European markets rise on an energy boost, but they will lose money every week

European shares experienced a rise on Friday, driven by a rally in energy stocks. However, the market is on track for its worst week in nearly two months due to heightened investor anxiety surrounding the closely contested U.S. presidential election.

The pan-European STOXX 600 index climbed 0.5% to 508.05, recovering slightly after a more than 1% drop in the previous session. Despite this uptick, the index is poised for a decline of around 2% for the week, marking its second consecutive weekly decrease.

As the Nov. 5 U.S. presidential election approaches, the race remains extremely close, with opinion polls indicating a near tie between candidates. Investors are increasingly speculating on the possibility of Republican candidate Donald Trump returning to the presidency, though he is in a tight race with Vice President Kamala Harris according to several polls. This uncertainty has led investors to seek safe-haven assets, causing both the U.S. dollar and gold prices, which hit a record high this week, to rise.

In the current session, the energy sector provided the most significant boost to the index, gaining 1.4% as oil prices soared on reports of Iran preparing for a retaliatory strike against Israel from Iraq in the coming days.

Reckitt saw a notable increase of 10% after being cleared of liability in the latest preterm formula lawsuit. Conversely, the travel sector dipped 0.5%, influenced by a 2.6% decline in Lufthansa shares following HSBC's downgrade of the stock from "buy" to "hold."

For the week, the banking sector performed the best, buoyed by positive results from French bank Société Générale. Meanwhile, the food and beverages sector struggled the most, impacted by disappointing results from spirits maker Campari.

Earnings reports from major Wall Street companies, including Meta and Microsoft, suggest that Big Tech is ramping up its investments in AI. However, the lack of quick and significant returns has raised concerns among investors. Additionally, Apple reported earnings that missed fourth-quarter sales estimates in China.

On the macroeconomic front, data revealed that the Swiss consumer price index rose by 0.6% in October, with the benchmark index increasing by 0.7%. With a relatively light data day in Europe, investors are now looking ahead to the U.S. non-farm payrolls data set to be released later today.

Max McKechnie, Global Market Strategist at J.P. Morgan Asset Management, noted, "A 25 basis point cut from the Federal Reserve next week is virtually certain, and today's labor market data is unlikely to change this outlook."

 

 

 

 

 

 

 

 

 

Paraphrasing text from "Reuters" all rights reserved by the original author.