EUROPEAN EQUITIES UPDATE: European bourses are marginally firmer, Airliners sink after JET2 LN update

STOXX 600: +0.3%

• European bourses opened mixed and traded tentatively on either side of the unchanged mark, before sentiment improved a little to now show a mostly positive picture.


• On the trade front, the POTUS said US President Trump said it is possible that someday tariffs will replace income tax. Most recently Reuters reported that Japan and the US are close to finalising lower tariffs on Japanese autos - no follow through to European automakers. Elsewhere, focus is on the UK-fiscal front, whereby Chancellor Reeves dismissed forecasts of a GBP 50bln "black hole" in the public finances, ahead of the Autumn budget.


• Today’s session has seen some Construction PMI releases; the EZ printed a better-than-prior figure, but no real reaction across assets. Elsewhere, EZ Retail Sales printed below expectations, whilst priors were revised higher; again no move on this. There have also been a number of German economic forecasts from the likes of the IFW, RWI and Ifo; the latter two revised down their outlook for both 2025 and 2026. Not entirely surprising for Germany, but puts more focus on the region’s fiscal spending plans which plans to boost growth.


• Looking ahead from a European perspective, focus on ECB’s Cipollone and then attention will shift to the US side of things.

Sectors: Positive

• European sectors opened mixed but now hold a slight positive bias.


• Media takes the top spot, joined closely by Retail and Basic Resources. Nothing really driving the upside across these sectors today, seemingly just broad based strength across the top performers, with no real clear outperformer.


• Travel & Leisure is found right at the foot of the pile, and is the clear underperformer today. Downside which has been driven by Jet2 (-14%), after the Co. provided an awful trading update, where it now sees EBIT at the lower end of its guided range – peers such as easyJet (-3%) and Wizz Air (-1.5%) also move lower in tandem.


• Healthcare also sits towards the foot of the pile, giving back some of the prior day’s losses, but also following an update from Sanofi (-8.7%); the Co. announced that amlitelimab met all primary and key secondary endpoints in the COAST 1 phase 3 study. Though analysts highlight that the efficacy of the drug did not meet expectations.

Others:

• Burberry -2% (did open higher); Co. is to re-join UK's FTSE 100 index after one-year absence, Bloomberg reports.


• Lloyds +1.5%; reported to be mulling job cuts in a performance overhaul.


• BMPS -1% / Mediobanca -1.1%; Shareholder take-up in BMPS bid for Mediobanca exceeded the minimum threshold of 25% of Mediobanca's capital.


• Iberdrola -0.2%; US is reconsidering the approval of Iberdrola's New England offshore wind farm off Massachusetts, via Reuters citing a court filing.


• Porsche AG -0.5%; Co. is to drop out of the DAX 40.

US Equity Futures: ES +0.2%, NQ +0.2%, RTY +0.1%

• Futures are modestly firmer today, with the ES / NQ building on some of the strength seen in the prior session.


• As for key pre-market movers; Salesforce (-6.5%) slips despite a Q2 beat, but with focus on softer-than-expected guidance which analysts said points to muted growth, raising concerns that its AI products are not yet delivering expected uplift amid intensifying competition. Elsewhere, HP Enterprise (+2.9%) gains after a Q3 beat. NVIDIA (+0.7%) gains on reports that Chinese firms still want Nvidia chips despite government pressure not to buy, via Reuters.


• Ahead of Friday’s jobs report, ADP National Employment data for August is expected to post +65k (prev. 104k); last time out, the median change in annual pay for job stayers was unchanged at 4.4% Y/Y, while for job changers, it rose to 7.0% Y/Y from 6.8%. Weekly initial jobless claims are expected at 230k from 229k for the week of August 30th, while continuing claims for the week of August 23rd are seen at 1.962mln from 1.954mln. US Q2 unit labour costs are expected to be revised down to 1.2% from 1.6%, and productivity is seen revised up to 2.7% from 2.4%. The US trade deficit is seen widening in April to USD 75.7bln from USD 60.2bln. The ISM services PMI is likely to rise to 51.0 in August from 50.1 in July. After today’s data, the Atlanta Fed will update its GDPNow tracking estimate for Q3, which is currently modelling growth of +3.0%.

04 Sep 2025 - 10:20- ForexData- Source: Newsquawk