EUROPEAN EQUITIES UPDATE: Sentiment continues to slip on Quad Witching Day; Banks hit by DBK GY

STOXX 600: -1.1%

• European bourses began the morning entirely in the red, and continued to proceed lower as the session progressed; as it stands, indices generally reside at worst levels. As a reminder, today is Quad Witching, so some volatility could be expected later in the day. 


• Docket today has been exceptionally quiet, and newsflow has been light. Ahead, EU Consumer Confidence in the afternoon, but US PCE and a few Fed speakers will likely take centre stage.

Sectors: Negative

• As it stands, all European sectors find themselves in the red; in-fitting with sentiment.


• Whilst still in the red, Real Estate fares the best vs peers, followed by Healthcare.


• Banks are by far the clear underperformer, weighed on by Deutsche Bank, which expects a Q4 EUR 300mln hit due to its Polish subsidiary litigation. Elsewhere, Credit Ag (-1.7%) dips after the Co. said its CET1 ratio will be impacted by 30bps, after it signed an agreement for the acquisition of Santander’s (+0.8%) 30.5% stake in Caceis; Santander, notes its own CET1 ratio will improve by around 10bps upon completion.

Majors: DAX 40 -1.4%, FTSE 100 -0.7%

• The DAX 40 is performing as poorly as peers; Deutsche Bank (-2.9%) is by far the clear underperformer in today’s session amid reports that the Co. expects a EUR 300mln hit in Q4 due to litigation over foreign currency loans at its Polish subsidiary. Deutsche Post (U/C) manages to hold afloat, with sentiment in postal names lifted following results from FedEx in the prior day. German Producer Prices earlier today printed above expectations, but unable to lift sentiment in the index.


• The FTSE 100 is on the backfoot, but ultimately faring better vs peers; though the index is set for its worst weekly decline of the year. Stock specifics for the index are light. For the UK more broadly, today’s Retail Sales metrics were poor, with headline M/M printing at 0.2% vs exp. 0.5%. On a more positive note, the ONS said "for the first time in three months there was a boost for food store sales, particularly supermarkets"; but this hasn’t quite been able to lift supermarket stocks.


• Danish-listed Zealand Pharma (-9.9%) sank at the open and continued to dip lower after the FDA concluded that Zealand Pharma’s application did not meet the full requirements for substantial evidence to establish the efficacy and safety of the to-be-marketed dose of glepaglutide.

US Equity Futures: ES -0.8%, NQ -1.2%, -1% RTY

• Futures are broadly in negative territory, following the glum mood seen in European trade.


• As for pre-market movers; FedEx (+8.7%) gains, despite a Q4 rev. miss but positivity stems from Co. plans to spin off its freight business. Elsewhere, Nike (-2.1%) dips, despite posting strong results but its guidance was light.


• US docket ahead includes; US PCE (expectations for M/M to rise 0.2%; Y/Y to rise 2.5%). Traders will also keep an eye out for commentary from Fed’s Daly, Williams and Hammack. The latter currently has no scheduled time, but is expected to explain her recent dissent.

20 Dec 2024 - 09:55- EquitiesEU Research- Source: Newsquawk