EUROPEAN EQUITIES UPDATE: European bourses mostly lower, CAC 40 lags after Moody's downgrades France

STOXX 600: -0.2%

• European bourses began the European session on a modestly mixed footing, with indices generally trading on either side of the unchanged mark. As the morning progressed, sentiment slipped a touch to display a slightly negative picture in Europe.


• Today’s French/German PMI metrics ultimately painted the same picture; Manufacturing remains dire, whilst services continues to improve. The EZ-wide figure itself saw both components edge higher and above expectations; metrics which were unable to lift European indices off lows.


• German politics watchers will note a confidence vote in the government is expected, which Chancellor Scholz is seen losing; this will spark the formal kick-off for campaigning ahead of a February 23rd election, where polls currently have CDU in the lead, but the SPD's Scholz will be hoping to use the time to bounce-back and mount a challenge.

Sectors: Negative

• European sectors hold a strong negative bias, with a clear defensive tilt given the risk tone.


• Healthcare takes the top spot, after heavyweight Novo Nordisk (+1.9%) gains after it announced it is to invest USD 1.2bln in a new plant in Denmark, via Reuters. Further, it confirmed that regulators have given the green light to Novo Holding’s acquisition of Catalent.


• Autos parks itself at the foot of the pile, weighed on by losses in Porsche SE after the automaker withdrew guidance. Travel & Leisure is also on the backfoot today, with Entain pressuring the sector after reports that it is being sued by an Australian regulator, amid claims of money laundering.

Major Indices: DAX 40 -0.1%, CAC 40 -0.6%

• The DAX 40 is very slightly on the backfoot, in-fitting with the broader risk tone in Europe. In terms of stock specifics, Vonovia (-2.8%) slips after the Co. presented a deal to Deutsche Wohnen (+1.8%) for a potential tie-up. Autos are generally on the backfoot today after Porsche SE (-1.9%) withdrew is guidance and noted of a EUR 20bln impairment on its Volkswagen stake; peers such as BMW (-1.1%) and Mercedes (-0.9%) edge lower in tandem, but also given the defensive bias in Europe.


• The CAC 40 is the marginal underperformer in Europe today, which is not all too surprising after Moody’s downgraded France to Aa3; outlook stable; citing political fragmentation. As for stock specifics, Vivendi (+36.5%) soared at the open after its spin-off of Canal+ was successfully completed.

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

• Futures are very modestly on a firmer footing, with sentiment a little better vs in Europe.


• US day ahead: The US manufacturing PMI is seen little changed, though the services measure is expected to slip; the NY Fed Manufacturing report for December will also be out.

16 Dec 2024 - 10:05- EquitiesData- Source: Newsquawk