By Steve Goldstein
European stocks rose Thursday for a fourth consecutive session, led higher by drug companies.
Up nearly 3% over the last three sessions, the Stoxx Europe 600 /zigman2/quotes/210599654/delayed XX:SXXP +0.88% edged up 0.2%, helped by gains for Swiss drug manufacturer Novartis /zigman2/quotes/203286410/delayed CH:NOVN -0.38% and a recovery for GlaxoSmithKline /zigman2/quotes/200381158/delayed UK:GSK -1.12% after the U.K. drug manufacturer’s outlook on Wednesday disappointed investors.
U.S. stock futures /zigman2/quotes/209948968/delayed ES00 +0.74% edged up after a quiet Wednesday.
Jeff Germain, who oversees European and international value funds at Brandes Investment Partners, said the strategy’s underperformance versus growth over the decade could change based on the fiscal stimulus enacted around the world. “What brings that in to a more reasonable delta between the two camps — one is potentially higher interest rates, and the COVID response definitely could be inflationary given how much stimulus has been injected.”
He said his portfolio was “eclectic” but underweight technology, where he doesn’t see many opportunities, and utilities, where he says investors are assigning higher valuations on green energy investments where the future is still murky. Germain also said he is starting to find more opportunities in Germany, where a few years ago he had no investments, and highlighted France as a country with a number of the fund’s holdings.
Investors sifted through several earnings reports. Household-products maker Unilever /zigman2/quotes/205449809/delayed UK:ULVR -1.81% fell 4%, as its profit unexpectedly declined last year. While its fourth-quarter underlying sales growth of 3.5% met expectations, a worse mix, commodity headwinds and advertising spending dragged down its margin, according to Cedric Besnard, a Citigroup analyst.
Royal Dutch Shell rose 1%, after reporting a lower-than-forecast 87% drop in fourth-quarter adjusted earnings, as oil prices fell, production declined 14% and refining margins dropped.
Deutsche Bank /zigman2/quotes/207242873/delayed XE:DBK +3.43% shares slipped 2%, as the German bank reported a surprise profit on lower-than-forecast revenue.
Nokia /zigman2/quotes/203672305/delayed FI:NOKIA +0.73% /zigman2/quotes/207421390/composite NOK +1.84% shares were steady, as the telecom-equipment maker beat fourth-quarter profit and sales expectations but issued a cautious outlook for 2021.
Bayer /zigman2/quotes/206842998/delayed XE:BAYN +0.73% rose 5%, as the chemicals giant reached a tentative $2 billion settlement with class-action lawyers on its allegedly cancer-causing Roundup weedkiller. A judge rejected a previous settlement offer.