European stocks flat; Luxury carmaker Mercedes up 4.5%, on pace for best trading day since 2022
European stocks traded around the flatline on Wednesday, with some stocks particularly buoyed by earnings, as investors awaited the conclusion of the U.S. Federal Reserve’s meeting.
The pan-European Stoxx 600 was 0.03% lower at 3:45 p.m. in London (11:45 a.m. ET), with most major indexes and sectors positive.
The U.K.’s FTSE 100 index made gains of 0.6%, Italy’s FTSE MIB advanced 0.3% and Spain’s IBEX 35, which has performed well recently, rose 0.5%.
Meanwhile, Germany’s DAX fell 0.5%, while France’s CAC 40 was last seen down 0.1%.
The big event for markets is the Fed’s interest rate cut today, with a quarter-point trim widely seen as a done deal by traders. If the Federal Open Market Committee acts as expected, it will bring the federal funds rate to a range between 3.75%-4.00%.
What’s less certain is whether Chair Jerome Powell will strike a dovish tone in his post-meeting comments.
Following a potential cut this week, 84% of respondents see another reduction in December, and 54% see a third in January, according to the October CNBC Fed Survey. A total of 100 basis points of rate cuts are forecast this year and next, bringing the fed funds rate down to 3.2% by the end of 2026.
In Europe, Germany’s Mercedes-Benz Group on Wednesday reported a 70% fall in third-quarter operating profit, citing charges related to thousands of job cuts as it seeks to save 5 billion euros ($5.81 billion) by 2027. Earnings before interest and taxes (EBIT) came in at 750 million euros for the quarter, down sharply from 2.5 billion euros in the same period last year.
The luxury carmaker, like its European industry peers, faces a perfect storm of challenges as robust Chinese demand and increased expenses due to U.S. tariffs take their toll. Nonetheless, shares of the Mercedes-Benz Group gained 4.5% on Wednesday, paring some earlier gains that put the firm on track for its best trading day since July 2022.
UBS
shares fell 1.1% after the Swiss banking giant posted net profits of $2.5 billion during the third-quarter, outweighing the $1.85 billion forecast by analysts, as revenues of $12.76 billion also beat expectations.
Santander
posted a record nine-month profit, rising 7.8% year-on-year, which the bank put down to strong business performance and efficiencies, such as simplifying operations, fewer bad loans and credit risks, and more customers. Its shares were last seen 4.3% higher on Wednesday.
The firm’s revenue hit 15.3 billion euros in the third quarter, up 1% year-on-year but narrowly missing analyst estimations, according to data compiled by LSEG. Its net operating income, however, slightly overperformed at 8.99 billion euros, a 2% increase on last year’s quarter. It held tight on its 2025 guidance of 62 billion euros in revenue.
However, Santander’s British subsidiary delayed its results following a court judgement on Friday that ruled it must disclose the dealer commissions on motor finance transactions, as part of the fallout from the motor finance scandal.
Source: CNBC
