European Stock Markets Show Mixed Performance
European stock markets experienced a generally positive trend on Friday, with most indices closing just above the flatline. The pan-European Stoxx 600 index ended the session in the green, though the performance varied across sectors and regional bourses.
Investors are closely watching the upcoming Federal Reserve policy decision, which is expected to be a key focus for market participants. In recent weeks, expectations of a quarter-percentage point interest rate cut have increased significantly. According to the CME’s FedWatch tool, there is now an 87.1% probability that the central bank will reduce its key interest rate.
U.S. Inflation Data and Consumer Sentiment
On the economic front, the latest data from the Commerce Department revealed that core U.S. inflation for September came in at 2.8%, slightly below the forecasted level. This figure was measured using the personal consumption expenditures (PCE) price index, which is the Federal Reserve’s preferred metric for tracking inflation.
Simultaneously, the University of Michigan’s consumer sentiment survey showed a slight improvement in December compared to expectations. Additionally, inflation expectations reached their lowest levels since January, indicating a potential shift in market dynamics.
Labor Market Developments
The Federal Reserve is also monitoring the labor market, which has shown signs of softening. However, recent data released on Thursday indicated that U.S. jobless claims for the week ending November 29 decreased by 27,000 from the previous week and were lower than estimates.
Upcoming Central Bank Decisions
Following the focus on the U.S. Federal Reserve, attention will shift to Europe next week. Several central banks, including the Bank of England, the European Central Bank, Sweden’s Riksbank, and Norway’s Norges Bank, are scheduled to announce their interest rate decisions on December 18.
Geopolitical Developments
Investors in Europe continue to monitor developments related to U.S.-led negotiations aimed at ending the conflict in Ukraine. Russian President Vladimir Putin recently held talks with a U.S. delegation in Moscow and is currently on a state visit to India. Reports suggest that European Union officials are considering using frozen Russian assets to provide further support to Kyiv. This move has been criticized by Dmitry Medvedev, deputy chairman of Russia’s Security Council, who described it as an act justifying war.
In an interview with India Today, Putin warned that Russia may seize Ukraine’s eastern Donbas region by force if Ukrainian troops do not withdraw.
Corporate News and Market Movements
Swiss Re, a global reinsurer, saw its shares fall by 6.5% by the end of the session. Earlier in the day, the company had occupied the bottom of the Stoxx 600 after announcing its 2026 financial targets. The company aims for a net profit of $4.5 billion, slightly higher than the minimum $4.4 billion targeted for 2025. It also plans for annual dividend per share growth of 7% or more over the next two years.
On the other hand, Greggs, a struggling British fast food and bakery chain, saw its shares rise by 5.2% following an optimistic note from JPMorgan.
U.K. Online Grocery Firm
Ocado, a U.K. online grocery firm, added as much as 5% after reports indicated that its U.S. partner Kroger agreed to pay $350 million in compensation following the cancellation of an Ocado distribution center in America. However, the stock closed only 0.3% higher.
Eurozone GDP Growth
Eurostat data revealed that the eurozone economy grew by 0.3% in the third quarter, surpassing the initial estimate of 0.2% released in October. This follows a 0.1% expansion in the second quarter and a 0.6% growth in the first quarter of the year.
The euro was trading lower against the U.S. dollar at $1.133.
U.S. Stock Market Performance
U.S. stocks also rose on Friday, driven by anticipation of the Federal Reserve’s upcoming decision and positive economic data releases.