EUROPEAN EQUITIES UPDATE: Stocks tread water after the Trump-Musk spat and ahead of NFP

STOXX 600: U/C

• Flat/lower trade across Europe following the fallout of the dramatic Trump-Musk spat, but with traders setting their sights on the US jobs report due 13:30 BST/08:30 EDT (more below).


• Overnight, APAC stocks were mixed following a subdued handover from Wall Street, where the online spat between US President Trump and Tesla CEO Elon Musk overshadowed the recent call between President Trump and Chinese President Xi in which the leaders agreed to start a new round of talks.


• On the week, futures of the broad Stoxx 600 and Euro Stoxx 50 indices are currently poised for a second week of gains, though not by much at this stage, and will depend on how the aforementioned data comes in.


• Following the ECB's rate cut on Thursday, there have been several ECB speakers commenting after hours on Thursday and in Friday's early trade (Simkus said rates were now at neutral; Kazaks said markets should not expect cuts at every meeting; Villeroy said the ECB has won the battle against inflation in Europe; Muller said the rate-cutting cycle is probably almost finished).


• On the data front, numbers out of Germany showed the trade surplus narrowing to EUR 14.6bln (exp. 20.0bln, prev. 21.1bln), with exports -1.7% M/M (exp. -0.7%) and imports +3.9% M/M (exp. +0.5%). German industrial output, meanwhile, fell by -1.4% M/M in April (exp. -1.0%). ING said the data on exports and industrial production show a strong reversal of the previous frontloading effects, but the bank remains hopeful for a cyclical rebound. In the UK, Halifax said the annual rate of house price growth slowed to +2.5% Y/Y in May (prev. +3.2% in April).

Sectors: Mixed

• Sectors display a mixed picture with the breadth of the market also narrow, with no real bias.


• Top gainers at the time of writing include Health Care (+0.6%), Energy (+0.5%), and Real Estate (+0.5%); losers include Autos and Parts (-0.5%), Basic Resources (-0.4%) and Tech (-0.2%).

Stock Specifics:

• HSBC (+0.3%) chairman Mark Tucker will step down on September 30th after nearly eight years, to become non-executive chairman of AIA Group; Brendan Nelson will serve as interim chairman.


• Adidas (-1.3%), JD Sports (-0.5%), and Puma (-1.6%) are all slipping after US apparel maker Lululemon (LULU) saw its shares tumble by over 20% in extended trading; despite a small beat on the top- and bottom-lines in Q1, Q2 guidance missed expectations, and it cut its FY view.


• Airbus (-0.9%) confirmed that it delivered 51 jets in May (-4% Y/Y), with 243 aircraft delivered so far YTD (-5% Y/Y); it reported no new orders in May, and has sold 291 aircraft since January, with a net total of 215 after cancellations; Airbus was downgraded at Citigroup.

US Equity Futures: -ES +0.4%, NQ +0.4%, YM +0.1%, RTY +0.6%

• Firmer intraday and rebounding following yesterday's Trump-Musk-induced downside as traders await the latest US jobs report.


• The consensus currently expects 130k nonfarm payrolls to be added to the US economy in May (vs 177k in April; the 3-month average currently stands at 155k, 6-month at 193k, and the 12-month at 157k). There will also be some attention on the government payrolls figure (which previously showed gains of +10k); some suggest that the Federal job loss figures may tick up as severance periods end regarding public sector layoffs. The unemployment rate is seen unchanged at 4.2% (note: the Fedʼs March projections forecast unemployment would rise to 4.4% this year). Average hourly earnings are expected to rise by +0.3% M/M, picking up in pace from the +0.2% M/M reported in April. The annual rate is expected to ease to 3.7% Y/Y (from 3.8%). NOTE: The Bureau of Labor Statistics will correct minor errors in April 2025 jobs data on June 6th, related to weights from a redesigned Current Population Survey sample; the corrections will not impact key metrics such as the unemployment rate.


• Elsewhere, Tesla shares are rebounding pre-market (+4.8%) after slumping some 14.3% yesterday, with traders attributing the bounce to Politico reports that White House aides scheduled a call with Elon Musk.


• Broadcom (-3.3%) shares are falling in the pre-market despite strong results; reports suggested that the downside was likely due to profit-taking following a 78% rally since April, as markets may have priced in much of the AI-driven growth, while investor expectations around the name are high, and accordingly, guidance may have disappointed.

06 Jun 2025 - 09:45- EquitiesData- Source: Newsquawk