China stimulus hopes lift FTSE miners, while US markets wait Meta earnings

• Chinese stimulus lifts Asian markets
• German Ifo survey shows tentative signs of optimism
• US tech earnings continue, with Meta next up

European markets are struggling to follow the lead of Asian indices, which ended the session in the green on hopes that we will see the Chinese push forward with a major fiscal spending plan. With the Chinese announcing that they will issue one trillion-yuan ($137 billion) worth of special treasury bonds in the fourth quarter, the government appears to be willing to push their deficit beyond what would ordinarily be deemed excessive in a bid to distribute money throughout the different regions of the country. There is a hope that this marks the beginning of a fiscal stimulus push, after measures taken by the PBoC to stimulate economic activity failed to gain traction. Elsewhere, the real estate crisis rumbles on, with property developer Country Garden appearing to have defaulted on a dollar bond after failing to pay the $15.4 million interest payment, 30-days after the original due date.

European markets remain in uncertain territory, with indices struggling for direction of late. On the FTSE 100, speculation over a potential fiscal push from China has helped drive upside for mining names such as Rio Tinto, BHP Group, and Antofagasta. The latest German Ifo business survey provided some grounds for optimism after a prolonged period of decline, with the headline business climate reading notching up a first gain since April. Notably, the survey saw improvements across the board, with business climate, current conditions, and expectations all improving in October. With inflation cooling and the manufacturing PMI having seen three-months of gains, there are tentative signs of hope for the German economy. However, recent services sector weakness does mean that Germany is now contracting across the breadth of the economy, bringing heightened expectations of a potential negative GDP reading in Q4. US earnings season continues to dominate today, with Meta due to maintain the tech focus in the wake of yesterday’s Microsoft and Alphabet releases. With their earnings coming after the bell yesterday, Alphabet’s circa 6% decline will act as a drag on the wider market today. Disappointing growth in their cloud business overshadowed what was a positive quarter from an earnings and revenue perspective. The size of the decline simply highlighted how important investors perceive the cloud service to be for future growth prospects. Today will see a focus on Meta, with shareholders hoping to see strong advertising growth and improved user engagement. While Meta have beaten analyst estimates for revenue in four of the last five quarters, they have been less reliable on the earnings front after beating on just two of those five occasions.