EUROPEAN EQUITIES UPDATE: Stocks in Europe mixed ahead of ECB, SMI leads post-SNB

EQUITIES

STOXX 600: U/C

• European bourses began the European session entirely in the green, albeit modestly so.


• As the morning progressed, some indices slipped into negative territory to display a slightly more mixed picture in Europe.


• The data-docket in Europe has been very light, and will continue to remain so for the remainder of the day. Focus will ultimately be on the ECB; expectations are for a 25bps Deposit rate cut, lowering it to 3.00%. The meeting comes amid uncertainty regarding Eurozone growth. While a 25bps cut is expected, some had hoped for a larger 50bps reduction due to ongoing growth concerns.

Sectors: Negative

• European sectors began the session with a strong positive bias, but in a turn of fortunes now display a mostly negative picture.


• Autos & Parts parks itself in the top spot, with gains in the sector seemingly broad-based. Volkswagen (+0.4%) is fairly unmoved on reports that Volkswagen has offered a 14% wage hike over four years to Tennessee factory workers. Energy and Basic Resources are buoyed by strength in underlying commodity prices. Luxury names are generally on a firmer footing in today’s session after Brunello Cuccinelli upped its rev. forecast.


• Retail is the clear underperformer, continuing the pressure seen in the prior session; Inditex (-2.4%) continues to slip lower after posting poor 9m results in the prior session.

Others: FTSE 100 +0.2%, FTSE MIB +0.3%, SMI +0.4%

• The FTSE 100 is on marginally firmer footing; mining names generally populate the top of the index, given the upside in metals prices in today’s session thus far – energy names are also buoyed by strength in underlying oil prices; Glencore (+1%), BP (+1%). Associated British Foods (-2.7%) sits at the foot of the pile as it enters its ex-dividend date. Outside of the FTSE 100, and more broadly for recruiters; SThree (-23.8%) sank at the open after it gave a profit warning citing macro uncertainty; larger peers such as Hays (-4%) also slips.


• The FTSE MIB is one of the best-performing indexes in Europe thus far; luxury-name Brunello Cucinelli (+6.5%) is by far the clear outperformer, after the Co. lifted its forecasts, projecting 11-12% rev. growth. Elsewhere, tyre-maker Pirelli (+2.2%) gains after amid reports that Camfin plans to increase his stake in the co. Finally, Prysmian (-0.9%) sits at the foot of the index after news that AGCM is investigating possible anti-competitive arrangements in the Italian Cable market.


• The SMI is the best-performing index in Europe today, with the index jumping to highs following the SNB's decision to deliver a surprise 50bps cut. The accompanying release noted that the Bank "also remains willing to be active in the foreign exchange market as necessary". At the presser, Chairman Schlegel said "the likelihood of negative interest rates has become small".

US Equity Futures: ES -0.2%, NQ -0.3%, RTY -0.2%

• Futures are very modestly on the backfoot, with the NQ paring back some of the hefty gains seen in the prior session.


• The US Day sees the releases of weekly jobless claims data, where initial claims are seen paring to 220k from 224k, while continuing claims are seen rising to 1.875mln from 1.871mln. After yesterday's in-line CPI data from the US, the PPI report for November is due, and the consensus looks for the headline rate to rise to 2.6% Y/Y from 2.4%, while the core measure is seen rising to 3.2% Y/Y from 3.1%.

12 Dec 2024 - 10:00- EquitiesData- Source: Newsquawk