EUROPEAN EQUITIES UPDATE: Stocks at session highs, Tech leads post-AAPL, Novartis +3% after-earnings

STOXX 600: +0.5%

• European bourses opened modestly firmer and continued to edge higher as the session progressed, with indices generally near highs.


• A turnaround in futures began around the time the WSJ posted an article which suggested that the US administration could announce new tariffs by Saturday, but with a grace period to allow for negotiations (the grace period was not initially touted).


• In terms of EZ day so far; German Retail Sales (exceptionally weak), French CPI (below exp.), German Unemployment (generally in-line), German State CPIs (cooler than the nationwide expectations indicate); the latter sparked some upside in indices (detailed in the DAX 40 section below). Aside from data, the ECB SCE Survey sees inflation in next 12 months at 2.8% vs exp. 2.7%. Overnight, it was reported that the ECB may drop its "restrictive" label on the rate stance as soon as March, according to Bloomberg citing sources.

Sectors: Positive

• European sectors opened mixed but now hold a strong positive bias.


• Tech is the outperformer today, with sentiment in the sector lifted by post-earning strength in Apple, which is higher by around 3% in US pre-market trade; ASML (+2.5%), BE Semi (+2%). The sector in Europe has seemingly shrugged off the negative sentiment in Asia; SK Hynix (-9%) sank at the open, in its first reaction to the DeepSeek AI; Samsung (-2%) edges lower after providing a pessimistic view for the current quarter, but its headline metrics were strong.


• Healthcare takes the second spot, lifted by post-earning strength in Novartis (+3.3%); the co. beat on headline metrics and noted that op. income would grow by a "high single to low double-digit" percentage.

Others: FTSE 100 +0.5%, DAX 40 +0.2%

• The FTSE 100 is modestly firmer, with gains in-fitting with peers. Smiths (+10.8%) is by far the clear outperformer in today’s session after it provided a strategic update, where it increased its share buyback programme to GBP 500mln and said Smith Interconnect will be divested.


• The DAX 40 is marginally in the green, and is underperforming vs peers. Stock specific newsflow has been relatively light for the index today; SAP (+0.2%) fails to benefit from blockbuster earnings from software-peer Atlassian (+19% pre-market). For the country more broadly, a cooler set of German State CPI metrics vs the implied forecasts for the mainland figure has sparked some dovish price action across European assets; the DAX 40 edged a little higher on the data.

US Equity Futures: ES +0.2%, NQ +0.6%, RTY -0.1%

• Futures are mixed, with the RTY marginally in the negative territory whilst the tech-heavy NQ outperforms following results from Apple and Intel.


• Apple's (AAPL) shares rose 3% afterhours following results, where Q1 revenue rose 4%, but iPhone sales missed expectations, and China sales fell; Mac and iPad sales improved, while wearables declined. The strong growth in its services segment supported its rise afterhours.


• Intel (INTC) shares rose 3.7% in extended trade after it reported better-than-expected Q4 earnings, though it issued weak guidance, citing seasonality and competition.


• The highlight of the US day is the personal income and spending data for December, which also includes the PCE and core PCE metrics for December. Employment costs for Q4 are also due, where the headline is seen at 0.9% from the prior 0.8%. Fed Governor Bowman (voter) will deliver remarks on the economy and banks.

31 Jan 2025 - 10:05- EquitiesData- Source: Newsquawk