Europe’s benchmark Stoxx 600 index closes at all-time high after data points to an economic recovery

The pan-European Stoxx 600 index marked a record close on Thursday, gaining 0.9% through the session to surpass its previous high from January 2022.

Not all sectors were higher, with food and beverage stocks down 1.3% as autos gained 2.7%.

Following better-than-expected purchasing managers’ index data from the euro zone and a slew of earnings, Germany’s DAX index rose 1.47%, while France’s CAC 40 was up 1.27%.

The U.K.’s FTSE 100 was up by a more modest 0.3%.

The number of individuals in the U.S. filing new claims for unemployment benefits fell more-than-expected last week, suggesting strength in the labor market.

Initial jobless claims for the week ending on Feb. 17 totaled 201,000, which was a decrease of 12,000 from the previous week’s revised level, according to latest figures from the U.S. Department of Labor. Insured unemployment was 1,862,000 for the week ending Feb. 10. Claims are hovering at historically low levels, Reuters reported.

— Pia Singh

Euro zone manufacturing contracted in February, but the services sector returned to growth, preliminary data showed Thursday.

The manufacturing purchasing managers’ index fell to 46.1 from 46.6 in January, while services PMI rose to 50.0 from 48.4 the previous month.

— Karen Gilchrist

Mercedes-Benz shares gained 4% on Thursday morning after the German carmaker beat fourth-quarter earnings expectations and announced a new share buyback program, despite warning of “exceptional” risks in the year ahead.

Fourth-quarter earnings before interest and taxation (EBIT) came in slightly ahead of consensus expectations at 4.33 billion euros ($4.7 billion), taking the full year figure to 19.66 billion euros. Revenues rose 2% in 2023 to 153.2 billion euros from 150 billion during the previous year.

The group also announced an additional share buyback program worth up to 3 billion euros, with the repurchased shares set to be subsequently cancelled.

However, Mercedes-Benz warned that supply chain bottlenecks for critical components remain a “significant risk factor” and said that an “exceptional degree of uncertainty” surrounds geopolitical events and trade policy, particularly in the form of the Russia-Ukraine and Middle East conflicts and tensions between Western powers and China.

– Elliot Smith

Rolls-Royce shares jumped more than 8% in early trade in London after the British aerospace group more than doubled its annual profits in 2023 and forecast further momentum this year.

Rolls-Royce, which manufactures jet engines for commercial aircraft along with power systems for ships and submarines, reported an underlying operating profit of £1.6 billion ($2 billion) in 2023, more than double the £652 million posted in 2022.

“Our transformation has delivered a record performance in 2023, driven by commercial optimisation, cost efficiencies and progress on our strategic initiatives,” CEO Tufan Erginbilgic said in a statement.

“This step-change has been achieved across all our divisions, despite a volatile environment with geopolitical uncertainty, supply chain challenges and inflationary pressures.”

The group forecast underlying operating profit growth of at least 6% in 2024, putting the annual figure in the range of £1.7 billion to £2 billion.

Rolls-Royce was the top performer in Britain’s FTSE 100 in 2023, soaring over 200% on the back of a profit forecast upgrade and the announcement in November that profits could quadruple by 2027.

– Elliot Smith

Shares of Swiss food giant Nestle were down 4.8% in early trade after reporting lower than expected sales for the full year as inflation continued to weigh on consumer demand.

CEO Mark Schneider told CNBC that the company expects food inflation to fall but that some “choppiness” will remain as certain commodity prices remain at record highs.

— Karen GIlchrist

Shares of Delivery Hero were down 6.2% in early deals, following news that it ended negotiations around the potential sale of its Foodpanda business in selected Southeast Asian markets.

On the other end, U.K. pharmaceuticals business Indivior was up 16.7% after recording a fourth-quarter pre-tax profit amid higher revenues. The company announced that it is considering shifting its primary listing to the U.S.

— Karen Gilchrist

JP Morgan has uncovered several top European stocks offering substantial upside potential – as well as some ‘unattractive’ names right now.

According to the investment bank, U.S. stocks are “ahead of international,” growth stocks have been “outperforming” value names and large-cap stocks are “again beating” small ones.

CNBC Pro subscribers can read more here on the bank’s top and least preferred stocks.

— Amala Balakrishner

Treasury yields shot up last year, and investors flocked to allocating to cash which have yielded around 5% or even more.

Those yields have since dropped, and Wall Street are widely expecting them to go fall even further, leading investors to exit cash and get into other income-generating assets. But recent stronger-than-expected economic data on consumer and producer prices has raised the possibility that the U.S. Federal Reserve will cut rates later rather than sooner.

CNBC Pro subscribers can read more here about where these yields may be headed, according to Morgan Stanley Investment Management’s Jim Caron. He also outlined three scenarios for the 10-year yield, explaining how each could affect stocks.

— Weizhen Tan

European markets are expected to open higher Thursday.

The U.K.’s FTSE 100 index is expected to open 1 point higher at 8,369, Germany’s DAX up 4 points at 18,681, France’s CAC 14 points higher at 8,101 and Italy’s FTSE MIB up 30 points at 34,559, according to data from IG.

Earnings are set to come from Julius Baer, Acciona, Nationwide Building Society, Rolls-Royce, Aviva and Wizz Air. Preliminary euro zone services and manufacturing activity data for May is due, as are consumer confidence figures for the single currency area.

— Holly Ellyatt