EMEA Morning Briefing : Investor Focus Remain on Earnings

MARKET WRAPS

Watch For:

France consumer spending, CPI; Germany unemployment, CPI; trading updates for IAG, BASF, Holcim, Pearson, Flutter Entertainment, Cellnex Telecom,

Opening Call:

European stock futures were mixed after Asia stocks also traded mixed. U.S. Treasurys edged lower, the dollar weakened. Gold rose and oil rose.

Equities:

European stock futures were mixed as investors continued to digest earnings.

Technology stocks have borne the brunt of investors' skepticism, as concerns mount about stretched valuations and AI's impact on corporate earnings. The S&P 500's information-technology sector is on track for its fourth straight monthly decline, its longest losing streak since 2018, according to Dow Jones Market Data.

"With higher valuations, obviously there's a lot more pressure on current earnings," said Chris Zaccarelli, chief investment officer for Northlight Asset Management. He attributed the dynamic to investors' looking past results and toward how AI disruption could squeeze earnings in the years ahead.

Forex:

The U.S. dollar weakened. A U.S. tech-led risk-off mood has returned and Treasurys have regained their hedging appeal, said two FX strategists at OCBC.

"With inflation concerns easing, Treasuries are regaining traction as a viable hedge during risk--off episodes, reinforcing the USD's safe--haven appeal," they added.

Bonds:

U.S. Treasury yields edged lower. While economic data have been mixed, most U.S. companies have avoided widespread layoffs - keeping a "low-hire, low-fire" labor market in place. So long as workers have jobs, lower mortgage rates could help improve affordability issues.

Yet fears of layoffs might still act as a counterbalance.

Within the bond market, "there's been an ongoing bid related to job displacements from AI, and we've seen a drop in yields over the past couple of weeks because of that," LPL Financial's Gillum said in a phone interview.

Bond-market moves overnight "seem like a continuation of that trade," he noted. The strategist added that traders seemed to be more focused on AI's disinflationary impacts than on the potential for elevated inflation pressures over the next few years.

Energy:

Oil edged higher amid expectations that the U.S.-Iran talks will continue next week.

Although latest round of talks over Iran's nuclear program ended on Thursday without a deal, Oman's foreign minister and a U.S. official said the two sides had made progress and would likely meet again for talks.

The Omani said negotiations at the level of technical experts will continue in Vienna next week. This has allayed worries over imminent U.S. military action, said ANZ Research analysts.

However, it also "leaves little time to reach a deal before President Trump's deadline of 1-6 March," the analysts added.

Metals:

Gold rose as traders digest U.S.-Iran talks held overnight.

The latest round of talks over Iran's nuclear program ended Thursday without a deal and both sides remained far apart on key issues.

The U.S. increased pressure by presenting tough demands and sending more jets and warships to the region. Continuing tensions in the Middle East and Eastern Europe fuel risk aversion, said FXEM's Abdelaziz Albogdady.

This could direct investment flows toward the precious metal, he added.

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Copper fell as Chinese buyers have remained on the sidelines after returning from a weeklong Lunar New Year holiday, said ANZ Research analysts.

The build-up of copper inventories in China was also greater than usual during the holiday period, they added. This comes as stockpiles in global exchanges rose to a record high in late January, supported by changes in U.S. trade policy and mine disruptions, they said.

TODAY'S TOP HEADLINES

Fed's Miran Says Four Cuts Are Appropriate This Year

Federal Reserve governor Stephen Miran said he thinks the Fed needs to cut interest rates by about a percentage point this year in a Fox Business interview Thursday.

"Four cuts I think are appropriate," he said. "I'd rather get them sooner than later," he added.

U.K. Consumer Mood Darkens Amid Lingering Cost-Of-Living Squeeze

U.K. consumer sentiment fell unexpectedly in February as cost-of-living pressures continue to weigh on households.

Consumer confidence fell three points to minus 19 in the month, according to research group GfK's index, published with the Nuremberg Institute for Market Decisions on Friday.

Jack Dorsey's Block to Lay Off 40% of Its Workforce in AI Remake

Block, the payments company founded by Jack Dorsey that includes Square and Cash App, said Thursday that it plans to lay off 40% of its workforce, or more than 4,000 employees.

Dorsey alluded to artificial-intelligence tools as the reason for the cuts in a letter to shareholders.

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Expected Major Events for Friday

00:01/UK: Feb UK Consumer Confidence Survey

00:01/UK: Jan UK monthly automotive manufacturing figures

05:30/NED: Jan PPI

06:00/FIN: 4Q GDP

06:00/FIN: Jan Retail sales

07:00/SWE: Jan Foreign trade

07:00/SWE: Jan Retail sales

07:00/NOR: Jan Retail Sales

07:00/SWE: 4Q GDP

07:00/DEN: Jan Unemployment

07:00/TUR: Jan Employment / Unemployment

07:00/GER: Jan Foreign trade price indices

07:30/HUN: Jan Employment & unemployment

07:30/HUN: Jan PPI

07:45/FRA: Jan PPI

07:45/FRA: Jan Household consumption expenditure in manufactured goods

07:45/FRA: Feb Provisional CPI

07:45/FRA: 4Q GDP - detailed figures

07:45/FRA: 4Q Job creation

08:00/SPN: Feb Flash Estimate CPI

08:00/SWI: 4Q GDP

08:00/SWI: Feb KOF economic barometer

08:55/GER: Feb Labour market statistics (incl unemployment)

09:00/ITA: Dec Industrial turnover

09:00/BUL: Jan PPI

09:00/ICE: 4Q GDP

09:00/GER: Feb Bavaria CPI

09:00/GER: Feb North Rhine Westphalia CPI

09:00/GER: Feb Saxony CPI

09:00/GER: Feb Brandenburg CPI

09:00/GER: Feb Hesse CPI

09:00/GER: Feb Baden-Wuerttemberg CPI

10:00/MLT: Jan RPI

10:00/CRO: 4Q Flash Estimate GDP

10:00/CRO: 4Q GDP

10:00/BEL: 4Q Final GDP

10:00/ITA: Jan Foreign Trade non-EU

10:00/GRE: Jan PPI

10:00/GRE: Dec Turnover Index in Retail Trade

10:00/LUX: Jan PPI

All times in GMT. Powered by Onclusive and Dow Jones.

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This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

02-27-26 0022ET