

Orange SA (EPA:ORAN) said its second quarter core operating profit rose 0.5% from a year earlier, as strong growth from its African and Middle East division offset a fall in sales in its home country and Spain. Shares in France's biggest telecoms firm fell by more than 3%.

Shares in Anheuser-Busch InBev SA/NV (EBR:ABI) tumbled by more than 2% despite the world's largest brewer reporting higher than expected second quarter earnings, thanks to larger consumer volumes and higher prices.

Nestlé S.A. (SIX:NESN) raised its full-year sales growth forecast to 7-8% and just slightly lowered its margin guidance after cost inflation hurt the Swiss company less than expected and price increases boosted organic sales growth in the first half of 2022. Shares in the world's biggest food group decreased by more than 2%.

On the data front, preliminary German inflation figures will come out later today. The numbers will be studied carefully for signs that price pressures in Europe's largest economy - and the Eurozone in general - are starting to abate.

Oil prices rose Thursday, supported by lower crude inventories and a rebound in gasoline demand in the U.S., the world’s largest consumer.

By 03:34 EST, U.S. crude futures traded 1.66% higher at $98.87 a barrel, while the Brent contract rose 1.62% to $103.32.

Additionally, gold futures rose 1% to $1,737.60/oz, while EUR/USD traded 0.11% lower at 1.0191.