
EUROPEAN EQUITY OPEN: NOVOB DC tops expectations; GSK LN announces buyback after Q4 beat; ACA FP, SAN SM top expectations; TTE FP raises dividend, maintains buybacks; EQNR supported by higher natgas; ECB wage tracker, ISM services, US ADP, Tsy QRA ahead
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EUROPEAN OPEN: European equities are opening on the defensive, with most indices lower amid a heavy earnings slate (including NOVOB DC, GSK LN, ACA FP, SAN SM, EQNR NO, TTE FP - see section below), and continuing US-China jitters after the USPS said it will be temporarily suspending parcels from China and HK. US tech is also under pressure after GOOG shares fell over 7% after earnings, while AMD sank by around 9% post earnings. Today's docket is busy, with further key US earnings (including DIS, UBER, QCOM, MSTR, ARM), final composite and services PMI data out of Europe, US ADP jobs numbers, the Treasury QRA; Europeans will also note the French no confidence vote today, though PM Bayrou's government is seen as safe). -
STOCK SPECIFICS: In tech, Alphabet's (GOOG) shares fell over 7% in extended trading after Q4 revenue missed expectations, as cloud growth slowed, while it also foresees capex in 2025 above expectations, driving investor concerns that AI spending may not drive sufficient returns amid rising competition. Advanced Micro Devices (AMD) shares tumbled by almost 9% in extended trading despite beating on Q4 earnings expectations, and noting strong AI-driven growth, as it missed data centre sales estimates. In healthcare, Novo Nordisk (NOVOB DC) Q4 revenue was above expectations, though Wegovy sales slightly missed forecasts; sees 2025 sales growth of 16-24% (vs +26% in FY24), as it faces drug shortages, competition, and pricing pressures in diabetes and obesity care. GSK (GSK LN) announced a GBP 2bln share buyback following better-than-expected Q4 profits. In financials, Credit Agricole (ACA FP) posted a +27% increase in Q4 income, surpassing analyst forecasts, driven by strong performance in its asset management and insurance division, which saw a 32% rise in revenue; FICC trading revenues were +17% Y/Y; proposed a FY25 dividend hike of +5% Y/Y), and elsewhere, it said that controlling Entity Rue La Boetie plans to purchase Credit Agricole shares on the market for up to EUR 500mln. Santander (SAN SM) reported a 14% increase in FY24 profits, while revenue rose +8%; the Spanish bank expects to return EUR 10bln to shareholders via buybacks in 2025-2026. Intesa Sanpaolo's (ISP IM) CEO said the bank has no interest in buying a stake in Generali (G IM). In energy, Equinor (EQNR NO) reported higher-than-expected Q4 earnings, driven by a surge in natgas prices in Europe. This performance reflects Europe’s record gas imports from Norway, replacing Russian supplies. It also raised its quarterly dividend, and announced a USD 5bln share buyback programme for 2025. TotalEnergies (TTE FP) raised its dividend and maintained quarterly share buybacks at USD 2bln, despite a drop in Q4 earnings due to weaker oil prices and refining margins; TTE said it will prioritise cash returns amid declining profits. In consumer sectors, Pandora (PNDRA DC) said it expects lower organic growth in 2025, and anticipates sluggish demand in Europe and slower growth in Germany, while China continues to be challenged. ; it launched a share buyback programme worth up to DKK 4bln. Of note for automakers, Nissan (NSANY) will suspend merger talks with Honda (HMC) after failing to agree on valuation terms under a holding company, according to Nikkei; Nissan will withdraw the December MOU, and rejected Honda’s proposal to become its subsidiary; note: Renault (RNO FP) holds a 17% stake in Nissan. In notable broker updates, STMicroelectronics (STM FP) was downgraded at SocGen; Generali (G IM) was downgraded at Goldman Sachs; Marks & Spencer (MKS LN) was downgraded at Jefferies; Schroders (SDR LN) was upgraded at RBC; Ferrari (RACE IM) was downgraded at Barclays; Richemont (CFR SW) was upgraded at Morgan Stanley.
TODAY'S AGENDA:
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DAY AHEAD: In Europe, final composite and services PMI data for January are due (Eurozone, Germany, France UK all seen unrevised). There will also be attention on the ECB's wage tracker data. Eurozone producer prices are expected to rise +0.5% M/M (prev. 1.6%), and at a rate of -0.1% Y/Y (prev. -1.2%). Poland's central bank is expected to leave rates unchanged at 5.75%. The US Day sees the release of ADP jobs data for January (expected at +150k vs the prior +122k); there will also be focus on the wages measure in December, the median change in annual pay for job-stayers eased to 4.6% from 4.8%, while for job-changers it eased to 7.1% from 7.2%; the data will provide the customary preview for Friday's official nonfarm payrolls data from the BLS (where the consensus currently expects headline payroll additions of 170k vs 256k in December; the jobless rate is seen unchanged at 4.1%, while average hourly earnings are seen easing to 3.8% Y/Y from 3.9%). The US Treasury will publish its Quarterly Refunding announcement, with a press conference following afterwards. Elsewhere, US international trade stats for December, ISM Services (54.3 expected vs the prior 54.0). On the speakers slate, Fed's Barkin (2027 voter), Fed's Goolsbee (2025), and Fed's Bowman (voter) are due to deliver remarks; the ECB's chief economist Lane is also due to speak. In energy, the DoE will release its weekly inventory data; for reference, API reported headline crude stocks built by +5.0mln bbls (exp. +2.0mln), Cushing stocks rose +0.1mln bbls, distillate drew down by -7.0mln bbls (exp. -1.5mln), while gasoline inventories saw a build of +5.4mln bbls (exp. +0.5mln). Notable corporate earnings due today include: BSX, EMR, DIS, UBER, JCI, FI, ITW, QCOM, MSTR, ARM, MCK, MET, ORLY, ALL.
05 Feb 2025 - 08:10- EquitiesData- Source: Newsquawk
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