EUROPEAN EQUITY OPEN: Stocks meander; geopolitics continues to be in focus

INDICES: At 08:13GMT,  Euro Stoxx 50 -0.19% at 3,856; FTSE 100 -0.24% at 7,449; DAX -0.07% at 14,263; CAC 40 -0.17% at 6,545; IBEX 35 -0.09% at 8,298; FTSE MIB +0.00% at 26,637; SMI -0.17% at 12,111.

OPEN: Shares opened modestly firmer, but shortly afterwards tilted flat/negative; the Stoxx50 narrow gauge of blue chips is currently set to close the week lower following two weeks of gains; the broader Stoxx 600 is also set for small losses, but has this week essentially meandered around last week’s highs. Today’s subdued action comes amid further focus on geopolitics and energy prices: President Biden has been warning Russia heavily during his European tour. There has been further commentary suggesting a more constructive tone of talks between Russia and Ukraine, although this does not appear to have triggered any meaningful risk-on. Amid a thin data docket, geopolitics will continue to influence trade directions on Friday as leaders continue their meetings. In terms of data releases, UK retail sales for February disappointed expectations, and combined with the softening of the Gfk gauge of consumer confidence for March, Pantheon Macroeconomics said “recession-level confidence bodes ill for retailers” ahead. Germany’s Ifo survey will be released about an hour after the open, and the consensus expects all three headline indices to ease back in March. Elsewhere, the data slate has US final Michigan consumer confidence, weekly Baker Hughes rig count data; in central bank speak, there will be more Fed officials, with the influential NY Fed President Williams to deliver remarks about challenges for the economic outlook (he is often considered one of the thought leaders on the Fed, so his comments are always noteworthy). Full Day Ahead here.

STOCK SPECIFICS: In corporate updates, Saipem (SPM IM) results showed net loss widening, to launch EUR 2bln cash call, but Board approves 2022-25 strategic plan; Renault (RNO FP) CEO said the year will be more difficult than previously expected; STMicroelectronics (STM FP) confirmed a quarterly dividend. In deal news, Diageo (DGE LN) to sell Windsor unit for GBP 124mln; BCP is reportedly looking sell 5.78mln LSE (LSEG LN) shares via bookbuild; of note for UK Retailers, Apollo reportedly lining up banks to fund a GBP 6bn buyout of Boots. In energy, Repsol (REP SM) is increasing fuel discounts for haulers; BP (BP/ LN) confirms investment in UK charging. In broker news, JPMorgan Chase has been reiterating Overweight views for UK housing names including Bellway (BWY LN), Berkeley Group (BKG LN), Persimmon (PSN LN), Redrow (RDW LN),Taylor Wimpey (TW/ LN); Bunzl (BNZL LN) downgraded at HSBC; Software AG (SOW GY) upgraded at Morgan Stanley. Of note for Apple (AAPL) suppliers, the tech giant is reportedly developing hardware subscription service for iPhones.

NOTABLE MOVERS:

• Telecom Italia (TIT IM) +5.6%: continued upside as KKR confirms interest.


• Daimler Trucks (DTG GY) +4.2%: Deutsche Bank raises PT.


• ABB (ABBN SW) +1.3%: Share buybacks.


• Next (NXT LN) +1.3%: SocGen upgrade.


• Taylor Wimpey (TW/ LN) -1.2%: JPM cuts PT.

Our full European equity briefings for March 25th can be accessed here and here.

25 Mar 2022 - 08:14- Fixed IncomeResearch Sheet- Source: Newsquawk