EUROPEAN EQUITIES UPDATE: Stocks pare early morning losses; Stellantis sinks after CEO resigns

STOXX 600: U/C

• European bourses began the session entirely in the red, but quickly after the cash open most indices caught a bid.


• As it stands, there is a mixed picture in Europe; with the CAC 40 the clear underperformer (discussed below), whilst the likes of the SMI (+0.3%) and FTSE (U/C) faring better.


• Today has seen a slew of EZ Manufacturing PMIs, which were generally revised lower (EZ-wide figure unchanged). EZ-specific data docket ahead is light, so focus will lie on speak from ECB President Lagarde and then US ISM Manufacturing PMIs in the afternoon.

Sectors: Mixed

• European sectors opened with a strong negative bias, but sentiment has since improved to show a mixed picture in Europe.


• Basic Resources takes the top spot, despite losses in base metals prices; sentiment in the sector might be buoyed by better-than-expected Chinese NBS & Caixin Manufacturing PMIs.


• Autos is by far the clear underperformer, dragged down by losses in Stellantis after its CEO Tavares resigned.

European indices: CAC 40 -0.9%, IBEX 35 +0.3%, FTSE 100 U/C

• The CAC 40 is the worst performer in Europe, with sentiment in the region hit after French far-right figurehead Marine Le Pen said on Sunday that the government effectively "put an end to discussions" on the country's 2025 budget. Markets await Barnier’s social security budget and then the potential of a no-confidence vote thereafter. Full primer here.
  


• In terms of stock specifics out of the region, Stellantis (-8.5%) sank at the open and continued to dip after Stellantis' Board accepted Carlos Tavares' resignation as CEO, effective immediately, following criticism over the company's 2024 profit warning.


• Sticking with automakers, Volkswagen (-1.1%) is under modest pressure after German Union IG Metall said it began warning strikes on December 1st at all plants; the union added that if necessary, this will be the toughest collective bargaining battle Volkswagen has ever seen. Elsewhere, Ferrari (-0.8%) fails to benefit from a positive mention in Barron’s.


• Delivery Hero (-7.3%) slipped at the open after it moved to a employment-based model which would have a EUR 100mln impact on its adj. EBITDA for FY25.

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

• Futures are very modestly on the backfoot, giving back some of the gains seen in the prior session which saw the S&P notch its best month of the year.


• Analysts highlight that the past 10 times the S&P 500 was up 20% or more YTD heading into December, stocks continued higher 9 times; returning an average of 2.4% vs avg. Dec gain of 1.5%.


• Docket ahead is headlined by US ISM Manufacturing PMI where the consensus looks for the ISM's manufacturing gauge to rise to 47.5 in November from 46.5 in October. Elsewhere, US Construction spending is expected to have risen +0.2% M/M in October. On the speakers' slate, Fed's Waller (voter) will speak on the economic outlook at a Fed framework conference, while after the close, Fed's Williams (voter) will speak on the outlook.

02 Dec 2024 - 10:05- Fixed IncomeData- Source: Newsquawk