SAP Earnings to Drive DAX Amid Cloud Business Surge

SAP's third-quarter earnings report today will set the tone for Germany's DAX index, where its shares have risen 53% this year due to strong performance in cloud and business-planning software. Broader markets are influenced by China's latest stimulus measures, including a lending rate cut, while Bitcoin has surged 18% as Donald Trump's odds improve for the upcoming US election. The euro continues to slide against a strengthening US dollar, pressured by the widening US-German bond yield gap.

Equities

The FTSE 100 ended Friday down 0.3%, as British American Tobacco dragged the index lower following its settlement of a $23.6 billion lawsuit in Canada. The index still logged a weekly gain, supported by expectations of a Bank of England rate cut in November after inflation data came in below target. Meanwhile, the domestically focused FTSE 250 rose 0.2%, marking a two-week high. British American Tobacco fell 3.2%, while UK-listed precious metal miners rose 1.7%, benefiting from record-high gold prices. Industrial metal miners also gained, with a 1.3% rise, as China's stimulus measures boosted copper prices.

Elsewhere, Future PLC plunged nearly 20% to the bottom of the FTSE 250 after the publishing firm announced that CEO Jon Steinberg would step down next year. Dowlais Group surged 11.5% after BNP Paribas upgraded the engineering group, while Boohoo tumbled 8.4% after the online retailer said its CEO John Lyttle would step down, and the company announced a strategic review that could lead to a breakup.

In the US, the Dow Jones Industrial Average and S&P 500 reached new record highs on Friday, supported by strong earnings from Netflix and gains in tech stocks. Netflix jumped 11.1% after surpassing Wall Street estimates for subscriber growth and projecting continued momentum through the year. Apple added 1.2%, with strong iPhone sales in China lifting its stock, while Nvidia rose 0.8% after Bank of America raised its price target on the stock.

Despite gains for the Dow and S&P, American Express weighed on the index, dropping 3.1% after missing revenue expectations. In the energy sector, SLB fell 4.7% after posting earnings below forecasts, dragging other oilfield services companies like Baker Hughes and Halliburton down 1.3% and 2.1%, respectively. US crude prices slumped 7% over the week due to concerns over Chinese demand and the conflict in the Middle East, making energy the S&P's worst-performing sector for the week. Meanwhile, CVS Health declined 5.2% after replacing CEO Karen Lynch and withdrawing its 2024 profit forecast.

Forex & Commodities

The US dollar remained strong, buoyed by rising odds of a Donald Trump victory in the upcoming election, which is seen as potentially keeping interest rates high. The dollar index stood at 103.49, gaining 0.55% for the week, despite a slight dip on Friday following China’s announcement of further stimulus measures. The euro was flat at $1.0862, while the British pound held steady around $1.3041. The yen was down 0.2% at 149.26 per dollar but stayed just below the 150 mark after briefly breaching it last week.

Gold hit a new high, rising 0.3% to $2,727.95 per ounce, with analysts targeting $2,800 by year-end due to continued geopolitical risks and expectations of lower interest rates globally. Silver also climbed to its highest level since 2012, reaching $33.95 per ounce.

Oil prices recovered slightly in Asian trading, with Brent crude futures rising 0.37% to $73.33 per barrel, and US West Texas Intermediate crude gaining 0.45% to $69.53. These gains followed a steep 7-8% drop last week, driven by concerns over slowing demand from China, despite Saudi Aramco’s CEO remaining optimistic about Chinese oil demand.