European stocks seen as bullish as investors cheer gains

(RTTNews) – European equities could open slightly higher on Friday amid optimism surrounding the earnings season.

Inflation concerns linger, with St. Louis President James Bullard saying there is a 50 percent chance price pressures will continue amid a strong US economy and a tight job market. He argued that the central bank should be aggressive in the taper process.

Asian markets rallied as TSMC, the world’s largest chipmaker, raised its earnings outlook and China eased restrictions on home loans at some of its largest banks amid growing concerns about contagion from the debt crisis at China Evergrande Group.

The dollar retreated from a one-year high and headed for its first weekly decline against major peers as US 10-year bond yields fell further after the release of a weaker-than-expected Producer Prices report.

Gold was set for its best week in more than five months, while bitcoin extended a rise on a Bloomberg report that a bitcoin futures exchange-traded fund (ETF) will receive US Securities and Exchange Commission (SEC) approval.

Euro-zone foreign trade data and September European car registrations are due later in the session, kicking off an easy day for European economic news.

Across the Atlantic, trade can be affected by reactions to reports on retail sales, import and export prices and consumer sentiment.

Earnings news could also attract attention, with Charles Schwab, Goldman Sachs and JB Hunt among the companies required to release quarterly earnings before the opening bell.

US stocks rallied overnight as the likes of Morgan Stanley, Bank of America and UnitedHealth released strong earnings results, and a report showed producer prices fell to their lowest levels this year in September, helping to ease fears of stagflation to alleviate.

First-time US jobless claims fell below 300,000 for the first time in well over a year, a sign the job market is still improving.

The Dow climbed 1.6 percent to close at its best close in over a month, while the S&P 500 and the tech-heavy Nasdaq Composite Index both gained about 1.7 percent.

European stocks hit a two-week high on Thursday as optimism about strong earnings outweighed worries about inflation and policy tightening from the Federal Reserve.

The pan-European Stoxx 600 rose 1.2 percent. Germany’s DAX rose 1.4 percent, France’s CAC 40 index rose 1.3 percent and Britain’s FTSE 100 rose 0.9 percent.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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