EUROPEAN EQUITIES UPDATE: Mostly firmer but with trade tentative ahead of NFP

STOXX 600: +0.3%

• European bourses opened modestly firmer across the board, but dipped slightly off best levels in early-morning trade. Currently still displaying a positive picture in Europe, but are off best levels.


• On the trade front, US President Trump said he would be placing chip tariffs “very shortly,” which will be “fairly substantial”, but some (such as Apple) will be safe. Elsewhere, Trump is reportedly preparing to start North American trade deal renegotiations on the key US trade deal with Mexico and Canada, via WSJ.


• European docket has included a very poor German Industrial Orders print; the report highlights that this was “primarily attributable to the substantial decline (-38.6%) in new orders in the "manufacture of other transport equipment" sector (aircraft, ships, trains, military vehicles)”. Elsewhere, UK Retail Sales printed above expectations – both releases had a limited impact on futures at the time.

Sectors: Positive

• European sectors hold a positive bias, and with the breadth of the market to the downside fairly narrow.


• Basic Resources takes the top spot, buoyed by strength in underlying metals prices. Tech follows closely behind, with the sector boosted by a trifecta of factors; 1) strong Broadcom results, 2) broker upgrade for STMicroelectronics, 3) broker upgrade for ASML. On the latter, ASML was upgraded to Buy from Neutral at UBS and got a 13% boost to its PT. Analysts cite recent underperformance, and note that the "overhang" from China is well understood by investors. And finally, to complete the top three sectors; Safran (+1.5%) helps boost Industrials after the FT reported that the Co. is said to be mulling selling a "large portion" of aircraft interiors business for as much as EUR 1.5bln.


• Consumer Products is found at the foot of the pile, joined closely by Optimised Personal Care. Nothing really driving things for those sectors.

Majors:

• BMW (+0.3%) - CEO speaking on sales, said, "we are ahead of last year’s numbers as of August" and noted of growth particularly in Europe.


• Kering (+0.5%) - Francois-Henri Pinault will step down as CEO of Gucci owner Kering SA, handing control to Luca de Meo, a former automotive executive, on September 15th, Bloomberg reports.


• Orsted (+0.8%, initially opened lower) - Cuts midpoint FY25 adj. EBITDA DKK 24-27bln (prev. saw 25-28bln, exp. 26.07bln). Co. cites lower-than-normal offshore wind speeds during July and August; does not expect to impact Orsted's medium-term targets.

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

• Futures are ever so slightly firmer, as markets await the much-anticipated NFP report, employment data so far points to a weaker print today. An interesting point of concern is that this report will be overseen by a Trump appointee, as such, a strong report could raise credibility concerns across traders.


• In terms of pre-market movers; Broadcom’s shares rise 7% in pre-market trade after it issued Q4 revenue guidance above expectations, and announced a new large AI customer, while CEO Hock Tan confirmed he will remain in the role until at least 2030. Elsewhere, Lululemon shares plunge more than 17.5% in pre-market trade after the company issued full-year guidance well below expectations, citing a $240 million tariff impact and the removal of the de minimis exemption.


• Ahead, all focus will be on the US NFP report, which will help guide FOMC policy makers decisions ahead of this month’s meeting. The US economy is expected to add 75k nonfarm payrolls in August (vs July’s 73k), though revisions to prior months may draw attention. The unemployment rate is seen rising to 4.3% from 4.2%, below the year-end Fed median projection of 4.5%.

05 Sep 2025 - 09:50- EquitiesEU Research- Source: Newsquawk