EUROPEAN EQUITIES UPDATE: Sentiment boosted by stunning earnings from META & MSFT, into US PCE

STOXX 600: +0.4%

• European bourses are higher across the board with a slew of mostly positive earnings from within Europe, and with significant post-earning strength in Meta and Microsoft also boosting sentiment.


• European docket has been a busy one today; German Import Prices (higher than expected), Unemployment Rate (incrementally lower, and Unemployment Change figure fell more than most pessimistic of expectations), German State CPIs (M/M generally in-line , though Y/Y metrics a little more mixed – in relation to the nationwide expectations, which is due at 13:00 BST), French CPI (generally higher than expected).


• On the trade front, South Korea struck a deal with the US; the latter is to impose a 15% levy on the Republic of Korea and will make USD 350bln in investments in the US.


• Attention now turns to CPI data points from Italy, the EZ Unemployment Rate, German nationwide inflation and a slew of US data (more on that in the US section below).

Sectors: Mixed

• European sectors are mixed, and with a fairly wide breadth of the market.


• Banks take the top spot, with several European banking reporting today; including from the likes of BBVA (+8%, Bottom line beat), SocGen (+7%, lifts annual targets), Credit Ag (U/C, broadly in-line), Mediobanca (-0.2%, in-line), ING (-0.3%, missed on NII, expects impact following sale of Russian business).


• Industrials have also been buoyed following key results from within the sector; Airbus (-0.6%, Q2 metrics beat but provided cautious commentary on meeting 2025 delivery target), Safran (+4.6%, Revenue beat and upped its rev. growth outlook for FY), Rolls Royce (+9%, soars after raising profit guidance).


• Basic Resources is found right at the foot of the pile, pressured by the significant losses seen in copper prices in the prior session. As a reminder, this comes after US President Trump imposed a 50% tariff on copper pipes and wiring but exempted refined metals. Also at play is some post-earning pressure in Anglo American (-3%) after it took a rev. hit amid Trump tariffs and cut its dividend.


• Elsewhere, Travel & Leisure is also found towards the foot of the pile, pressured by post-earning losses in Lufthansa (-0.3%); the Co. reported a top-line miss in Q2 but did highlight demand for US remains strong.

Key movers:

• St James’s Place (STJ LN) +8.0%: Announces buyback, strong earnings.


• Shell (SHEL LN) +2.7%: Q2 profit a strong beat, announces USD 3.5bln share buyback.


• Unilever (ULVR LN) +0.3%: Q2 metrics a little light, confirmed guidance but sees H2 growth ahead of H1.


• Sanofi (SAN FP) -2%: Mixed Q2 metrics, beating on Net Sales whilst Business EPS was light.


• BMW (BMW GY) -0.5%: Mixed Q2 figures missing on Revenue & EBIT Margin for Autos; co. confirmed its outlook.


• Haleon (HLN LN) -4.3%: Says consumer environment in North America to remain subdued


• Just Group (JUST LN) +69.0%: Brookfield wealth agreed to acquire the company for GBP 2.2/shr.

US Equity Futures: ES +1%, NQ +1.4%, RTY -0.1%

• Futures are mixed, with clear outperformance in the NQ following stunning earnings from Meta and Microsoft, which are both higher by 11% and 9% respectively, in pre-market trade.


• Briefly recapping those earnings; Meta’s Q2 EPS and revenue beat expectations, and the company guided above for Q3; management said strong ad performance allows it to ramp up 2025 AI investments, calling it a key moment to accelerate spend. As for Microsoft, the Co. is to reach a USD 4tln market cap after beating quarterly expectations, driven by strong cloud growth and record AI infrastructure spending of over USD 30bln this quarter.


• The US Day features the PCE inflation data, along with personal income and spending. On the labour market front, Challenger layoffs data for July are due ahead of Friday's nonfarm payrolls reports. Weekly initial jobless claims data (for the 26/July week) are expected to rise to 224k from 217k, and continuing claims (for 19/Jul week) are seen unchanged at 1.955mln. Meanwhile, employment costs data for Q2 are expected to ease to 0.8% Q/Q from 0.9% prior. After today's data, the Atlanta Fed will update its GDPnow tracking estimate for Q2, which is currently modelling growth of 2.9%.

31 Jul 2025 - 10:00- EquitiesData- Source: Newsquawk