EUROPEAN EQUITIES UPDATE: Indices mixed amidst a slew of earnings, ADS GY -6% after flagging tariff hit

STOXX 600: -0.1%

• European bourses opened mixed and have continued to trade sideways throughout the morning, though more recently, some upside has been seen. There has been an exceptional amount of earnings today for traders to digest, and this comes ahead of a packed docket, including: FOMC policy announcement, Mag 7 earnings and US data (details in US section).


• Already, European traders have had French GDP (marginally beat expectations), German Retail Sales (beat), Spanish CPI (mixed), German GDP (Q/Q in-line; Y/Y firmer), EZ Sentiment (stronger-than-expected), EZ GDP (above expectations) - little move seen across the equities complex.


• Trade-related updates have cooled down since the EU-US trade deal on Monday. On Tuesday, the US-China meeting in Sweden concluded that officials aim to extend the current trade truce by 90 days; now we await US Treasury Secretary Bessent to meet with US President Trump for a final stamp of approval. No indications of what Trump will do thus far.

Sectors: Mixed

• European sectors are mixed, and with the breadth of the market fairly narrow, aside from the day’s underperformer.


• Chemicals is weighed down by post-earnings losses in Symrise (-6%), where the co. reported a revenue slowdown; gains in BASF (+1%) have failed to lift sentiment in the sector, after it reported strong figures across the board.


• Energy is found at the top of the pile, boosted by gains in oil prices; the complex remains at elevated levels after US President Trump confirmed that his Russian counterpart must agree to a Ukraine ceasefire in 10 days to avoid tariffs. Most recently, the complex has slipped off its best levels (see commodities section).


• Consumer Products is found around the middle of the pile, given the mixed earnings from within the sector; in Luxury (discussed in CAC 40 section), Kering (+4%) and Hermes (-4%) are playing tug-of-war, whilst Adidas (-7%) adds to the downside after its H1’25 update. The German sportswear giant reported strong profits, attributed to resilience in the retro shoe market, though it was still shy of expectations; further adding to the pressure is the co. flagging a USD 231mln tariff-related hit.


• The Autos sector has been pressured today, namely by post-earning losses in Mercedes Benz (-0.8%); the co. saw its earnings drop, attributed to tariffs and China. Elsewhere, Porsche AG (+2.5%) benefits despite reporting poor Q2 metrics, but the CEO did reiterate that momentum is to be gained in 2026.

Others: FTSE 100 -0.2%, DAX 40 U/C, CAC 40 +0.4%, SMI U/C

• The FTSE 100 is on the back foot today and is one of the worst performers in Europe thus far. Key movers today populate the bottom of the index; Taylor Wimpey (-7%) sank at the open after reporting a H1 loss due to cladding provisions, with underlying profits also lower. BAE Systems (-2.5%) is posting losses despite lifting its FY guidance and reporting marginally better than expected figures. As for banking giant HSBC (-4%), the Co. reported weak metrics across the board and announced a USD 3bln buyback. And healthcare giant GSK (-0.3%) opened higher after reporting decent Q2 results and lifting FY25 guidance to the top end of the prior guidance.


• The CAC 40 is incrementally higher today but off its best levels. Key movers in the Luxury sector today, with both Kering (+4%) and Hermes (-4%) reporting; the former missed on its H1 revenue expectations but highlighted that it is expecting Gucci to improve going into Q3 – on China, the Co. highlighted that it does not know yet when trends will change in China. As for Hermes, metrics were actually in line/better than expected, and also highlighted that it is seeing no change of the trend in China. It is not entirely clear the reason for the divergence between the pair, but some analysts have pointed out that Hermes had lofty expectations, given it had managed to weather the luxury downturn better than rivals. Other key movers today: Danone (+6.7%, Q2 beat and affirmed guidance), L’Oreal (+4.5%, Q2 Organic Sales rose, seeing signs of Chinese recovery).


• The SMI is essentially flat with focus on heavyweight UBS (+1%) and Logitech (-0.3%). The former is marginally boosted after reporting better-than-expected Q2 metrics, with particular strength in NII. Elsewhere, Logitech beat Q2 estimates but margins fell 120bps Y/Y due to tariffs and promotions.

US Equity Futures: ES +0.1% NQ +0.1% RTY +0.3%

• Futures are modestly firmer across the board, ahead of a tinderbox of key events, including FOMC/BoC policy decisions, Mag 7 earnings and important US data.


• Key pre-market movers: Starbucks (+5%, revenue beat due to China strength, and as it progresses with its turnaround strategy), Visa (-2%, Q3 results beat estimates but the company kept its FY earnings outlook unchanged).


• The North American day sees the FOMC policy announcement, where rates are expected to remain unchanged, but there will be a lot of focus on the press conference; BoC policy announcement, and ahead of Friday's release of nonfarm payrolls, the ADP will publish its private payrolls gauge (expected to see +75k jobs added from the prior -33k; last time out, the median change in annual pay for job stayers eased to 4.4% from 4.5%, while for job changers it fell to 6.8% from 7.0%). US advance GDP stats for Q2 are also out in the premarket, where the consensus looks for growth of 2.4% (note: Atlanta Fed's GDPnow tracker for Q2 is tracking growth of +2.9%).

30 Jul 2025 - 10:25- EquitiesEU Research- Source: Newsquawk