European Stocks Set to Advance for Second Week Ahead of US Data

European stocks are on track to experience a second consecutive week of gains as investors look ahead to US manufacturing data, which will offer insights into the health of the US economy.

The Stoxx 600 Index showed little fluctuation at 8:15 a.m. in London, reflecting an overall increase of about 0.6% this week.

Market Performance

In the current trading environment, automakers are facing challenges. Some electric vehicle models that used to qualify for US tax credits were excluded from the updated list due to stricter regulations. However, the financial and energy sectors are performing well, highlighting a divergence within the broader market.

Individual Stock Movements

Among notable movements, Airbus SE saw a decline in its stock after it narrowly missed its annual delivery target for 2024, managing to deliver around 760 aircraft to customers. Conversely, GSK Plc experienced a rise in its shares following the approval from China’s National Medical Products Administration for its drug Nucala (mepolizumab) as a supplemental treatment for chronic rhinosinusitis in adult patients.

Despite the recent gains, European stocks have struggled to maintain momentum since the middle of 2024, facing pressure from weak regional economies and ongoing political uncertainties. Investors are particularly focused on the clarity regarding US trade policies in light of the imminent swearing-in of President-elect Donald Trump.

As we look into the future, cyclical stocks in the European market may continue to encounter difficulties, chiefly due to falling consumer confidence.

According to strategist Joachim Klement from Panmure Liberum, "We believe that tourism and the broader consumer services sector represent the key opportunities in an economy that is otherwise hindered by weak manufacturing activity and limited export demand." Klement emphasized a shift in focus toward service-oriented companies as we move into 2025, rather than remaining concentrated on industrial or consumer goods.

Stocks, Economy, Investors