European Stock Markets Decline Ahead of Inflation Data Release

European stock markets experienced declines on Thursday as investors assessed a wave of corporate earnings reports in anticipation of the upcoming eurozone inflation data.

As of 04:05 ET (08:05 GMT), major indices reflected this trend: Germany’s DAX was down 0.8%, France’s CAC 40 fell by 0.5%, and the U.K.’s FTSE 100 dropped 0.6%.

Eurozone Inflation in Focus

A key focus for investors is the eurozone’s consumer price index (CPI), scheduled for release later in the day. This data is crucial for shaping the European Central Bank’s (ECB) approach to future interest rate cuts. The CPI for October is expected to show a slight annual increase to 1.9%, up from 1.7% in the previous month, although it remains below the ECB’s target of 2.0%.

ECB President Christine Lagarde stated in an interview that the inflation rate is expected to reach the 2% target sustainably by 2025. She acknowledged that while the ECB could have acted earlier, their aggressive rate hikes have successfully brought inflation down significantly. Lagarde emphasized the need for lasting achievement of the 2% target, projecting this to occur in 2025, barring any major economic shocks. This year, the ECB has already cut interest rates three times, marking the first consecutive cuts since the euro crisis of 2011.

Corporate Earnings Highlights

In the corporate sector, several notable earnings reports caught investors’ attention:

• Shell (LON:SHEL): Shares rose 1.5% after the oil and gas giant reported a third-quarter profit of $6 billion, surpassing forecasts, and announced an additional $3.5 billion in share buybacks.
• BNP Paribas (OTC:BNPQY): The stock fell over 6% as the largest eurozone lender struggled to meet quarterly profit expectations without increased trading activity in its investment banking division amid ongoing lending challenges.
• Stellantis (NYSE:STLA): The automotive company saw a 1% increase in its stock price, reporting efforts to rapidly reduce U.S. inventories despite a 27% decline in quarterly revenues.
• AB InBev (EBR:ABI): Shares dropped over 3% after the brewing company reported a decrease in third-quarter volumes, particularly in the Asia Pacific region, although a share buyback and improved guidance offered some support.

Meanwhile, across the Atlantic, both Meta Platforms (NASDAQ:META) and Microsoft (NASDAQ:MSFT) exceeded profit and revenue expectations for the July-September quarter. However, both tech giants highlighted significant increases in spending to expand their AI data centers to meet surging demand.