European stocks continue positive tone; Continental soars

European stock markets started the new week on a positive note, with sentiment helped by record highs on Wall Street as well as a rate cut from the Federal Reserve. 

At 03:10 ET (08:10 GMT), the DAX index in Germany traded 1.1% higher, the CAC 40 in France rose 0.9% and the FTSE 100 in the U.K. climbed 0.8%. Political uncertainty 

The reelection of Donald Trump as US president will dominate the thought process of markets, as investors assess the global implications of his return to power, particularly given the potential inflationary impact of some of his proposed policies.

The main US indices recorded another round of records on Friday, as the Dow Jones Industrial Average and S&P 500 wrapped up their best week in a year after Trump’s election win.

This week sees the release of the latest US consumer prices, and these are expected to reinforce the likelihood of further rate cuts by the Federal Reserve after last week’s 25 bps reduction.

However, Trump’s return to the White House could complicate this thought process.

Back in Europe, the collapse in Germany's ruling coalition has resulted in political uncertainty in Europe's biggest economy just as it skirts recession and with the potential of higher tariffs under Trump’s administration.

Chancellor Olaf Scholz's decision to fire his finance minister, from coalition partner the Free Democrats, points to a vote of no confidence in January and possible snap elections in March. Continental Q3 profit soars

Back in Europe, Continental (ETR:CONG ) stock soared over 7% after the German automotive supplier posted third-quarter core profit above expectations, even as it cut its sales guidance for the second time this year, with the German automotive supplier blaming weak demand from industry in Europe and North America. Crude prices stable 

Oil prices steadied Monday (NASDAQ:MNDY ) as traders digested the latest stimulus plan from top importer China as well as the easing of any supply disruptions from Hurricane Rafael.

By 03:10 ET, the Brent contract gained 0.2% to $74.04 per barrel, while U.S. crude futures (WTI) traded 0.1% higher at $70.44 per barrel.

Prices weakened on Friday after Beijing approved about 10 trillion yuan ($1.4 trillion) in measures aimed at lowering government debt levels. But a lack of targeted measures for private consumption largely left investors wanting more, especially as data over the weekend showed persistent Chinese deflation.

In the U.S., fears of immediate disruptions in production eased as Hurricane Rafael weakened into a tropical storm as it made landfall in Cuba.

 

Source: Investing.com