European stocks climbed, ending a three-day losing streak, with Reckitt (RBGLY, Financial) experiencing its largest surge in 24 years. Investors weighed the outlook for the U.S. economy after non-farm payroll growth fell short of expectations. By the close of the London market, the Stoxx Europe 600 Index had risen 1.1%. Reckitt's shares soared up to 12% after a U.S. jury cleared it and Abbott of charges relating to concealing risks in infant formula. This boost also lifted the personal care sector.
October saw European stocks record their largest monthly drop in a year, driven by disappointing corporate earnings and economic concerns. Attention is focused on the upcoming U.S. elections and the Federal Reserve meeting, with markets seeking insights into future interest rate trends.
Data revealed that U.S. corporate hiring slowed in October to its weakest pace since 2020, though unemployment remained low despite challenges from severe weather and strikes. A Schwab UK executive noted that the cooling labor market could reassure investors of a steady, albeit slow, downward trend in interest rates.
In the UK, bonds continued to decline following the Labor government's budget announcement and additional debt plans, spurring selling activity. The FTSE 250 index lagged behind, extending its losses after a 1.5% drop. Meanwhile, the UK's manufacturing PMI fell from 51.5 in September to 49.9.
European markets have eased their rally in recent weeks due to geopolitical tensions in the Middle East. However, investors are also preparing for another potential Donald Trump election victory, which previously saw European stocks underperform against U.S. markets, marking the weakest relative performance in eight U.S. administrations.
