By Barbara Kollmeyer
Well-received results from banks and automobile makers were helping to drive gains for European stocks on Friday, while an uptick in German manufacturing also encouraged some investors in the region, which has been dogged by a second wave of the virus.
The Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP -0.78% rose 1%, sidestepping a potential fifth straight loss, which would be the worst losing run for the index since early March, according to FactSet. The German DAX /zigman2/quotes/210597999/delayed DX:DAX -0.97% gained 1.3%, the French CAC /zigman2/quotes/210597958/delayed FR:PX1 -0.82% rose 1.7%, and the FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX -0.31% rose 1.6%.
U.S. stocks /zigman2/quotes/210598065/realtime DJIA +1.85% /zigman2/quotes/210599714/realtime SPX +1.95% /zigman2/quotes/210598365/realtime COMP +1.55% traded mixed after the second and final presidential debate late on Thursday. President Donald Trump and former Vice President Joe Biden exchanged barbs over the pandemic, as the clock ticks down to the November election.
Front and center for markets, though, is the progress of stimulus talks in the U.S., which is “arguably the only hope for an immediate lift to U.S. stocks before 3 November,” said Han Tan, market analyst at FXTM, in a note to clients.
“Investors are likely to stay neutral in the markets, gripped by the looming political risks with the U.S. elections less than two weeks away,” the analyst said. House Speaker Nancy Pelosi noted progress in the talks with the White House, but cautioned that a bill may still take longer to write and get passed by Congress.
One positive for markets may be the late Thursday news that Gilead Sciences’ /zigman2/quotes/210293917/composite GILD +2.20% GILD treatment for COVID-19, Veklury, was formally approved by the Food and Drug Administration . Known as remdesivir up until now, Veklury is the first COVID-19 therapy to receive full FDA approval during the pandemic.
Meanwhile, economic data revealed a continued struggle against the pandemic fall out in Europe. The flash eurozone composite purchasing managers index fell to 49.4 in October from 50.4 in September, falling just below the 50 mark that indicates deteriorating conditions.
However, a surprise jump in the German manufacturing PMI to 58.0 from 56.4, which beat estimates of 55, helped to power the eurozone manufacturing PMI to 54.4 from 53.7, noted Fawad Razaqzada, market analyst with ThinkMarkets, in a note to clients.
Several European countries have imposed restrictions and curfews on their populations to curb the virus’ spread. French officials on Thursday expanded a 9 p.m. to 6 a.m. local curfew across 38 regions. French Economy Minister Bruno Le Maire warned on Friday that the economy would contract in the fourth quarter, in an interview with Europe 1 radio.
U.K. data were slightly more positive, with retail sales rising in September and beating expectations .
Earnings news was driving share action as well. Shares of Barclays /zigman2/quotes/206581728/composite BCS +3.69% /zigman2/quotes/208409333/delayed UK:BARC +2.95% climbed 8% after the U.K. bank reported higher third-quarter total income, net profit and pretax profit than the market expected, despite booking hefty provisions.
Those results inspired gains across the board, with shares of HSBC Holdings /zigman2/quotes/208272822/composite HSBC +3.20% /zigman2/quotes/203901799/delayed UK:HSBA +2.60% up 5% and Banco Santander /zigman2/quotes/202859081/composite SAN +4.25% /zigman2/quotes/205677933/delayed ES:SAN +1.29% up 2.8%.
Auto makers were in focus, with Renault shares up 1% and Daimler up 2% after each reported results. Renault /zigman2/quotes/200919924/delayed FR:RNO -1.60% said revenue fell in the third quarter, but the French auto maker still beat analysts’ forecasts . German car maker Daimler /zigman2/quotes/201850364/delayed XE:DAI -0.51% reported a rise in profit, but a fall in revenue .
On the downside, shares of Kering /zigman2/quotes/204653408/delayed FR:KER -1.39% fell 2.8% after the luxury-goods group reported better-than-expected third-quarter group sales, but disappointment from the Gucci label, said analysts at Citigroup.
“With the shares having outperformed in the past three months (+13% vs. sector +7% and European market -6%) and the likely disappointment on Gucci, share price reaction might be mixed,” said a team of analysts led by Thomas Chauvet, in a note to clients.