European stocks look set to struggle for direction next week, with corporate and economic calendars short of data juicy enough to eclipse credit market concerns as Thanksgiving truncates the US trading week.
With the best part of this earnings season out of the way, investors are faced with a paper-thin corporate calendar that mainly focuses on a handful of UK companies.
The FTSEurofirst 300 index of top European shares was on track for its third successive week of losses in afternoon trade on Friday, as investors fretted about how much more banks would need to write down as a result of a credit crunch stemming from a meltdown in risky US mortgages.
The index has rallied 5 percent from lows hit in August but the recovery has been tentative and sensitive to any bad news from banks. Analysts said they did not see a clear rebound any time soon."We've run out of puff now for a while, we have already entered a phase where the market's trading sideways," said Mike Lenhoff, chief strategist at Brewin Dolphin in London.
"The market will just continue to trade sideways," he added. "When all is said and done, it won't amount to very much." Investors will focus on a third-quarter trading update from Scottish & Newcastle (S&N) on Tuesday after Carlsberg and Heineken this week increased their bid for the brewer, raising the stakes for S&N, which again emphatically rejected the offer. "Perhaps we can hear a little bit about what their strategy is in relation to that," said Henk Potts, equity strategist at Barclays Stockbrokers.
Merger and acquisition activity in the mining sector is also likely to attract the market's attention, with BHP Billiton Chief Executive Marius Kloppers due to give a media briefing for South African press on the proposed take-over of Rio Tinto over the weekend.
Rio shares rose on Friday on market talk that BHP is to offer 3.5 shares of its shares for every Rio share in its bid to buy its rival, traders said. Both Rio and BHP declined comment. Investors with a penchant for auto shares can eye Reuters autos summit due in Frankfurt running from Monday November 19 to Wednesday November 21.
Tuesday is also due to bring final earnings results from Enterprise Inns and first-half earnings from ICAP. Investors looking for clues on the future of UK interest rates will on Wednesday scour minutes from the Bank of England's November meeting, when it held borrowing costs at 5.75 percent. Also in the UK, third-quarter British GDP figures are due on Friday.
"We're looking for further deterioration in the (UK) economic data as to try and get a clue as to how quickly the next interest rate cut is going to come through," Barclays' Potts said. Other data due includes German producer price inflation for October and, from across the Atlantic, the final reading of the Reuters/University of Michigan consumer sentiment index for November.
First-half earnings from Air France, a third-quarter trading update from WH Morrison Supermarkets and final earnings results from Daily Mail and General Trust round out a thin earnings agenda.