EUROPEAN EQUITY OPEN: Stocks dragged lower with tech/growth under pressure after Netflix (NFLX) dissapointment

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  OPEN: Major equity indices opened in the red, taking cues from soft APAC and Wall St sessions, the latter seeing disappointing earnings from Netflix which dragged its shares lower by over 20% in afterhours trade. All sectors opened in the red, with losses led by Materials, Travel & Leisure, Autos; performing better, but still red are Food & Beverage, Health Care, Telecoms. Disappointing UK retail sales data today had little macro impact, and does nothing to shake the notion that the BoE will hike at its February confab.


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  INDICES: At 08:05GMT, Euro Stoxx 50 -1.3%, FTSE 100 -1.0%, DAX 40 -1.3%, CAC 40 -1.2%, FTSE MIB -1.4%, IBEX 35 -1.2%, SMI -0.9%.


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  NOTABLE MOVERS: Remy Cointreau (RCO FP) +1%, Restaurant Group (RTN LN) +1%, Beiersdorf (BEI GY) +0.9%, Playtech (PTEC LN) -11.8%, Siemens Energy (ENR GY) -5.3%, Stellantis (STLA IM/FP) -4.2%, BHP (BHP LN) -3.3%, Rio Tinto (RIO LN) -2.7%

COMMUNICATIONS:

• Of note for communications names: Netflix (NFLX) shares fell by over 20% in afterhours trade after its Q4 earnings report, where it provided soft guidance. Q4 2021 (USD): EPS 1.33 (exp. 0.82), Revenue 7.71bln (exp. 7.71bln). Q4 2021 Net Subscriber Additions: 8.28mln (exp. 8.38mln; company guided 8.5mln in October). Q4 FCF was negative USD 569mln. Sees Q1 EPS USD 2.86 (exp. 3.46). Sees Q1 Rev. USD 7.9bln (exp. 8.11bln). Sees Q1 Net Subscriber Additions 2.5mln (exp. 5.87mln). Executive said the streaming company didn't grow acquisition as fast as they would have liked, but noted that business was still healthy, retention was strong, and viewing was up.


• UK's Telegraph reports that BT (BT/A LN) is to increase prices +9.3% (CPI at 5.4% + a 3.9% addition); effective March 31st; TalkTalk (TALK LN) will increase prices +9.1%; Vodafone (VOD LN) +9.3%.


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  Schibsted (SCHB NO) upgraded to buy from hold at Nordea.

INDUSTRIALS:

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  Airbus (AIR FP) accused Qatar Airways of engineering the A350 grounding, and said it cancelled a separate Qatar order for 50 A321 jets, according to a court filing.


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  Siemens Gamesa (SGRE SM) Q1 revenue EUR 1.8bln (exp. EUR 2.2bln); cuts FY22 revenue guidance to -9% to -2% (prev. -7% to 2%). EBIT margin guidance cut to -4% to +1% (prev. +1% to +4%). Continues trying to pass on inflation to clients. Has not seriously considered spinning off their onshore business.


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  Altsom (ALO FP) is seeking to hire around 7.5k employees globally this year.


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  Bureau Veritas (BVI FP) downgraded to neutral from outperform at Exane BNP.


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  MTU Aero Engines (MTX GY) reiterated with overweight at Jpmorgan Chase.


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  Rentokil (RTO LN) upgraded to buy from hold at Berenberg.


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  Siemens (SIE GY) upgraded to buy from hold at SocGen.

MATERIALS:

• Serbia halts Rio Tinto (RIO LN) USD 2.4bln lithium project following demands from environmental groups.

ENERGY:

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  Shell (RDSA LN) reportedly agrees to supply Pemex's Deer Park refinery for at least 15 years.


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  Siemens Energy (ENR GY) prelim. Q1 revenue EUR 6.0bln (prev. EUR 6.5bln Y/Y). Adj. EBITA EUR -63mln (prev. EUR +366mln). Cuts outlook for FY comparable revenue development, now sees between -2% to -3% (prev. -1% to +3%), and EBITA margin now seen between +2% to +4% (prev. +3% to +5%).

CONSUMER CYCLICAL:

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  JKO Play has pulled a possible offer for Playtech (PTEC LN), according to the FT, over concerns that an APAC investor group would block the deal.


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  Restaurant Group (RTN LN) now expects group FY21 adj. EBITDA to be at the top end of range.


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  Auto1 (AG1 GY) agrees to coordinate any potential future share sales; no indication of an imminent sale.


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  Intercontinental Hotels (IHG LN) upgraded to neutral from underperform at Exane BNP.

CONSUMER STAPLES:

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  Remy Cointreau (RCO FP) upgraded to buy from hold at HSBC.

HEALTH CARE:

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  UCB (UCB BB) announced positive top-line results from the Phase 3 study evaluating the efficacy and safety of BIMZELX.


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  UCB (UCB BB) initiated with outperform at Cowen.


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  Philips (PHIA NA) downgraded to hold from buy at ING.


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  GN Store Nord (GN DC) upgraded to buy from neutral at Goldman Sachs.


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  Siemens Healthineers (SHL GY) resumed with buy at Goldman Sachs.

TECH:

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  Bechtle (BC8 GY) initiated with outperform at Exane BNP.

FINANCIALS:

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  Generali (G IM) downgraded to hold from buy at SocGen.

REAL ESTATE:

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  UK Housing Secretary threatened to block major developers from attaining planning permission if they do not create a cladding compensation fund, Telegraph reported.

DAY AHEAD FRI JANUARY 21ST:

• 07:00GMT/02:00EST: Turkey Consumer Confidence (Jan)


• 07:00GMT/02:00EST: UK Retail Sales (Dec)


• 11:30GMT/06:30EST: India FX Reserves (14/Jan)


• 12:30GMT/07:30EST: ECB President Lagarde


• 13:00GMT/08:00EST: BoE's Mann


• 13:30GMT/08:30EST: CA Retail Sales (Nov)


• 13:30GMT/08:30EST: CA New Housing Price Index (Dec)


• 13:30GMT/08:30EST: CA Wholesale Sales Flash (Dec)


• 15:00GMT/10:00EST: US Leading Index (Dec)


• 15:00GMT/10:00EST: EZ Consumer Confidence Flash (Jan)


• 18:00GMT/13:00EST: US Baker Hughes Rig Count (21/Jan)

21 Jan 2022 - 08:08- EnergyData- Source: Newsquawk