EUROPEAN EQUITIES UPDATE: Stocks take a tumble after dismal EZ PMI metrics

STOXX 600: U/C

• European bourses began the session entirely in the green, but sank into negative territory following the release of the French, German and then the EZ-wide PMI figures which continued to fuel anxiety related to growth within the region.


• French PMI metrics were exceptionally poor, printing below the most pessimistic analyst expectations; German figures thereafter also depicted a poor outlook for the region, with Services surprisingly falling into contractionary territory. The EZ-wide figures confirmed the dire outlook within the region, which spurred another leg lower in the equities complex.


• The EZ wide PMI release noted that “The environment in November is stagflationary. On one hand, activity is declining across the board, while on the other, input and output prices are rising more quickly."

Sectors: Mixed

• European sectors opened with a strong positive bias, but following the PMI figures sectors are now mixed and display a slight defensive bias.


• Healthcare takes the top spot alongside Utilities, benefiting from the risk-off sentiment whilst Real Estate benefits from the relatively low yield environment, given the strength in the fixed income complex; as such Banks are the considerable laggard.

European Indicies FTSE 100 +0.4%, DAX 40 -0.3%, AEX +0.3%

• The FTSE 100 is one of the better performers in Europe, with most of the index in positive territory. There is no clear theme or bias and little by way of clear outperformers. JD Sports (-0.6%) edges lower after being downgraded to Neutral from Overweight at JPMorgan; the Co. also received a considerable PT cut to 105p from 171p. The region's PMI release saw the Composite/Manufacturing surprisingly dip into contractionary territory, but this had little impact on the index.


• The AEX was the best performer in Europe, with chip heavyweight ASML (+0.9%) topping the pile which had benefited from initial positive sentiment; but following the PMIs, ASML has given back most of its early gains.


• In terms of individual movers, Grifols (+1.8%) benefits on reports that Brookfield is looking at increasing its offer for the Co., via Expansion. Thales (-5.7%) slips as the Co. faces a bribery investigation.

US Equity Futures: ES -0.2%, NQ -0.4%, RTY -0.5%

• Futures are lower across the board in tandem with the dip in sentiment seen in Europe following the region's poor PMI figures.


• US day ahead; the US PMIs are expected to show small rises in both manufacturing and services). Elsewhere, final University of Michigan sentiment data for November is expected to see the headline revised up to 73.7 from 73.0.

22 Nov 2024 - 10:05- EquitiesData- Source: Newsquawk