EUROPEAN EQUITIES UPDATE: Stocks clamber off lows with newsflow light and US PPI ahead

STOXX 600: +0.3%

• Modest losses were seen across all European bourses at the open following a similar APAC handover, although regional indices then clambered off lows with the European picture now mostly but modestly positive.


• Macro updates have been light since the European close yesterday, with traders looking ahead to the US PPI today (albeit somewhat outdated given the US' blanket tariffs on steel and aluminium), whilst European traders keep an eye on the German fiscal reform that will be debated in the Bundestag today from 11:00GMT - poised to last some three hours. Ahead of this, a German Green Party official said there is no progress in talks with CDU/CSU and SPD on debt plans, via an RTL interview.

Sectors: Mostly higher

• European sectors opened mostly lower with a mild defensive tilt amid the cautious risk tone, albeit then turned into a mostly positive picture and less of a defensive bias.


• Top performing sectors include Telecoms, Healthcare, Insurance, Food Beverages & Tobacco.


• Underperforming sectors include: Autos & Parts, Industrial Goods & Services, and Travel & Leisure.


• Autos & Parts resides as the marked underperformed with losses to a greater magnitude vs sectoral peers- potentially resuming losses on the back of looming US auto tariffs - BMW (-1.0%) will reportedly absorb new 25% US tariffs on certain Mexican-built models until May 1st.


• Note, some desks attribute losses in the Autos sector to the Environmental Protection Agency yesterday starting efforts to reverse the Biden administration’s vehicle emissions rules that would force automakers to build a rising number of electric vehicles, although this is arguably a bullish force for the auto sector (fewer rules for legacy automakers and less saturated market for EV makers; albeit negative for EV parts makers).

Movers:

• UK's FTSE 100 sees homebuilding towards the foot of the index after UK RICS Housing Survey for Feb fell to a six-month low (11.0 vs. Exp. 20.0; Prev. 22.0, Rev. 21). RICS Chief Economist said the slowdown could be linked to inflation pressures/geopolitical uncertainty. Though added that "looking beyond the next few months, sales activity is seen as likely to resume an upward trend with prices also moving higher".


• In consumer sectors Hugo Boss (-5.7%) slips post earnings with the CEO also guiding Q1 sales below the FY guidance range. AB InBev (-0.6%) meanwhile denied reports that Co's Budweiser is to cut thousands of jobs as it seeks to reduce costs by 15%, via Bloomberg - jobs cuts were attributed to dwindling demand in China.


• In financials, Deutsche Bank (+0.1%) sees increased revenue across all four main business units for 2025; the CEO said it was focused on meeting ambitious profit and cost targets in 2025. Generali (+0.3%) reported an 8.2% increase in 2024 operating profit, driven by better-than-expected growth in premiums across all its units. However, its net profit for the year edged slightly lower; on an adjusted basis, net profit grew 5.4%.


• In materials, JPMorgan disclosed that it holds a 5.36% stake in Rio Tinto (-0.3%) on behalf of clients; separately, Rio and Edify Energy signed a landmark solar and battery agreement for Rio Tinto’s Gladstone operation.


• In notable broker updates, BNP Paribas downgraded Puma (+2.0%) and Valeo (-3.2%); Jefferies initiated Leonardo (+2.2%) with Buy Rating, and Hensoldt (-2.5%) with an Underperform; Julius Baer (+1.2%) was initiated with Buy Rating at Goldman Sachs; Novo Nordisk (+3.5%) was upgraded at Kepler.

US Equity Futures: ES -0.5%, NQ -0.7%, YM -0.3%, RTY -0.4%

• US equity futures are softer across the board with losses to a slightly greater magnitude vs European peers, amid the economic implications of a potential trade war coupled with woes surrounding a US government shutdown after US Senate Democratic Leader Schumer said Senate Republicans do not have the votes to approve the House-passed government spending bill without amendments.


• Yesterday, post-CPI, the White House Press Secretary said the CPI report is welcome news, and the Trump administration is focused on driving down costs; White House Economic Adviser Hassett said he expects US GDP growth to be 2.0%-2.5% in Q1, according to a Fox News interview.


• The US Day features PPI data for February, which follows cooler-than-expected CPI data for the month released on Wednesday; the street expects headline PPI to ease to 3.3% Y/Y from 3.5%, while the core rate is seen falling to 3.5% Y/Y from 3.6%. Weekly US initial jobless claims are seen a touch higher at 225k from 221k while continuing claims are seen inching up to 1.9mln from 1.897mln (neither of these coincides with the BLS survey window for the March jobs data). Traders will also be watching for the US quarterly services survey, which could impact Q4 GDP figures.

13 Mar 2025 - 10:00- EquitiesData- Source: Newsquawk