European Equities: German Retail Sales and Corporate Earnings in Focus

The Majors

It was another mixed day for the European majors on Friday.

The DAX30 slipped by 0.05% to buck the trend. Finding support, however, were the CAC40 and the EuroStoxx600, which ended the day up by 0.38% and by 0.07% respectively.

It was a busier day on the economic calendar, with 3^rd quarter GDP numbers for member states and the Eurozone and inflation in focus.

A further pickup in inflationary pressure across the Eurozone and disappointing 3^rd quarter GDP numbers from Germany weighed on the DAX30.

Better than expected 3^rd quarter GDP numbers from France supported the CAC40 and the EuroStoxx600, however.

From the U.S, personal spending and inflation figures were also market friendly on the day.

The Stats

Key stats included 3^rd quarter GDP numbers for France, Germany, Spain, and the Eurozone.

Member States

In the 3^rd quarter, the Spanish economy grew by 2.00% quarter-on-quarter versus a forecasted 2.7%. The economy had expanded by 1.1% in the previous quarter.

The French economy grew by 3.0% in the quarter versus a forecasted 2.1%. In the 2^nd quarter, the economy had expanded by 1.2%.

For Germany, the economy grew by 1.8% quarter-on-quarter, falling short of a forecasted 2.2%. In the previous quarter, the economy had grown by 1.9%.

The Eurozone

In the 3^rd quarter, the Eurozone economy grew by 2.2% quarter-on-quarter. The economy had expanded by 2.1% in the 2^nd quarter. Year-on-year, the economy expanded by 3.7%.

According to Eurostat,

Among member states, with data available for the 3^rd quarter:

• Austria (+3.3%) recorded the highest increase, quarter-on-quarter, followed by France (+3.0%) and Portugal (+2.9%).
• Latvia (+0.3%) and Lithuania (+0.0%) recorded the lowest GDPs.

While the GDP numbers were mixed, inflation figures raised yet more red flags.

According to prelim figures, the Eurozone’s annual rate of inflation accelerated from 3.4% to 4.1%. Economists had forecasted a pickup to 3.7%.

According to Eurostat,

• Energy is expected to have the highest annual rate in October of 23.5% compared with 17.6% in September.
• For services, the annual rate of inflation is expected to be 2.1%. (Sept: 1.7%).
• The annual rate of inflation for non-energy industrial goods is expected to soften to 2.0% in October (Sept: 2.1%).
• Food, alcohol, & tobacco is expected to see the annual rate of inflation stable at 2.0%.

Month-on-month, consumer prices rose by 0.8% following a 0.5% increase in September.

From the U.S

Personal spending and inflation were key stats on the day.

In September, personal spending rose by 0.6%. Spending had increased by 1.0% in August.

Inflationary pressures persisted, however. The Core PCE Price Index was up 3.6% year-on-year. In August, the Core PCE Price Index had also been up 3.6%, year-on-year.

The Market Movers

For the DAX: It was another mixed day for the auto sector on Friday. Daimler rallied by 2.39% to lead the way, with Continental rising by 0.75%. Volkswagen fell by 1.15%, however, with BMW ending the day down by 0.18%.

It was a bullish day for the banks. Deutsche Bank rose by 0.86%, with Commerzbank rallying by 2.30%.

From the CAC, it was a relatively bearish day for the banks. Soc Gen rallied by 1.76%, Credit Agricole and BNP Paribas rose by 0.68% and by 0.77% respectively.

It was a mixed day for the French auto sector, however. Stellantis NV fell by 0.21%, while Renault rose by 0.45%.

Air France-KLM rallied by 3.12%, while Airbus SE ended the day down by 1.25%.

On the VIX Index

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

Following a 2.65% decline on Thursday, the VIX fell by 1.63% to end the day at 16.26.

The NASDAQ rose by 0.33%, with the Dow and the S&P500 gaining 0.25% and 0.19% respectively.