European Midday Briefing : Stocks Lack Momentum to Start Shortened Week

MARKET WRAPS

Stocks:

Shares in Europe struggled on Monday at the start of a shortened week, with few catalysts to spur much positive momentum.

However, Novo Nordisk stock opened sharply higher, partially recovering some of Friday's heavy losses after disappointing data for its experimental weight-loss drug CagriSema prompted a selloff.

U.S. Markets:

Stock futures ticked higher, with Nasdaq-100 contracts leading the way. Benchmark Treasury yields crept upward.

Over the weekend, Joe Biden signed stopgap spending legislation into law that will avert a government shutdown.

Forex:

Sterling was little moved even after U.K. economic growth data for third quarter were revised lower.

The economy showed no growth in the July to September period, according to the revised data Monday. Initial figures showed 0.1% growth. The revision appears to be mainly due to external influences rather than the domestic economy, Capital Economics said.

"Our hunch is that 2025 will be a better year for the economy than 2024."

Bonds:

European bond yields rose as traders digested remarks from Christine Lagarde.

In an interview with the Financial Times published on Monday, Lagarde said the central bank was getting "very close" to sustainably bringing inflation to its 2% target but she had a "little reservation" given services inflation remains elevated.

There was an "element of caution" to Lagarde's remarks, MUFG Bank said.

While the eurozone faces a hit from U.S. trade tariffs, high wage growth could support consumption and the services sector, MUFG Bank added.

Energy:

Oil prices inched higher after softer-than-expected U.S. inflation data eased worries about Fed rate cuts next year, but concerns over global demand trends continued to weigh on the market.

Uncertainties over market developments next year when Donald Trump returns to the White House has added to an overall cautious sentiment.

Metals:

Gold was broadly stable on rate cut hopes. Traders now await the last batch of U.S. economic data this week, including the consumer confidence reading due later Monday and initial jobless claims on Thursday.

Base metals edged higher. Sucden Financial said mean reversion strategies have come into play.

"We expect this trend to hold in the coming days, with prices across the complex edging slightly higher. However, given the thinning liquidity over the holiday period, we are cautious about the potential price choppiness until the year-end."

EMEA HEADLINES

BNP Paribas, AXA Sign Deal for $5.3 Billion Acquisition of AXA IM

BNP Paribas said its BNP Paribas Cardif insurance business and AXA signed a deal for the 5.1 billion-euro ($5.32 billion) purchase of AXA Investment Managers.

The French groups said in early August that they were in exclusive talks for a deal that would more than double the funds BNP Paribas oversees to create one of the largest money managers in Europe. The deal also includes a long-term partnership under which BNP Paribas would manage a large part of insurer AXA's assets.

Aviva Makes Firm $4.7 Billion Offer For Direct Line

Aviva formalized the terms of its takeover offer for Direct Line, which values the non-life insurer at around 3.7 billion pounds ($4.65 billion).

Insurer and asset manager Aviva won over its smaller rival with a cash and shares offer worth 275 pence a share in early December. This is 10% higher than its previously rebuffed approach and represents a 73% premium on Direct Line's closing price on Nov. 27.

Swisscom's Vodafone Italia Deal Approved by Italy's Competition Regulator, Government

Swisscom said that both Italy's competition watchdog and the Ministry of Enterprises and Made in Italy cleared its acquisition of Vodafone Italia.

The Switzerland communications group said late Friday that the deal was approved by all competent authorities, and is expected to be completed in the first quarter of 2025.

GLOBAL NEWS

A Looming Threat to Bitcoin: The Risk of a Quantum Hack

Bitcoin's rally faces a risk that isn't on the radar of most crypto investors: quantum computing.

The nascent technology, which drew attention this month after Google claimed a breakthrough with its new Willow quantum-computing chip, could one day enable hackers to break the encryption that keeps bitcoin secure. Such a hack could torpedo bitcoin's price, by allowing thieves to swipe coins out of supposedly secure digital wallets.

The Not-So-Secret Way Around U.S. Tariffs

U.S. agents had to climb over piles of boxes to see inside the warehouse. They had learned about the secret building after finishing their tour of cabinet production facilities in Penang, Malaysia.

The place was packed with boxes of ready-to-ship wooden cabinets that looked identical. Some were stamped as made in China and others had labels saying they were made in Malaysia, according to a Customs report reviewed by The Wall Street Journal.

Wall Street's IPO Engine Picked Up in 2024

Wall Street's lucrative engine for initial public offerings picked up in 2024 but still lagged behind historical standards, according to a year-end look at the market by Renaissance Capital.

Companies postponed offerings amid interest rate uncertainty and market volatility. The banking industry is hopeful for a pickup in IPO and other business in 2025.

Satellite Images Show North Korea Boosting Arms Flow to Russia

North Korea and Russia are deepening their military cooperation, as Pyongyang ramps up the supply of arms to Moscow for the war in Ukraine and receives much needed cash and oil from the Kremlin in return.

Recent satellite images show that North Korea is shipping more munitions to Russia and is expanding arms production at home to churn out the weapons Moscow needs to feed its voracious war machine. Assistance from North Korea is allowing Russia to press its advantage against exhausted Ukrainian troops and could help it resist pressure from the incoming administration of President-elect Donald Trump to end the conflict.

U.S. Navy Shoots Down Own Plane as Fresh Strikes Target Houthi Rebels in Yemen

Two U.S. Navy pilots ejected from their jet fighter over the Red Sea after being caught in "an apparent case of friendly-fire," U.S. Central Command said Sunday, as American forces conducted a new round of attacks against the Houthi militant group in Yemen overnight.

The military said the two pilots safely ejected from their F/A-18 after it was hit by fire from the guided-missile cruiser USS Gettysburg. The jet fighter had flown off the USS Harry S. Truman aircraft carrier and both ships are part of the same strike group. One of the crew members sustained minor injuries and an investigation is under way, the military said.

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

(END) Dow Jones Newswires

12-23-24 0530ET