European Equities: A Quiet Economic Calendar Leaves Earnings and FED Chair Powell in Focus

The Majors

It was another bullish day for the European majors on Friday, with new record highs coming off the back of an extended winning streak.

The CAC40 rose by 0.76% to lead the way, with the DAX30 and the EuroStoxx600 ending the day up by 0.15% and by 0.02% respectively. For the EuroStoxx600, it was yet another new record close, coming off the back of a 7-day winning streak.

Disappointing economic data from Germany pegged back the DAX30 on the day, while corporate earnings continued to provide momentum.

Travel stocks also got a boost off the back news of Pfizer Inc.’s COVID-19 pill effectiveness.

The Stats

It was a quiet Eurozone economic calendar, with German industrial production and Eurozone retail sales in focus.

German Industrial Production

In September, industrial production in Germany fell by 1.1% versus a forecasted 1.0% increase. Production had fallen by 3.5% in August.

According to Destatis,

• Production in industry excl. energy and construction was down 1.5%.
• Within industry, the production of capital goods fell by 2.8% and of intermediate goods by 1.1%.
• Motor vehicle, trailer, & semi-trailer manufacturing increased by 2.1%, partially reversing an 18.9% tumble from August.
• Consumer goods production saw a modest 0.2% rise.
• Outside industry, energy production was up 1.0%, with production in construction rising by 1.1%.

Eurozone Retail Sales

In September, retail sales slipped by 0.3% versus a forecasted 0.3% increase. Retail sales had risen by 1.0% in August.

According to Eurostat,

• Non-food product sales fell by 1.5%, while food, drinks, & tobacco sales rose by 0.7%.
• Automotive fuel sales increased by 1.1%.
• By member state, Estonia (+7.1%), Slovakia (+2.9%), and Luxembourg (+2.3%) recorded the largest increases in sales.
• Germany (-2.5%), however, recorded the largest decline in the month of September.
• Compared with September 2020, retail sales increased by 2.5%.

From the U.S

Nonfarm payrolls were in focus in the wake of the FED’s policy decision and forward guidance late on Wednesday.

In October, nonfarm payrolls jumped by 531k following a 312k increase in September. As a result, the unemployment rate fell from 4.8% to 4.6%.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Friday. Volkswagen rallied by 2.75% to lead the way, with, BMW up 1.68%. Continental and Daimler saw more modest gains of 0.55% and 0.70% respectively.

It was also a bullish day for the banks. Deutsche Bank rose by 1.00%, with Commerzbank rallying by 2.61%.

From the CAC, it was a bullish day for the banks. BNP Paribas and Soc Gen rose by 0.73% and by 0.94% respectively, with Credit Agricole up by 1.01%.

It was also a bullish day for the French auto sector. Stellantis NV and Renault ended the day with gains of 0.44% and 1.80% respectively.

Air France-KLM rallied by a further 4.60%, with Airbus SE up by 4.50%.

On the VIX Index

It was a 2^nd consecutive day in the green for the  VIX on Friday.

Following a 2.25% gain on Thursday, the VIX rose by 6.74% to end the day at 16.48.

The Dow rose by 0.56%, with the NASDAQ and the S&P500 ending the day up by 0.20% and by 0.37% respectively.