EUROPEAN EQUITY OPEN: AAPL, AMZN lower after earnings; STAN LN, NWG LN top expectations; SHEL LN beats earnings, announces USD 3.5bln buyback; BAS GY flags uncertainty; EZ HICP, US jobs data ahead

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  EUROPEAN OPEN: European equities are starting Friday trade on the front foot, perhaps playing catch-up after the Labour Day absences on Thursday. The trade narrative has been constructive; the FT reports that the EU is prepared to offer EUR 50bln in increased US imports to address the trade deficit, offering some optimism that a deal can be struck between the US and EU, but officials remain cautious over high tariff demands in the ongoing negotiations. It follows news on Thursday that the US has reached out to China, seeking talks on Trump tariffs. Meanwhile, equities are holding up despite downside seen in AAPL and AMZN shares after the US close, where the former showed slowing China sales and tariff uncertainty, while the latter offered light guidance (see below). The highlight of today's data slate is the US jobs data for April (preview below).


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  STOCK SPECIFICS: Apple's (AAPL) shares fell 3.8% in extended trading, with its Q2 results showing continued China weakness, while investor concerns rose over vague tariff commentary; CEO flagged USD 900mln in potential June-quarter tariff costs but gave no visibility beyond, and the lack of forward guidance and economic uncertainty contributed to the post-earnings stock decline. Amazon's (AMZN) Q1 earnings beat expectations with strong retail and ad performance, though AWS growth slowed; Q2 guidance was light, citing tariff uncertainty and potential demand risks; Amazon's shares fell 3.2% in extended trading as investors reacted to cautious outlook and possible pricing impacts from trade policy tensions. In financials, Standard Chartered (STAN LN) Q1 pretax profit rose 10%, beating expectations, driven by strength in wealth, markets, and global banking; guidance for 2025 and 2026 was reaffirmed. NatWest (NWG LN) Q1 pretax profit topped expectations, driven by stronger margins, loan growth, and trading income; guidance was raised to the upper end of its FY25 range; additionally, the UK government's stake has now dropped below 2%, as the bank nears full privatisation. ING (INGA NA) Q1 net income slightly topped expectations, while NII was in line, though its CET1 fell; it announced a new EUR 2bln buyback following the completion of its previous programme. In energy, Shell (SHEL LN) reported Q1 adj. earnings of USD 5.58bln (exp. USD 4.96bln), and announced a new USD 3.5bln share buyback, matching its prior quarter, and marks the 14th straight quarter of USD 3bln+ in buybacks. Equinor (EQNR NO) agreed to sell its 60% operated stake in Brazil's Peregrino oil field to Prio for USD 3.5bln. In materials, BASF (BAS GY) Q1 EBITDA was in line with expectations, but slightly below last year; sales and margin also dipped modestly; FY guidance was reaffirmed, though management flagged high uncertainty due to evolving US and global tariffs. In industrials, Airbus (AIR FP) beat Q1 forecasts with strong defence-driven earnings and reaffirmed 2025 targets, but flagged rising engine delays and tariff risks; CEO urged a return to duty-free aerospace trade, warning tariffs threaten supply chains; added that deliveries are set to rise in H2 despite missed Q1 handovers. In notable broker updates, ASM International (ASM NA) was upgraded at HSBC; Sandoz (SDZ SW) was upgraded at RBC.

TODAY'S AGENDA:

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  DAY AHEAD: The highlight of the day is the US jobs data for April, where the pace of payrolls growth is seen cooling, though the jobless rate is expected to be unchanged (see below). In Europe, flash HICP inflation data for April is likely to see the headline fall to 2.1% Y/Y from 2.2%, while the core measure seen unchanged at 2.5%, and the super core rate is seen rising to 2.5% Y/Y from 2.4%. Final manufacturing PMI data are also due to be released from the bloc. Stateside, in addition to the jobs data, March factory orders and durable goods data are due. In the afternoon, Baker Hughes will release its weekly rig count. Today's US corporate earnings reporting slate includes CI, CVX, APO, ETN, XOM, TROW, CBOE. Afterhours, potential ratings actions include Moody’s on the ESM (currently AAA), and Moody’s on the EFSF (AAA).


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  PREVIEW - US NONFARM PAYROLLS (13:30BST/08:30EDT): The April payrolls headline is expected at 130k, a decline from March’s 228k, with the range of forecasts between 25-195k. The unemployment rate is anticipated to remain unchanged at 4.2% (range 4.1-4.3%), below the 2025 median Fed forecast of 4.4%. The report will be scrutinised to assess the impact of tariffs, with reciprocal tariffs implemented from April 2nd, and reduced rates announced from April 9th. Fed Chairman Powell has maintained a ‘wait-and-see approach,’ suggesting the Fed is well-positioned to wait for more clarity before altering its policy stance. Other officials, such as Governor Waller, have been dovish, while US President Trump has pressured the Fed to lower rates, criticising their pace of action. As the jobs report approaches, there are contrasting forces at play, with soft and hard data telling different stories. While business and household expectations have dropped, labour market indicators do not suggest a sharp break, although the latest ADP report was weak. JPM notes that weather may have boosted March employment but could dampen April figures.


• Click here for Newsquawk's full US nonfarm payrolls preview. 

02 May 2025 - 08:10- EquitiesData- Source: Newsquawk