European stock markets are expected to open with minor losses Wednesday, weighed by disappointing earnings overnight from U.S. tech giants Alphabet and Microsoft, while investors digest more quarterly earnings from the European banking sector, and from Deutsche Bank in particular.
At 02:00 ET (06:00 GMT), the DAX futures contract in Germany traded 0.2% lower, CAC 40 futures in France dropped 0.4%, and the FTSE 100 futures contract in the U.K. fell 0.4%.
European equity markets are set to suffer a negative read across from a fall in U.S. futures overnight after a disappointing start to Big Tech earnings week.
Alphabet stock fell over 6% after hours after the owner of Google, which is the world’s largest digital advertising platform by market share, reported disappointing ad sales as advertisers cut back on their spending in the face of an economic slowdown.
Microsoft stock also fell over 6% after hours after the software giant disappointed with its forecast for revenue growth in its closely watched Azure cloud-computing business.
Back in Europe, it’s the banking sector which will be in the spotlight, with generally positive news.
Deutsche Bank is set to shine Wednesday after the German banking giant posted a substantial jump in third-quarter profit as investment banking revenues rose despite a slump in deal-making.
Spanish lender Santander reported that its net profit in the third quarter rose 11% on an annual basis as higher revenues across its markets offset a rise in loan loss provisions and costs.
UniCredit raised its 2022 profit goal, with the second-largest Italian bank boosted by higher interest rates and lower loan loss provisions which also drove earnings above expectations in the third quarter.
Standard Chartered reported a 40% increase in quarterly profit as higher interest rates boosted the emerging markets-focused bank’s income, allowing it to upgrade its revenue outlook.
Elsewhere, Mercedes Benz raised its outlook for its cars division as third-quarter earnings rose strongly, while French catering and food services group Sodexo reported better-than-expected full-year revenue, saying it expects 2023 revenue and profit margins to hit 2019 levels.
The economic data calendar is quiet in Europe Wednesday, with French consumer confidence figures for October the highlight.
Oil prices dipped Wednesday after industry data indicated that U.S. crude stocks grew more than expected last week, reinforcing fears that a slowdown in the world’s largest economy will hit demand.
Data from the American Petroleum Institute showed that U.S. crude inventories grew by 4.5 million barrels in the week to Oct. 21, more than expectations for a build of 200,000 barrels.
Traders will look towards the release of an official report from the Energy Information Administration later in the session for confirmation.
By 02:00 ET, U.S. crude futures traded 0.8% lower at $84.67 a barrel, while the Brent contract fell 0.9% to $90.89.
Additionally, gold futures rose 0.3% to $1,662.65/oz, while EUR/USD traded 0.1% lower at 0.9962.