European Stocks Edge Higher as ECB Rate Cut Boosts Sentiment

European stock markets rose slightly on Friday, supported by the European Central Bank’s (ECB) interest rate cut, while investors assessed corporate earnings and inflation data across the region.

• Germany’s DAX gained 0.1%.
• France’s CAC 40 rose 0.2%.
• UK’s FTSE 100 climbed 0.2%.

Key Market Drivers

1. ECB Rate Cut Fuels Optimism

• The ECB cut interest rates on Thursday, its fifth reduction since June, signaling potential further easing to support economic growth.
• Market expectations indicate up to three more rate cuts this year.
• Germany’s economic struggles persisted, as retail sales dropped 1.6% in December, underscoring weak consumer demand.
• Preliminary German inflation data is due, following France’s CPI, which remained below the ECB’s 2% target.

2. U.S. PCE Inflation Data in Focus

• Investors are awaiting December’s core PCE price index—the Federal Reserve’s preferred inflation gauge—for clues on U.S. monetary policy.
• A higher-than-expected reading could delay Fed rate cuts, affecting global risk appetite.

Corporate Earnings Highlights

1. Novartis (SIX:NOVN) Gains on Strong Drug Sales

• The Swiss pharmaceutical giant posted solid Q4 results, driven by robust demand for:
  • Heart failure drug Entresto
  • Multiple sclerosis treatment Kesimpta

2. Salvatore Ferragamo (BIT:SFER) Disappoints

• The Italian luxury brand met Q4 sales expectations, but investors hoped for stronger performance, especially after rival LVMH posted strong results.

3. SKF (ST:SKFb) Cautious on 2025 Outlook

• The Swedish manufacturing firm forecasted a slight decline in organic sales for Q1 2025.
• SKF declined to provide full-year guidance, citing market uncertainty.

4. Apple (NASDAQ:AAPL) Beats Earnings Estimates

• Q1 results topped expectations, thanks to strong services revenue.
• However, iPhone sales weakened, as competition from Chinese smartphone makers intensified.