European stocks struggled for momentum on Thursday, as investors turned their attention away from central banks and focused on some mixed corporate news.

Shares of Burberry and HelloFresh were among the biggest fallers after both companies issued trading warnings.

Stocks to Watch

Volkswagen has a tough year ahead of it, Bernstein said, with the car maker having to grapple with slowing demand and pricing pressure in a weakening macroeconomic environment, offsetting gains from abating production headwinds.

Tech delays, pushing new models back to late 2024, will exacerbate these problems, Bernstein said, adding that slowing electric-vehicle demand could also sting. Still, excess capital from this year will help.

Volkswagen will probably hit an operating margin of 7% this year, albeit a downgraded target, Bernstein said.

U.S. Markets:

Stock futures were subdued premarket. Retail has been a key focus this week, and that will likely continue, with financial updates due from Walmart and Macy's before the opening bell.

Shares in Cisco fell nearly 10% ahead of the open after the network equipment giant slashed revenue forecasts. If sustained, the fall would wipe out $20 billion in market value and would be the biggest drop for the Dow Jones Industrial Average component since May 2022.

Bond markets were stable with the 10-year yield edging lower to trade around 4.5%.


EUR/USD strength should become more apparent from the second quarter onwards and end the year at 1.15, ING Research forecasts.

"Our forecast for a higher EUR/USD next year hangs wholly on the view that the U.S. will slow down, inflation will ease and the Fed will be able to make monetary policy less restrictive," ING said.

EUR/USD's rebound has room to extend beyond the end-August high of 1.0945, based on technical charts.

Although EUR/USD's outsized recovery since Tuesday seems to be running ahead of itself, its weekly moving average convergence divergence indicator is turning positive, suggesting there's scope for the currency pair to rebound further, UOB Global Economics & Markets Research said.

However, any EUR/USD advance is probably part of a "recovery phase," and the probability of it breaking above subsequent resistance at 1.1065 seems lower.

The dollar has rebounded from its recent steep drop following weaker-than-expected inflation data, and it should continue to recover, CPT Markets said.

The currency has been helped by Wednesday's stronger-than-expected U.S. retail sales. Still, the inflation data "has strengthened the conviction among investors that the Federal Reserve may refrain from raising interest rates again" and expectations that the Fed could cut rates in May next year have increased, CPT Markets said.

CPT Markets also said rate differentials could continue to weigh on the yen versus the dollar. Lower-than-expected Japanese GDP growth figures could further complicate the Bank of Japan's efforts to transition away from its long-standing ultra-loose monetary policy, which could exacerbate the yen's performance.


The potential end of rising German bond rates is within view, with the 10-year Bund yield likely stabilizing between 2.5% and 2.75%, according to Neuberger Berman. Over time, the driver of lower German rates will likely be the trajectory of eurozone core inflation, it said.

"If it falls below 4%, that should lead to more dovish policy from the European Central Bank."


Oil prices were more than 1% lower following an increase in U.S. crude inventories and after the U.S. administration said it would enforce sanctions against Iran.

"While sanctions have remained in place, the U.S. has not enforced them strongly, which has allowed Iranian oil exports to grow this year," ING said, adding that a stricter enforcement and subsequent supply loss would be enough to tighten up the global oil balance significantly through 2024.


Base metals were weaker in London, with gold a touch firmer, as worries over demand and economic growth pressured commodities.

"The macro environment has lost some upward momentum over the past 24 hours," Peak Trading Research said.

Lower crude oil prices were helping to bring the whole commodity complex lower, Peak said, but most concerns remained around economic growth with demand subdued.


Siemens Shares Climb as Results Beat Expectations

Shares in Siemens rose on Thursday after the German conglomerate's fourth-quarter results came in above expectations and a strong free cash flow drove a dividend lift.

At 0850GMT, the stock traded 5.5% higher at EUR146.48.

Burberry Warns of Profit Hit Amid Slowdown in Luxury Demand

Burberry Group warned that the global slowdown in luxury demand is hurting its performance and that it is unlikely to achieve its guidance if the trend continues, despite beating market expectations for the first half of its fiscal year.

The British luxury-goods company said Thursday that if weakness in demand persists, it is unlikely to achieve previous guidance of low double-digit revenue growth in fiscal 2024.

Zurich Insurance Confirms Mid-Term Targets Ahead of Investor Meeting

Zurich Insurance confirmed its mid-term targets set last year and set new cost-savings goals ahead of its investor day meeting.

The Switzerland-based insurance company said Thursday that its 2023-to-2025 goals are intact, including its business operating profit return on equity goal of more than 20%. It is also targeting earnings per share growth of 8%, a solvency ratio of at least 160%, and cash remittances above $13.5 billion.

Aegon Lifts Operating Capital Generation View After 3Q Beat

Aegon raised its 2023 guidance as it reported better-than-expected gross operating capital generation for the third quarter on business growth and improved underwriting variances.

The Dutch insurer and asset-manager company now sees full-year operating capital generation from its units to be around 1.2 billion euros ($1.30 billion), against previous guidance of more than EUR1.0 billion, it said on Thursday.

Publicis Names EMEA Chief Loris Nold as New CFO

Publicis Group appointed Loris Nold, the current head of its operations in Europe, the Middle East and Africa, as chief financial officer, replacing Michel-Alain Proch.

The Paris-based advertising group said Proch, who joined the company in 2021, will step down in February to take on a new role outside the company. Nold's appointment is effective from the same month, the company said Thursday.

UBS Spared $2 Billion in Penalties After French Supreme Court Calls for New Trial in Tax Case

UBS Group won't have to pay around $2 billion after the French Supreme Court partly overturned a decision from a lower court that had fined the bank in a long-running tax-fraud case, but confirmed a ruling that the bank had helped wealthy clients in France evade taxes.

The latest ruling, announced Wednesday by the Supreme Court, effectively rescinds the financial penalties imposed on UBS in December 2021.


The Global Fight Against Inflation Has Turned a Corner

Inflation is falling faster than expected across advanced economies, marking a turning point in central banks' two-year battle against surging prices.

Declines in consumer price growth, to below 5% in the U.K. last month and around 3% in the U.S. and eurozone, are fueling expectations that central banks could take their feet off the brakes and pivot to cutting interest rates next year.

China Pledges to Attract More Foreign Investment, Boost Consumption

China's state planner said it would step up efforts to attract foreign investment and improve domestic consumption, as Beijing moved to provide more support for the economy.

The National Development and Reform Commission said Thursday that it will introduce more policies for foreign capital to enter China. It will also work with government bodies to remove barriers to areas of the economy that are off-limits to foreign investment, it said.

Biden, Xi Jinping Dial Back Rancor in Summit to Stabilize Ties

WOODSIDE, Calif.-President Biden and Chinese leader Xi Jinping struck a less contentious tone at their summit Wednesday, a reset that will be quickly tested by deep U.S.-China disagreements.

With relations between the two countries near a low point, Biden and Xi agreed to resume communications between their militaries, cooperate on choking off fentanyl production and begin a dialogue on the risks of artificial intelligence. Their four hours of talks at a secluded estate outside San Francisco included a walk in the wooded grounds.

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

(END) Dow Jones Newswires

11-16-23 0536ET