EUROPEAN EQUITIES UPDATE: Indices move lower as sentiment wanes, Kering -4.5% after poor Q1 sales

STOXX 600: -0.8%

• European bourses opened with modest losses, but sentiment gradually deteriorated as the morning progressed, to display a clear negative bias.


• The downbeat sentiment comes after a session of gains in the prior session and as trade uncertainty takes focus once again. On that, US President Trump said it depends on China how soon tariffs can come down and they have spoken to 90 countries regarding tariffs already. Though he added that if they don't have a deal, they will set tariffs and could set the tariff for China over the next two or three weeks.


• More recently, Chinese Officials have suggested that China and the US are not yet in trade talks – pushing back on Trump’s remarks that there is daily direct contact between US and China.


• The European docket today has included the German Ifo survey, which marginally topped expectations; little move was seen in the equities complex following the release. Focus now turns to ECB’s Lane, Nagel, Rehn and Simkus.

Sectors: Negative

• European sectors opened mixed but now display a bit more of a negative picture.


• Real Estate takes the top spot, alongside strength in Energy; although upside is very modest.


• Tech is the clear underperformer today, given the risk-tone and as traders digest the latest earnings from Dassault Systemes, which slumped after downgrading its 2025 margin outlook. The banking sector is pressured by post-earnings losses in BNP Paribas, whilst the Luxury sector is hit after poor Kering results (all discussed in detail below); a broker downgrade for LVMH at HSBC is also not helping sentiment.

Others: FTSE 100 -0.2%, CAC 40 -0.8%, SMI -0.2%

• The FTSE 100 is slightly lower, but ultimately faring a little better vs peers. There were a slew of earnings from within the index today; Unilever (+0.7%) benefits after the Co. reported better than expected underlying sales growth. Elsewhere, Anglo American (-1.5%) moves lower after it reported lower Q1 copper output.


• The CAC 40 is the European underperformer today, largely thanks to a number of post-earning losses in the likes of Dassault Systemes (-7.5%, missed Q1 targets and cuts 2025 margin outlook), BNP Paribas (-3%, lower Op. Income), EssilorLuxottica (-3.5%, in-line metrics but North American rev. was light), Kering (-5.9%, reported 14% decline in Q1 sales and very poor Gucci metrics). As for the gainers; Renault (+1.2%, in-line metrics and confirmed outlook), STMicroelectronics (+3%, Q1 results in-line, Q2 guidance topped).


• The SMI is modestly lower after two heavyweights trade negatively after posting their Q1 results; Roche (-0.5%) reported better-than-expected results and affirmed its outlook. Elsewhere, Nestle (-0.6%) beat on its Organic Revenue figure and highlighted CHF 0.7bln in cost savings for 2025.

US Equity Futures: ES -0.5%, NQ -0.7%, RTY -0.5%

• Futures are entirely in the red, in-fitting with the broader risk tone; the NQ lags, with sentiment in the Tech sector hit after IBM (-8% pre-market) results.


• IBM beat on its headline metrics and maintained its 2025 guidance; weakness stems from the Co. saying 15 government contracts will be impacted due to the DOGE cost cuts.


• The US docket ahead is relatively thin; focus will be on US durable goods and weekly jobless claims. Fed speak today comes via Kashkari.


• Earnings: Alphabet, Intel, American Airlines, Freeport, Southwest Airlines, PepsiCo, Dow Chemical, Merck, Valero, PG&E, T-Mobile.

24 Apr 2025 - 10:20- ForexEU Research- Source: Newsquawk