Why European Markets Are On A Roll Right Now

European stocks wrapped up Tuesday on a high note, riding on two key tailwinds: Fed rate cut hopes in December and solid earnings beats from individual companies.

The Big Picture: The Stoxx 600 (basically Europe’s S&P 500) jumped 0.91%. Germany’s DAX led the charge with +0.97%, followed by France’s CAC 40 (+0.83%) and UK’s FTSE 100 (+0.78%). Most European markets closed stronger—Belgium, Czech Republic, Poland, Spain, Sweden all posted gains. Turkey was the odd one out with weakness.

Stock Spotlight:

Winners:

• Kingfisher (UK home improvement) surged 6%+ after raising full-year profit guidance from £480-540M to £540-570M. Q3 sales hit £3.25B, up 1% YoY.
• Airtel Africa climbed 6.5%
• Heidelberg Materials (Germany) popped 6%+
• Banking and auto stocks also participated: Commerzbank, Infineon, Porsche, Daimler Truck all gained 2-3.4%

Losers:

• Beazley tanked 9% after warning of growth slowdown, slashing premium forecast from low-mid single digits to flat-low single digits
• Intertek fell 5.71%
• EasyJet dropped 1.52% despite beating profit expectations (sometimes the market doesn’t care)

Why It Matters - The Economic Backdrop:

Germany’s economy is stuck: Q3 GDP came in flat (0% growth) as export weakness canceled out any gains from investment. Exports fell 0.7%, but investment in machinery/equipment actually grew 1.1%. The problem? Private consumption cratered—first decline since Q4 2023 as people spent less on dining and travel.

France’s consumers getting cold feet: Consumer confidence index dropped to 89 in November from 90 in October (stays below the 100 long-term average). People’s views on their personal finances are basically frozen.

The Takeaway: Markets are betting the Fed will cut rates next month, which is lifting sentiment across the board. But underneath, Europe’s economy is showing cracks—stagnant growth, cautious consumers, weak exports. The rally might be more about rate-cut optimism than genuine economic strength.