EUROPEAN EQUITIES UPDATE: Stocks on standby for the US jobs report; Amazon surges pre-market

Analysis details (10:02)

European equities have seen a choppy morning thus far with the region reluctant to commit (Euro Stoxx 50 -0.2%; Stoxx 600 +0.1%) ahead of the US labor market report. Sentiment in APAC was also mixed although the Chinese mainland was still observing its New Year closure. US equity futures have so far held onto a lion’s share of its post-Wall Street gains – triggered by Amazon’s after-earnings surge of around 14%. Amazon hold an 8% weight in the NDX and 4% weigh in the SPX. Back to European trade, futures and cash have been waning off best levels despite a distinct lack of news flow with bourses now mixed vs the modestly firmer cash open. UK’s FTSE 100 (+0.5%) outpaces its peers on the back of an impressive performance across the Energy sector as the Russia draws up contingency deals with China in the event of sanctions. Furthermore, the European Banking sector has been propped up by the recent string of hawkish central banks, with the German 5yr yield also topping 0% for the first time since 2018. Healthcare also resides among the current winners amid its defensive properties couple with upside in Sanofi (+0.7%) post-earnings. Overall, the sectors do not portray and overarching theme but have reconfigured since the cash open with the defensives making their way up the ranks. In terms of analyst commentary, Oddo strategists suggest European stocks are a buying opportunity for when inflation moderates amid a contraction in risk-premium, potentially higher growth, and the evasion of policy mistakes. “Sticking with this dynamic growth scenario will result in higher-than-expected EPS growth, which is by nature more favorable to sectors with a high-risk premium”, Oddo says. Back to the session, individual movers today largely consist of broader macro-driven action: with BP (+2.3%) and Shell (+3.7%) among the beneficiaries from the higher oil prices. Earnings-related movers include Intesa Sanpaolo (-1.3%), TomTom (-13%), and Enel (-0.7%).

04 Feb 2022 - 10:02- EquitiesResearch Sheet- Source: Newsquawk