EUROPEAN EQUITY OPEN: Constructive open amid industrial and consumer earnings; ECB speak ahead

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  OVERNIGHT: On Wall Street, stocks clawed back initial weakness in wake of retail sales data, which added further evidence to signs of a hot economy, and the Russell and the Nasdaq led the rebound, while SPX and DJIA closed with slight gains (see here). Asia-Pac stocks were positive as the region followed suit to the gains in the US (see here).


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  EUROPEAN OPEN: The positive mood from overnight trading has continued into Europe, where stocks have begun the Thursday session on the front foot. Once again, there have been a few notable earnings updates, particularly in consumer and industrial sectors. In industrials, Airbus (AIR FP) announced it was delaying its A320 production target, but is targeting 720 total deliveries in 2023, while it also named former Covestro exec as new CFO. Deutsche Lufthansa (LHA GY) said all systems were back up after Wednesday's IT fault. Schneider Electric (SU FP) sales and profits above expectations in FY22, names new CEO, splits Chair/CEO roles. In staples, Nestle (NESN SW) FY22 profits miss expectations despite price hikes, but it confirmed 2025 targets, sees robust growth ahead, and said that continued pricing action was required to repair the damage caused by inflation. Renault (RNO FP) swings back to losses after Russia exit, but FY outlook tops expectations, and it offers a dividend. Pernod Ricard (RI FP) H1 sales better than expected, confident in FY23 recovery. Elsewhere, in the financials sector, Standard Chartered (STAN LN) profits rose 28%, it upgraded its outlook and set a USD 1bln size for its share buybacks; exec said it has not engaged nor solicited any takeover bids. Commerzbank (CBK GY) net profits rise 12%, topping expectations, and it sees 2023 profits well above 2022 levels. Credit Suisse (CSGN SW) is reportedly exiting distressed-debt trading with an asset sale. Ahead, there is ECB commentary and a few North American data releases, whilst EM-focussed traders will be on the lookout for the ECJ's provisional opinion on Poland's CHF-denominated mortgages.

DAY AHEAD:

• Our live day ahead calendar can be accessed here; a PDF version can be accessed here.


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  EUROPEAN DATA/SPEAKERS: ECJ's provisional opinion on Poland's CHF-denominated mortgages is due; we have a primer available here. There is no major data points scheduled for release, although there are a few key speakers from European central banks: The ECB’s Chief Economist Lane will be speaking to the NIES in London, and there will be a text release. ECB Vice President de Guindos will give remarks at Colegio Mayor CEU, but there will not be a text release. Elsewhere, ECB’s Panetta, Nagel and Makhlouf will speak again. From the BoE, Chief Economist Pill will be speaking at a think tank event.


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  NORTH AMERICAN DATA/SPEAKERS: There are a few notable items on the data calendar: the pre-market economic releases will see the release of PPI data for January, which follows the CPI report earlier in the week which alluded to sticky inflation conditions. January Housing Starts and Building Permits is on the docket; weekly initial jobless claims and continuing claims data are expected to be little changed; the Philly Fed business survey will be eyed after a mixed Empire Fed release on Wednesday (our analysis for the NY Fed data is here). There is also a decent amount of Fedspeak today: Fed’s Bullard (non-voter), Cook (voter), and Mester (non-voter) are due to speak; the BoC Deputy Governor Beaudry will deliver some remarks after the market close.


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  ENERGY: EIA NatGas storage change data for the week of 10/Feb is expected to show a draw of 109BCF (prev. -217BCF).


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  SUPPLY: Spain will auction between EUR 5.5-6.5bln of 2027, 2029 and 2032 Bonos; France will auction between EUR 10-11.5bln of 2026, 2028, and 2030 OATs; it will also auction between EUR 1.25-1.75bln of 2029 linker, 2032 linker, and a 2038 linker. Meanwhile, the US Treasury will sell USD 9bln in 30yr TIPS.

STOCK SPECIFIC NEWS:

• Our full equity specific briefings for February 16th can be accessed here and here.


