European Stock Futures Slip; Credit Suisse Posts Huge Loss Ahead of ECB Meeting

By Peter Nurse 

Investing.com - European stock markets are expected to open lower Thursday, with investors focused on a hefty quarterly loss by Credit Suisse ahead of a key policy-setting meeting by the European Central Bank.

At 02:00 ET (06:00 GMT), the DAX futures contract in Germany traded 0.2% lower, CAC 40 futures in France dropped 0.1% and the FTSE 100 futures contract in the U.K. fell 0.2%.

This week has seen the release of quarterly earnings from Europe’s banks, with mixed results, and it’s the turn of Credit Suisse (SIX:CSGN) to be in the spotlight Thursday.

Switzerland's second-biggest bank posted a loss of 4 billion Swiss francs ($4.06 billion) in the third quarter, significantly worse than expected, after booking a 3.7 billion franc impairment related to its strategy review.

It also announced plans to raise 4 billion Swiss francs of fresh capital through the issuance of new shares to qualified investors and through a rights offering.

Additionally, it pledged to “radically restructure” its investment bank to significantly cut its exposure to risk-weighted assets, following a series of costly compliance and risk management failures, most notably the Archegos hedge fund scandal.

Elsewhere, Franco-Italian chipmaker STMicroelectronics (EPA:STM) reported third-quarter sales and gross margin that beat market expectations, while Lufthansa (ETR:LHAG) said it expected air travel demand to remain strong, with high average yields.

Earnings are also expected from oil major Shell (LON:RDSa) as well as the consumer goods giant Unilever (NYSE:UL), while the tech sector could be affected by the sharp drop in Meta Platforms stock after hours following the Facebook (NASDAQ:META) parent forecasting a weak holiday quarter and significantly more costs next year.

Away from corporate news, the ECB is widely expected to deliver its second 75 basis-point rate hike later in the session, as it tries to curb Eurozone inflation running at nearly 10% versus its 2% target.

Investors will be looking for guidance over the size of subsequent moves, especially following Wednesday’s smaller 50 basis points hike at the Bank of Canada and talk that the Federal Reserve may soon look to ease back the pace of its monetary tightening.

The German GfK consumer sentiment index fell to 41.9 in November, from 42.8 the previous month, as the country struggles with soaring energy costs and slowing growth.  

Oil prices edged higher Thursday, continuing the previous session’s strong gains after record-high U.S. crude exports pointed to healthy global oil demand.

A report from the Energy Information Administration, released Wednesday, detailed a bigger-than-expected rise in U.S. crude inventories, but the market looked through this given a large percentage of the increase came from a drawdown of strategic reserves.

Instead, the focus was on U.S. crude exports surging to a record-high 5.1 million barrels a day, suggesting resilience in global demand despite rising inflation and interest rates.

By 02:00 ET, U.S. crude futures traded 0.1% higher at $87.98 a barrel, while the Brent contract rose 0.1% to $93.84. The contracts posted gains of around 3% in the previous session. 

Additionally, gold futures rose 0.1% to $1,669.80/oz, while EUR/USD traded just lower at 1.0076.