EUROPEAN EQUITIES UPDATE: Stocks move lower ahead of US-China talks, FTSE 100 bid post-jobs data

STOXX 600: -0.1%

• European bourses opened mixed and on either side of the unchanged mark; sentiment did gradually improve as the morning progressed, albeit marginally so. Thereafter, a bout of hefty pressure (similar to that seen across European equity futures BMO) took most European indices back into negative territory. No clear driver for the downside, but perhaps in anticipation of US-China talks resuming.


• UK aside, the docket has been very quiet so far. Some focus has been on ECB speak this morning; Villeroy said the Bank has successfully normalised policy but this does not mean it is static.


• Now focus will turn to US-China talks in London, where the two sides are expected to resume at 10:30 BST. On day one, Treasury Secretary Bessent said it was a “good meeting”. Thus far there seems to be some willingness from the US side to remove restrictions on some chip exports, in exchange for China’s rare earth exports. Though White House’s NEC Director Hassett did suggest that this would not likely include NVIDIA’s H20 chips.

Sectors: Mixed

• European sectors are mixed and with no clear theme or bias.


• Energy takes the top spot, following closely by Autos & Parts; the latter likely benefiting from the optimism surrounding the US-China talks.


• Financial Services sits at the foot of the pile, with the downside driven by losses in UBS (-6.6%), reversing some of the upside seen on Friday and as traders digest the latest government proposals which aim to force the bank to hold an extra USD 26bln in extra capital. Citi suggested that UBS should be able to manage the capital demands, whilst Deutsche Bank was a little more cautious, suggesting capital returns for 2026 are uncertain.


• Vaccine names are broadly lower today as traders react to the latest developments with regards to the US HHS. Director RFK Jr. who was fired members of the CDC vaccine advisory panel.

Others: FTSE 100 +0.3%, CAC 40 -0.2%, DAX 40 -0.7%

• The FTSE 100 outperforms today, largely thanks to the weaker GBP which has been pressured today following the weaker-than-expected jobs report; to recap, Payrolls Change fell more-than-expected (but there are some caveats due to timing effects) and the earnings metrics also cooled. Back to the index; UK homebuilders populate the top of the pile after Bellway (+5%) upped its revenue outlook. Elsewhere, Marks & Spencer (+3%) gains after its website showed it is now accepting online payments. Diageo (+1.8%) moves higher amid reports that it is mulling selling its stake in its Indian cricket team, reportedly valued up to USD 2bln. WPP (U/C) is unable to benefit from broader strength after it cut its global 2025 rev. growth forecast, citing trade concerns.

US Equity Futures: ES -0.1%, NQ -0.2%, RTY -0.3%

• Futures are modestly lower across the board, paring back some of the modest downside in the prior session.


• The US data slate is thin; NFIB's business optimism data for May and weekly Redbook. More focus will be on any potential readout from the US-China talks.


• Morgan Stanley writes that equities continue to remain resilient despite mixed macro data and a flurry of headlines. Analysts suggest that whilst they view a deterioration in data/earnings in the next few months, they believe it has already been priced in.

10 Jun 2025 - 09:55- EquitiesEU Research- Source: Newsquawk