European stocks slightly higher; earnings help CAC 40 to all-time high

Investing.com - European stocks edged higher Monday, with the French benchmark index reaching a new all-time high, retaining the positive tone seen at the start of the week as investors digested easing global tensions and a plethora of quarterly corporate earnings.

The DAX index in Germany closed 0.4% higher, the CAC 40 in France climbed 0.6%, reaching a new all-time high, and the FTSE 100 in the U.K. rose 0.2%. 

Easing China-U.S. tensions 

Global sentiment has been boosted of late by optimism that tensions between the U.S. and China will ease.

This has been helped by Monday’s comments from U.S. President Donald Trump that indicated that he expects to reach a fair trade deal with Chinese President Xi Jinping at a meeting between the two on the sidelines of an economic conference in South Korea next week.

Trade tensions between the world’s two biggest economies have weighed on global confidence, with disputes over tariffs, technology and market access remaining largely unresolved.

Ukraine-Russia peace talks 

Also helping sentiment was the news that leaders of European nations, including Britain, France and Germany, issued a joint statement setting out support for Ukraine and U.S. President Donald Trump’s efforts to end the fighting there.

"We strongly support President Trump’s position that the fighting should stop immediately, and that the current line of contact should be the starting point of negotiations," the statement, published by the British government said.

"We must ramp up the pressure on Russia’s economy and its defence industry, until Putin is ready to make peace. We are developing measures to use the full value of Russia’s immobilised sovereign assets so that Ukraine has the resources it needs."

Signs of unity between the Western governments have prompted markets to gain confidence that they can push Russian president Vladimir Putin to the negotiating table.

Quarterly earnings season continues

Back in Europe, the economic calendar is largely empty, but European Central Bank chief Christine Lagarde is scheduled to speak later in the day, one of the last opportunities to shape policy before a blackout period begins on Thursday ahead of next week’s policy meeting.   

That said, investors are concentrating mostly on the quarterly earnings season.

The European earnings season has started with a mixed tone, according to Morgan Stanley, which said early results show “a +14% net skew to beats in overall financial results vs consensus so far,” below the 25% recorded in the previous quarter.

With around 21% of the market having reported, the bank points out that the better-than-expected results followed a wave of downgrades before the season began.

Assa Abloy (ST:ASSAb), the world’s largest lockmaker, reported a slightly bigger third-quarter operating profit than expected, even as the residential market in North America remained sluggish.

Husqvarna (ST:HUSQa), a Swedish manufacturer of outdoor power products, reported weaker-than-expected third-quarter results as uneven demand and soft North American sales weighed.

Unilever (LON:ULVR) said it will adjust the timeline for the planned demerger of The Magnum Ice Cream Company due to the U.S. federal government shutdown, with further updates on the revised schedule to be provided as soon as possible.

L’Oreal (EPA:OREP) is due to release its latest earnings later in the session, and the French luxury house’s results will be studied carefully the day after announcing the purchase of Kering ’s (EPA:PRTP) beauty division for €4 billion.

There are also some important U.S. companies due to report on Tuesday, with numbers from Netflix (NASDAQ:NFLX) and Coca-Cola (NYSE:KO) standing out.

Crude bounces

Oil prices climbed higher Tuesday, but remained close to five-month lows as concerns over a looming supply glut and weakening demand sapped confidence. 

Brent futures climbed 0.6% to $61.35 a barrel, and U.S. West Texas Intermediate crude futures rose 0.6% to $57.36 a barrel.

Prices declined to their lowest since early May in Monday’s session on the concerns the U.S.-China trade dispute will hit economic growth as well the International Energy Agency’s outlook for a growing supply glut in 2026.