EUROPEAN EQUITIES UPDATE: Mixed trade in Europe ahead of US jobs

STOXX 600: +0.2%

• Overall, relatively mixed performance thus far from Europe following a flat open amidst a lack of fresh pertinent catalysts and in the run-up to the US jobs report later today which will help shape expectations for near-term Fed policy.


• On the week, futures of the broad Stoxx 600 are on course to book a third consecutive week of gains, and the narrower Euro Stoxx 50 future is primed to snap a seven-week run of losses.

Sectors: Mixed

• Sectors are mixed with no clear bias or theme, with the breadth of the market narrow at the open before gradually widening.


• Autos take the top spot with a BMW (+1.4%) helping drive the gains after a broker upgrade at Jefferies.


• Consumer Products and Services lifted by L'Oreal (+1.7%) amid read-across from Ulta Beauty (ULTA), whose shares rose 12.2% after topping EPS, Revenue, and Comp sales expectations.


• On the flip side, Basic Resources are subdued despite a mostly firmer picture across base metals, with Antofagasta (-1.0%) lower after Antofagasta and Jiangxi Copper agreed to significantly lower copper concentrate processing fees for 2025 in a sign of concerns about sufficient availability of copper concentrate in the spot market next year.

European Indices: DAX 40 +0.3%, FTSE 100 -0.1%, CAC 40 +1.1%

• In terms of majors, CAC 40 narrowly outperforms in the aftermath of the French political developments as President Macron looks to name a new PM within days, with French Banks once again seeing a strong performance. Furthermore, luxury stocks see upside amid a possible China play in the run-up to the Chinese Central Economic Work Conference next week.


• In M&A, Direct Line (+7.2%) confirmed it has reached a prelim agreement with Aviva (-0.3%) on a potential deal; the offer is for GBP 2.75/shr, representing a 16.5% premium to Thursday's close, Bloomberg reports


• In materials, Holcim (-1.4%) is progressing on the planned full capital market separation of its North American business, planned by way of a 100% spin-off to be listed on the New York Stock Exchange; the planned spin-off is subject to shareholder approval at its AGM in May 2025, and is expected to occur by the end of the H1 2025.


• In notable broker updates, Swiss Re (-0.3%) was upgraded at Morgan Stanley, Schindler Holding (-1.7%) was downgraded at JPMorgan Chase, Scor (+2.9%) was upgraded at Morgan Stanley, Hannover Re (+0.2%) was upgraded at Morgan Stanley.

US Equity Futures: ES U/C, NQ U/C, YM U/C, RTY -0.2%

• Flat trade across the board but with a mild downward bias in the RTY in a continuation of its recent underperformance, with traders awaiting the latest US jobs report.


• 
  [Full Newsquawk preview available on the website] November's NFP report is expected to show 200k jobs added (analyst expectations range from 155-275k), a rebound from October's distorted figure of 12k, impacted by hurricanes and Boeing strikes. Many have suggested that around 100k of the October losses will be readded in the November 'normalisation'. The Unemployment Rate is forecast to rise slightly to 4.2% (prev. 4.1%; range of forecasts is between 4.0-4.3%), still below the Fed’s September projection of 4.4%. Wage growth is expected to cool, rising by 0.3% M/M, with an annual rate of growth easing to 3.9% Y/Y from 4.0%.


• Data aside and ahead of the Fed blackout window, which kicks in on December 7th (policy meeting is on December 18th), remarks are due from the Fed Governor Bowman, Fed's Goolsbee (2025 voter), Fed's Hammack (2025 voter), and the Fed's Daly (2024 voter).

06 Dec 2024 - 09:50- EquitiesResearch Sheet- Source: Newsquawk