European Stock Markets Climb Strongly

Investing.com – European stock markets climbed strongly at the start of the new week, with sentiment helped by record highs on Wall Street as well as a rate cut from the Federal Reserve.

At 09:50 ET (14:50 GMT), the DAX index in Germany traded 1.6% higher, the CAC 40 in France rose 1.3% and the FTSE 100 in the U.K. climbed 1%.

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.

German legislators scrapped a crucial budget planning meeting earlier in the session as parties continued to wrangle over the timing of an election to end a period of political uncertainty after Chancellor Olaf Scholz's coalition broke up last week.

Investors will also scrutinize a fresh batch of economic data in Europe this week, including inflation readings in Germany and UK employment and gross domestic product.

Continental Soars After Q3 Data

Back in Europe, Continental (ETR:CONG) stock soared over 10% 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, blaming weak demand from the industry in Europe and North America.

Hannover Re (OTC:HVRRY) stock climbed 3% after the German insurer reported a 30% jump in net income for the first three quarters of 2024, with a full-year profit target now raised to €2.3 billion.

Burberry (LON:BRBY) stock rose 4% amid growing speculation that the British fashion giant could soon be taken over by Italian luxury brand Moncler.

Crude Retreats as China Disappoints

Oil prices slipped 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 09:50 ET, the Brent contract dropped 2.3% to $72.16 per barrel, while U.S. crude futures (WTI) traded 2.5% lower at $68.62 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.