EUROPEAN EQUITIES UPDATE: Softer trade whilst US markets take a breather from the Trump trade

STOXX 600: -0.8%

• European bourses opened on very weak footing and continued to trundle lower as the morning progressed.


• In recent trade, the sentiment has picked up a touch, with indices now sitting just above worst levels.


• On the macro front; commentary from ECB’s Holzmann and Rehn said little to shift the dial for European indices; Holzmann took notice of the potential inflationary pressures of Trump tariffs.

Sectors: Negative; Top: Tech, Energy Bottom: Basic Resources, Consumer Products

• European sectors hold a strong negative bias.


• Tech takes the top spot, lifted by post-earning strength in Infineon, despite reporting weak results and cutting guidance.


• China-exposed sectors such as Basic Resources and Consumer Products are found at the foot of the pile, weighed on by the glum mood in China overnight.

DAX 40: -0.8%

• A softer session for the index thus far and posting losses to a similar degree as European peers. Currently trading around 19,300, and just ahead of its 50 DMA at 19,107. On the macro front, German ZEW Sentiment slipped from the prior and printed below expectations; the institute said "economic expectations for Germany have been overshadowed by Trump's victory and the collapse of the German coalition"


• In terms of individual movers; Siemens Energy (+2.5%) tops the pile after securing a USD 1.3bln wind turbine order. Infineon (+4.1%) gains, after initially opening in the red despite the Co. reporting a miss on headline metrics. The Co. also cut its Q1’25 revenue guidance and noted that the Co. is preparing for a subdued business performance in 2025. Bernstein maintained its “Outperform” rating on the Co.


• Looking at the index’s losers; Bayer (-11.7%) is bottom of the index after the Co. reported weak results across the board and lowered its FY adj. EBITDA view. Elsewhere, Brenntag (-9.4%) sank at the open, after its results were significantly weaker than the prior year.

FTSE 100 -0.7%

• Posting losses to a similar degree as peers; the index is now at lows not seen since Aug 8th. The early morning data docket included the UK’s jobs report which showed sticky wages metrics, whilst the unemployment rate continued to tick higher. Elsewhere, BoE's Pill kept his hawkish tone, noting that there is "still some work to be done on underlying domestic inflation pressure in the UK."


• The top of the pile includes; ConvaTec (+19.5%), which gains after reporting a very strong earnings report and upgraded FY24 guidance. AstraZeneca (U/C) remains afloat after its results, which by in-large were strong and after it upgraded its 2024 guidance.


• The bottom of the index includes; Fresnillo (-6.2%), which slips after it noted that its Sabinas Mine is facing operational difficulties which is impacting silver production. More broadly, the sector does still populate the bottom of the index, given the glum mood in China overnight, which weighed on metals prices; Anglo American (-2.5%), Glencore (-2%). Elsewhere, Vodafone (-4.1%) dips on its H1 results, which were generally in-line.

US Equity Futures: ES -0.1%, NQ -0.1%, RTY -0.4%

• Futures are entirely in the red, with very modest underperformance in the RTY, in a slight paring to the hefty Trump-induced gains seen in the prior session. The Trump trade remains on the table. However, the likes of Tesla (+2.7% pre-market), Trump Media (-4.5%) and Bitcoin (-0.8%) have paused for breath. Updates overnight via Decision Desk HQ noted projects Republicans have won enough seats to remain in control of the House.


• The data docket is void of any Tier 1 data, with only the US NY Fed SCE due. The speaker slate will be a bit more interesting, as four Fed members are scheduled today; Fed’s Waller, Barkin, Kashkari & Harker.

12 Nov 2024 - 10:20- Fixed IncomeData- Source: Newsquawk