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  COMMUNICATIONS: Vodafone (VOD LN) is reportedly exploring options for African business Vodacom. Relx (REL LN) reports rise in earnings and sees strong growth ahead, announced changes to board and committee roles. Orange (ORA FP) Q4 metrics meet expectations, sets new 2025 targets.


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  CONSUMER DISCRETIONARY: Renault (RNO FP) swings back to losses after Russia exit, but FY outlook tops expectations, and it offers a dividend. Stellantis (STLA) recalls 340k RAM trucks to replace an electrical connector after reports of six fires. Lagardere (MMB FP) sales adj EBIT above expectations. Hella (HLE GY) EBIT, sales miss expectations, but said it expects record sales and improved profitability in 2023. Faurecia (EO FP) and Cummins (CMI) enter exclusive negotiations on potential sale of a designated part of Faurecia’s exhaust business in Europe and US.


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  CONSUMER STAPLES: Nestle (NESN SW) FY22 profits miss expectations despite price hikes; confirmed 2025 targets and sees robust growth ahead; said continued pricing action was required to repair the damage caused by inflation. Heineken (HEIA NA) notes FEMSA announcement on the outcome of its strategic review; FEMSA to divest its full shareholding in Heineken and representatives will be resigning from the board with immediate effect. Pernod Ricard (RI FP) H1 sales better than expectation, confident in FY23 recovery.


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  ENERGY: Repsol (REP SM) profits top expectations on high O&G prices, proposes share capital reduction of 50mln shares.


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  FINANCIALS: Standard Chartered (STAN LN) profits rose 28%, upgraded its outlook and set a USD 1bln size for its share buybacks; exec said it has not had engaged nor solicited any takeover bids. Commerzbank (CBK GY) net profits rise 12%, topping expectations, and it sees 2023 profits well above 2022 levels. Credit Suisse (CSGN SW) is reportedly exiting distressed-debt trading with an asset sale. NN Group (NN NA) profits miss expectations, announced new EUR 250mln buyback, CEO to be reappointed.


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  HEALTH CARE: Indivior (INDV LN) Q4 sales top expectations, EPS in line. Valneva (VLS FP) FY22 sales above expectations, but FY23 guide soft. Grifols (GRF SM) upgraded at Barclays. GSK (GSK LN) saw Positive Phase III results for RSV older adult vaccine candidate.


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  INDUSTRIALS: Airbus (AIR FP) delays A320 production target, but is targeting 720 total deliveries in 2023, named former Covestro exec as new CFO. Atos (ATO FP) is entering the next phase of discussions with Airbus (AIR FP) to form a long-term strategic partnership. Deutsche Lufthansa (LHA GY) said all systems were back up after Wednesday's IT fault. Schneider Electric (SU FP) sales and profits above expectations in FY22, names new CEO, splits Chair/CEO roles. Vinci (DG FP) passenger traffic +65.8% Y/Y. Umicore (UMI BB) FY earnings in line, sees lower profits in 2023. ADP (ADP FP) FY22 profits come in above expectations after recovery in traffic levels; Jan passenger traffic +71.1% Y/Y. Ipsos (IPS FP) FY22 sales in line, sees FY23 organic growth, is confident in targets. Norwegian Air (NAS NO) reports a loss in Q4, but sees strong demand ahead.


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  MATERIALS: Holcim (HOLN SW) to acquire Fdt Flachdach Technolgie, and added that Holcim's roofing systems will exceed USD 4bln in net sales ahead of schedule. Rio Tinto (RIO LN) and Marubeni (8002 JT) partner on creating stronger supply chains. Air Liquide (AI FP) FY22 sales a little short, operating profits ahead of expectations, plans clean energy projects ahead. Volcan confirms Glencore (GLEN LN) is exploring a sale of its 23% stake in Volcan.


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  REAL ESTATE: Klepierre (LI FP) sales and profits top expectations.


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  TECH: Rexel (RXL FP) sales and operating income were better than expected in 2022.


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  UTILITIES: Centrica (CNA LN) FY22 profit triples, will extend share buybacks. Edison (EDNR IM) sales and EBITDA jump, net profits slip.

16 Feb 2023 - 08:10- Fixed IncomeData- Source: Newsquawk