Europe: Stocks rise as earnings roll in

[FRANKFURT] European stocks climbed with US equity futures on Thursday as investors balanced strong corporate earnings against the threat to the economic recovery from the spread of the delta virus variant.

The Stoxx 600 Index drifted higher, with Rolls-Royce Holdings gaining after announcing a surprise first-half profit and Siemens AG up after the German engineering company posted better-than-expected third-quarter results.

Treasuries were little changed with the US dollar, while oil was steady after several days of losses on the risks to demand posed by the delta variant, especially in the key market of China.

With stocks at or near record highs, investors are keeping an eye on the fast-spreading delta strain of the coronavirus, which is prompting new mobility curbs and a rally in sovereign debt. Also on the agenda are prospects of a pullback in stimulus after vice-chairman Richard Clarida said on Wednesday the Fed is on track for a lift-off in interest rates in 2023.

The US job market remains a key window onto the outlook, with the latest economic data showing a much softer-than-expected ADP employment report but a record expansion for US service industries. American jobs numbers are due on Friday.

"Employment getting back to full capacity, is going to be an important marker for the Fed to start to taper," Erin Browne, multi-asset strategies portfolio manager at Pacific Investment Management Co, said on Bloomberg Television. "You're going to continue to see growth numbers look quite robust - remember, we both have monetary support which is fading but still out there, as well as fiscal support across developed markets which are supporters for growth."

BLOOMBERG