EUROPEAN EQUITIES UPDATE: Stocks attempt to pare the September's subdued start

STOXX 600: +0.5%.

• European bourses opened in the green and have held an upward bias throughout the morning. Sentiment which is seemingly driven by a paring of the significant pressure seen on Tuesday, and as Google received a favourable judge ruling (see US section below).


• More broadly, newsflow has had little impact on price action. It is worth highlighting that US President Trump said on the tariff ruling that they're going to the Supreme Court Wednesday and need an early decision. On the next Fed Chair, Treasury Secretary Bessent is reportedly set to hold a “blitz” of interviews this Friday.


• Back to Europe, docket has had a number of Services/Composite PMIs (Final) to digest. Spain/Italy (slightly missed exp.), France (revised incrementally higher), Germany (revised lower and back into contractionary territory), EU (revised lower). The EU-wide figure highlighted that "cost pressures have increased and selling price inflation nudged slightly higher".


• On European fiscal policy; French Finance Minister Lombard urged for a compromise on the 2026 Budget and says the deficit reduction plan will inevitably be less ambitious if the government falls, according to FT. For the UK, the Government confirmed it will hold the Autumn Budget on November 26th.


• Now attention turns to the BoE TSC (Aug), where BoE's Bailey (Neutral), Lombardelli (Neutral), Greene (Hawkish) and Taylor (Dove) are to speak.

Sectors: Positive

• European sectors hold a slight positive bias, following on from a poor session on Tuesday.


• Tech takes the top spot, paring back some of the underperformance seen in the prior session as Google (+5.8% pre-market) helps to lift the mood within the sector (see US section for details). Consumer Products follows closely behind, with the Luxury sector building on the prior day’s gains, this time following a positive trading update from Watches of Switzerland (+7.6%). The Co. confirmed strong sales, affirmed its guidance and highlighted that it does not expect to be materially impacted by US tariffs in H1’26.


• Energy is found around the middle of the pile, after a broker upgrade & downgrade for the sector’s heavyweights. BP (+1.3%) benefits from an upgrade at Morgan Stanley, whilst the bank also downgraded Equinor (-1.1%). In a sectoral note, analysts highlighted that Upstream portfolios remain in “rude health”. MS added it remains cautious on the sector, with its views remaining heavily influenced by oil and gas prices.


• Insurance is found right at the foot of the pile, dragged lower by post-earning downside in Swiss Life (-1.2%); the co. reported lower H1 net profit. Sticking in Switzerland, pretty decent results via Helvetia (U/C) have failed to lift shares.

Others:

• Babcock (+1.5%); UK in advanced talks to build warships for Denmark and Sweden, FT reports. The discussions are reportedly focused on Type-31 frigates, which are primarily produced by Babcock.


• Adidas (+3%); upgraded to Buy from Hold at Jefferies; JP Morgan also reiterated Adidas with Overweight and placed it on Positive Catalyst Watch. Analysts highlight that the turbulent environment European Sporting Goods has faced this year, so favour those companies with larger market share.

US Equity Futures: ES +0.4%, NQ +0.5%, RTY -0.1%

• Futures are mixed at the moment, with outperformance in the NQ whilst the RTY lags a touch. The former benefits from pre-market strength in Google (+5.7%) whilst the RTY is hampered by the relatively higher yield environment.


• Honing in on Google, investors are cheering a judge order, which ruled that the Co. will not have to sell Chrome or Android in the monopoly case but must share search data with rivals and stop exclusive distribution contracts.


• The US Day sees the release of weekly MBA mortgage applications data. JOLTS job openings data for July is expected to slip to 7.378mln from 7.437mln (last time out, the vacancy rate fell to 4.4% from 4.6%, while the quits rate was unchanged at 2.0%). July factory orders are expected to fall by -1.4% M/M, while durable goods revisions are also due. Today's speakers' slate is busy; ahead of its blackout at the end of this week, we are expecting remarks from the Fed's Musalem (voter), and Fed's Kashkari (2026 voter). the Fed's Beige Book will also be published in later trade.

03 Sep 2025 - 09:55- ForexEU Research- Source: Newswires