EUROPEAN EQUITIES UPDATE: Indices under pressure, VOW3 GY & MC FP both reverse losses now +4%

STOXX 600: -0.4%

• European bourses opened lower across the board, continuing the downbeat mood seen in the APAC session. Downside, which extended in the morning, but more recently, a slight bounce has been seen across a few major indices such as the Euro Stoxx 50 and STOXX 600.


• No clear macro driver for the risk tone today, but perhaps markets are losing some steam after a couple of days of gains, stemming from trade optimism. As a reminder, the US and Japan secured a trade deal, and reports have suggested that the EU will secure a similar package of 15%.


• Docket today included a softer-than-expected UK Retail Sales report (no move in FTSE 100 futures) and then the German Ifo survey, which was marginally lower than expected. Schedule ahead is void of any EZ-specific events, so attention turns to the US (details below).

Sectors: Negative

• European sectors hold a strong negative bias, with only a couple of industries staying afloat.


• Autos were initially the underperformer, but then flicked into the green as Volkswagen pared initial losses, as traders fully digested the co’s results (details below). Though it's not all good for the sector, with Traton firmly in the red after it slashed its 2025 outlook amid US tariff uncertainty.


• Elsewhere, Healthcare takes the second spot whilst Banks manage to meander around the unchanged mark; Deutsche Bank was downgraded at Citi, but Banks seem to be benefiting from the higher yield environment and also following positive NatWest earnings. The UK bank reported a H1 beat, raised guidance and boosted its share buyback.


• Financial Services is the underperformer today, hampered by post-earnings losses in Deutsche Boerse (-2.5%).

Others: DAX 40 -0.7%, CAC 40 -0.4%

• The DAX 40 underperforms today, with sentiment in the index initially hit by poor Volkswagen results, with focus also on retailers such as Adidas. Starting with Volkswagen (+4%), the co. was initially dragged lower as traders reacted to poor headline metrics and a cut to Op. Margin guidance for FY25. Optimism may stem from comments of good demand, which is expected to continue in H2’25. Adidas (-2%) has been dragged down by significant post-earnings pressure in Puma (-18%); the Co. cut its FY outlook, and now expects a loss in adj. EBIT terms, citing weak demand and tariff concerns.


• The CAC 40 is posting modest losses, but is faring a little better vs peers. In terms of key movers, Carrefour (+5.4%) tops the pile after the co. reported better than expected metrics. Elsewhere, LVMH (+4.5%) has pared initial losses; the luxury bell-weather continued to see its Sales decline, more than expected; CFO commentary was a little more upbeat, where they noted that the co. saw some incremental improvement in China last quarter. Elsewhere, tyre-maker Michelin (-1.5%) moves lower after reporting softer-than-expected metrics across the board, though the Co. did maintain guidance.

US Equity Futures: ES U/C, NQ -0.1%, RTY +0.1%

• Futures are mixed but ultimately trading on either side of the unchanged mark; the RTY is back on a firmer footing today, and incrementally outperforms after a session of losses in the prior session.


• The US docket features durable goods data for June (exp. +0.1% M/M from +0.5% previously). The Atlanta Fed GDPnow tracker for Q2 will be updated (currently tracking growth of 2.4%).

25 Jul 2025 - 09:55- EquitiesEU Research- Source: Newsquawk