EUROPEAN EQUITIES UPDATE: Stocks flatline awaiting the US entrance as the clock ticks down to US CPI

Analysis details (10:03)

Equities are flat as catalysts remain light and traders look ahead to tomorrow’s US CPI figures. US equity futures trade without a firm direction, with a broad-based performance seen across the major contracts. More broadly, commentary from JPM’s Kolanovic is of note as he is calling for investors to modestly trim their stock allocations and switch to commodities. However, this is not an overt shift from the equity bull – as the shift from equities to commodities is to take advantage of recent pressure within commodities. As such, Kolanovic’s overweight recommendation for equities remains intact and they continue to see equities picking up through end-2022 amid robust earnings. Meanwhile, Morgan Stanley warns of a growing gap between negative EPS revisions and positive sales revisions, with “industrials and IT [posting] weak earnings relatively, while things look better for consumer discretionary, staples, energy, large-cap and value stocks”. Back to the session, bourses in Europe trade without a firm direction (Euro Stoxx 50 -0.2%; Stoxx 600 -0.2%) with the schedule once again thin. Sectors are mostly in the red with no overarching theme – Insurance, Banks, and Energy post modest gains whilst Travel & Leisure and Tech reside as the laggards at the time of writing. In terms of individual movers, IWG (-13%) is at the foot of the Stoxx 600  despite flagging strong demand as the firm said it will keep dividend payments frozen amid the continuing uncertainty. Continental (-1.2%) falls post-earnings after citing a turbulent market, although the firm remains optimistic on H2. Other earnings-related movers include abrdn (-2.2%), Legal & General (Unch.), IHG (-1.7%), Munich Re (+1.1%) and Dufry (+3.5%).

09 Aug 2022 - 10:02- Research Sheet- Source: Newsquawk