EUROPEAN EQUITIES UPDATE: Stocks tumble post-FOMC, MU -15% pre-market weighing on chip peers in Europe

STOXX 600: -1.1%

• European bourses began the session entirely in the red and have generally traversed worst levels throughout the morning, as traders react to the hawkish cut at the Fed which sparked considerable pressure in US stocks on Wednesday.


• Delving deeper into the decision, the FOMC delivered a 25bps reduction, but with hawkish factors such as; a lone dissenter (Hammack opting for unchanged), the median dot plot lifted above expectations and Fed Chair Powell noting that the decision was a “closer call”.

Sectors: Negative

• European sectors are entirely in the red, with sentiment hit following the hawkish Fed decision.


• While in the red, Optimised Personal Care fares better than peers, with Autos taking the second spot.


• Technology is by far the clear underperformer today, with sentiment across chip-makers hit after Micron’s guidance disappointed; ASML (-3.1%), ASM International (-2.5%) both dip.

Majors: DAX -0.9%, FTSE 100 -1.2%, CAC 40 -1.2%

• The DAX 40 has been swept away by the broader slump in sentiment; Volkswagen (+1%) is one of the few stocks in the green amid reports that the Co. and unions are still in open-ended negotiations; but the report highlights that there is no guarantee that negotiations will result in a deal. Infineon (-3.1%) is pressured by the very poor results posted by Micron in the prior day.


• The FTSE 100 is on the backfoot and positing gain in-line with peers, ahead of the BoE later today, which is widely expected to be a non-event; the Bank is set to deliver a hold.


• Of note for Alcohol names, India Antitrust Body raids regional offices of liquor companies such as Pernod Ricard (U/C) and AB InBev (-1.7%), via Reuters citing sources; investigation into concerns of price collusion with some retailers in India.

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

• Futures are very modestly in positive territory, in the aftermath of the hawkish cut, delivered by the Fed, which sent the S&P 500 tumbling by around 3%.


• In terms of pre-market movers; Micron (-15.5%) sank after the Co. generally matched expectations, but its H2 guidance was exceptionally weak. Nonetheless, analysts at Goldman Sachs reiterated its Buy rating on the Co., but cut its PT to USD 128 (prev. USD 145). Elsewhere, Tesla (+2.5%) edges a little higher after dipping 8.3% in the prior day.

19 Dec 2024 - 10:10- EquitiesResearch Sheet- Source: Newsquawk