By Peter Nurse
Investing.com - European stock markets are seen opening in a mixed fashion Thursday, with investors focusing on corporate earnings ahead of key U.S. economic data.
At 2:10 AM ET (0710 GMT), the DAX futures contract in Germany traded 0.3% lower, CAC 40 futures in France dropped 0.1%, and the FTSE 100 futures contract in the U.K. rose 0.1%.
European markets have rallied strongly of late, helped by the belief that the rollout of Covid-19 vaccines will lead to a sharp increase in economic growth.
Also helping the tone has been the strong earnings season to date, suggesting that the corporate sector has weathered the latest shutdowns far better than the first round.
At the end of last week, Morgan Stanley (NYSE:MS) calculated that 60% of the European companies have beaten EPS estimates, while 18% have missed so far.
“This is a very strong outcome, and puts 4Q20 on track to deliver the broadest beat on data back to 2007,” the U.S. investment bank said, in a research note. “Banks have been a key source of net beats, with 80% of the sector beating so far.”
This continued Thursday, as although Credit Suisse (SIX:CSGN) recorded a 353 million Swiss franc ($392.79 million) net loss for the fourth quarter, weighed down by provisions for a legal dispute over property debt in the United States, this was still ahead of expectations.
Barclays (LON:BARC) also beat expectations, announcing a share buyback of up to 700 million pounds.
Elsewhere, Air France-KLM announced a 7.1 billion euro ($8.5 billion) net loss for 2020. Airbus also posted a full-year loss for 2020, resulting in the European planemaker withholding a dividend, but it also restored its business targets after generating cash in the fourth quarter.
In a busy day for corporate earnings, investors will also be watching out for results from the likes of Daimler (OTC:DDAIF), Orange, Carrefour (PA:CARR), Bouygues (PA:BOUY), Valeo (PA:VLOF) and Nestle.
The economic data slate is largely empty as far as Europe is concerned, but not so in the U.S. Weekly initial jobless claims are expected to be around 765,000, which would be down from the 793,000 reported the previous week, while housing starts for January are forecast to be 1.66 million, slightly lower than the previous month.
Oil prices extended recent gains Thursday, as the arctic blast hitting Texas and other oil-producing states continued to hamper production.
Additionally, U.S. crude oil stocks fell by 5.8 million barrels last week, according to data from the American Petroleum Institute, when a draw of just over 2 million barrels had been expected.
U.S. Energy Information Administration oil inventory data is scheduled for release later on Thursday, delayed by a day after Monday’s holiday.
U.S. crude futures traded 0.7% higher at $61.59 a barrel, while the international benchmark Brent contract rose 0.9% to $64.90, both contracts climbing to their highest levels since January 2020.
Elsewhere, gold futures rose 0.5% to $1,780.75/oz, while EUR/USD traded 0.1% higher at 1.2040.