EUROPEAN EQUITY OPEN: European equities up after the open, on track for weekly gains; HL LN gets offer from CVC and Adia; G IM profits miss expectations; LXS GY sales decline; LHA GY's Discover Airlines reaches wage deal with Verdi

EUROPEAN OPEN: European equities begin the last trading day of the week with modest gains, with sentiment said to be supported by Thursday's US weekly jobless claims data, which soothed some fears about the near-term health of the world's largest economy. APAC stocks were higher overnight, helped by the rally on Wall Street, and as China's latest inflation data provided encouragement (see below), as well as earnings from its largest chipmaker SMIC, where Q2 results showed profits dropped sharply but beat expectations, and revenue climbed. On the week, futures of Europe's narrow Euro Stoxx 50 are on course for gains, but off the highs seen last week; the broader Stoxx 600 is also on course for gains, but is still lower than last week's ranges. In data, final German inflation data for July confirmed HICP at +0.5% M/M and 2.6% Y/Y (as expected), while national CPI was confirmed at +0.3% M/M and 2.3% Y/Y (as expected). In Norway, CPI rose 0.5% M/M in July (exp. 0.6%) and 2.8% Y/Y (exp. 2.8%), with the core rate rising +0.8% M/M (exp. 0.8%) and 3.3% Y/Y (exp. 3.3%). Ahead, today's docket is thin.

STOCK SPECIFICS: In financials, Hargreaves Lansdown (HL/ LN) announced a cash offer has been made by CVC and Adia, valuing it at GBP 5.44bln. Each shareholder will be entitled to receive GBP 11.40/shr (vs Thursday close of 10.77); also said FY revenue was GBP 764mln (exp. 767mln), and announced a dividend of 0.30/shr (exp. 0.478/shr). Generali (G IM) reported H1 profits that were below expectations, as natural disaters weighed, but its H1 operating profit was higher. In materials, Lanxess (LXS GY) sales declined in the latest quarter due to lower selling prices. In tech, Bechtle (BC8 GY) said business volume increased in Q2, but profits were lower. Of note for automakers, China industry association reported July vehicles sales -5.2% Y/Y (prev. -2.7%); January-July sales +4.4% (prev. +7.9%). NEV sales +2.7% Y/Y (prev. +30.1%), and were +31.1% YTD (prev. 32% Y/Y). For homebuilders, Bellway (BWY LN) announced 7.65k housing completions in the FY (prev. 10.95k), while housing revenue came in a little above forecasts.

TODAY'S AGENDA:

DAY AHEAD: The European slate is thin, with only Swiss consumer confidence and Italian trade data due. The North American day is also thin for scheduled data, with no major US releases on the docket. Canada will release July jobs numbers, where 22k jobs are expected to be added in the month, though the jobless rate is seen ticking up by one-tenth to 6.5%. There are no major central bank speakers due to make remarks today. In the afternoon, Baker Hughes will release weekly rig count data. On today's CRA slate, potential reviews by Moody's on Germany (currently Aaa), Fitch on the Netherlands (AAA), and S&P on Switzerland (AAA). On the corporate earnings front, numbers are due today from EVRG.

CHINA INFLATION: China reported consumer prices rose 0.5% M/M in July (exp. 0.3%, prev. -0.2%); that left the annual gauge at +0.5% Y/Y (exp. 0.3% prev. 0.2%). The rebound was a function of a smaller drag from food prices, where food inflation snapped a 12-month streak of negative inflation. ING said conditions were in place to see inflation trend a little higher in the coming months, but it should not impede further monetary easing. "With low inflation and weak credit activity, domestic factors continue to favour further monetary policy easing," the bank wrote, "we continue to look for at least one more rate cut this year with the potential for more if global rate cuts accelerate." 

09 Aug 2024 - 08:10- EquitiesData- Source: Newsquawk