EUROPEAN EQUITIES UPDATE: Stocks mixed, Luxury lifted after Hermes and Moncler results

STOXX 600: U/C

• European bourses began the session mostly lower, despite a stronger session in APAC trade overnight; though sentiment gradually improved as the morning progressed, to display a mixed picture thus far.


• The positive risk tone stems from US President Trump signing a memorandum to introduce a reciprocal tariff plan, but the delayed implementation has been received well by markets as it offers more room for negotiations.


• The EZ docket has been light thus far; focus will be on EU GDP Flash Estimates and Employment; ECB’s Panetta is also on the docket.


• Goldman Sachs raises STOXX 600 forecast for 12 months to 580 (prev. 540)

Sectors: Mixed

• European sectors are mixed, and aside from the top performer, the breadth of the market is fairly narrow.


• Basic Resources finds itself right at the top of the pile, lifted by gains in metals prices, given the positive risk tone in APAC trade overnight; particularly in China. Consumer Products follows behind, with the sector buoyed by strength in Luxury names after both Hermes and Moncler reported strong results.

Others: FTSE 100 -0.3%, CAC 40 +0.5%

• The FTSE 100 is on the backfoot and underperforming vs peers, currently flirting with 8,745 to the downside. NatWest (-1.7%) finds itself at the foot of the pile, despite reporting strong metrics; perhaps some focus is on the in-line FY25 adj. income guidance. Gambling names are amongst the winners today, with both Flutter (+4%) and Entain (+1.6%) benefiting in tandem with US peer DraftKings, which reported strong results and lifted its guidance. Mining names are also amongst the winners, given the positive risk tone in metals prices today. GS raised its 12m PT forecast to 9000 (prev. 8600).


• The CAC 40 has been swept off its feet, with sentiment lifted by post-earning strength in Hermes (+2.9%) – peers such as Kering (+1.3%) and LVMH (+1%) also gain. Delving into Hermes, Q4 results were strong, and lifted prices by 6-7% in Jan-Feb; it also noted that it is “very positive” about 2025. Elsewhere, Safran (+1%) gains a little after its FY results, where it beat on headline figures and raised guidance a touch.

US Equity Futures: ES U/C, NQ -0.1%, RTY +0.1%

• Futures are mixed, but ultimately trading on either side of the unchanged mark, taking a breather from the hefty upside seen in the prior session; sentiment on Thursday was lifted by US PPI (inner components which feed into PCE suggesting a lower outturn) and then the delayed implementation of Trump’s reciprocal tariffs.


• US Day Ahead: US import and export price data will help finalise analysts' views on what the PCE inflation report (the Fed's preferred gauge of inflation) will look like when it is released on February 28th. US retail sales are expected to decline by -0.1% M/M (see below for primer). Fed’s Logan is also due.

14 Feb 2025 - 10:00- Fixed IncomeData- Source: Newsquawk