EUROPEAN EQUITIES UPDATE: Mostly positive trade but UK trades sideways ahead of Lagarde and Powell

STOXX 600: +0.3%

• European bourses began the European session mostly in positive territory, and continued to climb higher as the morning progressed; the FTSE 100 has missed out on the gains, and has traded mostly sideways throughout the morning.


• Today’s Final PMI metrics across Europe were mixed; Italy surprisingly fell into contractionary territory, Germany was revised a touch lower, whilst France saw modest revisions higher. The EZ-wide figure saw incremental revisions higher. Overall the metrics had little impact on price action.


• EZ-specific data docket is thin, so focus will be on ECB's Lagarde and then a busy US schedule.

Sectors: Positive

• European sectors hold a slight positive vs initially opening almost entirely in the green.


• Autos takes the top spot, alongside Retail and Tech. Seemingly beneficiaries of the risk-on mood seen in Europe today. Tech is also buoyed after chip-maker ASM International noted that despite the US export controls, it still expects its results to be largely in-line with previous assumptions; this echoes similar commentary from ASML.


• Healthcare sits at the bottom of the sector list, weighed on by AstraZeneca after it received a price target cut at HSBC. Basic Resources sectors gives back some of the prior day’s strength, in tandem with today's broader pullback in metals prices.

European Indices: DAX 40 +0.9%, FTSE 100 -0.3%, CAC 40 +0.4%

• The FTSE 100 is on the back foot and underperforming vs European peers; heavyweights AstraZeneca (-1.9%) and GSK (-0.9%) seem to be taking the lion’s share of the losses, with the former hit with a PT cut at HSBC. For the index more broadly, mining names are generally lower given the weakness in metals prices in today’s session. Legal & General (+3.9%) tops the pile after the Co. provided a positive update on its Institutional Retirement division. More broadly for the UK, BoE Governor Bailey said he sees four 25bps cuts in 2025, though this sparked larger moves in the Pound/Gilts rather than in the index. The Final UK PMI metrics were revised ever so slightly higher, again resulting in little move for the index.


• The DAX 40 is on a firmer footing and currently trades around the 20,175 mark. Index-specific headlines have been light; SAP (+0.8%) is incrementally firmer, potentially garnering support from US-peer Salesforce which soars in the pre-market after its results topped analyst expectations. More broadly for Germany, Bundesbank President Nagel said the German economy faces a weak outlook and 2025 is likely to be another year of weak growth.


• The CAC 40 is slightly firmer but not quite performing as well as peers such as the DAX 40 or FTSE MIB. In terms of individual movers, Kering (+1.5%) gains after the Co. approved a EUR 2/shr interim dividend for 2024. Elsewhere, Pernod Ricard (U/C) is unmoved today despite reports that an internal probe found the Indian execs violated New Delhi laws; some optimism may stem from a broker upgrade at Deutsche Bank. Ahead, traders will remain laser-focused on the no-confidence vote against PM Barnier at 15:00 GMT (full preview available on Newsquawk).

US Equity Futures: ES +0.2% NQ +0.5% RTY +0.1%

• Futures are trading on a firmer footing, taking impetus from a mostly positive session in Europe; the NQ is the marginal outperformer so far.


• In terms of pre-market movers, Salesforce (+10%) soars after Q3 results were strong and maintained a positive outlook for Q4 and 2025. Elsewhere, Marvell (+12.9%) jumps after it topped Q3 earnings expectations, with strong AI demand driving a 19% sequential increase in revenue.


• The US Day sees the release of the ADP national employment data for November, where 150k jobs are expected to be added to the economy (prev. 233k). The headline for the ISM services PMI is expected to ease to 55.5 from 56.0.

04 Dec 2024 - 10:20- EquitiesData- Source: Newsquawk