European Stock Markets Dip Amid Political Turmoil and Earnings Reports

European stock markets edged lower on Friday as investors processed a volatile week marked by political upheaval, central bank decisions, and corporate earnings.

At 03:15 ET (08:15 GMT):
– The DAX in Germany slipped by 0.1%.
– The CAC 40 in France dropped by 0.2%.
– The FTSE 100 in the UK fell by 0.1%.

For the week:
– The DAX gained approximately 0.6%.
– The CAC 40 rose by 0.2%.
– The FTSE 100 declined by 0.5%.

Political Turmoil in Germany

Germany experienced increased political instability this week, as the likelihood of a snap election became more probable.

Chancellor Olaf Scholz's outreach to opposition leader Friedrich Merz was met with resistance, leading Merz to call for a vote of no confidence. This situation marks a significant escalation in Germany's political crisis. While this uncertainty could lead to economic difficulties, it might also present an opportunity for a more cohesive government and increased stimulus for the struggling economy.

Investors are also monitoring news from China's National People's Congress Standing Committee for potential insights into Beijing’s economic policies and stimulus measures impacting global markets.

IAG and Richemont Report Earnings

IAG (LON:ICAG) shares surged over 6% after reporting a strong third-quarter performance with a 15.4% increase in operating profit and a 7.9% rise in revenue, along with a €350 million share buyback announcement.

Meanwhile, Richemont (SIX:CFR) stocks rose by 2%, reporting flat overall sales that were offset by growth in regions outside of China.

Oil Markets Prepare for Weekly Gains

Crude prices fell on Friday but were on track for significant weekly gains due to top producers delaying production increases and potential supply disruptions.

By 03:15 ET, U.S. crude futures (WTI) dropped by 1.2% to $71.48 a barrel, while Brent contracts fell by 1% to $74.85 a barrel. For the week, both contracts were projected to gain approximately 3%.

The market was buoyed by OPEC+ announcing a delay in production increases from December, alongside expected actions by the incoming U.S. administration, including tighter sanctions on Iran and Venezuela.