EUROPEAN EQUITY OPEN: Stocks open lower amid heavy corporate earnings slate

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  OVERNIGHT: On Wall Street, the cash equity day was defined by downside in regional bank First Republic (FRC) along with soft economic data, leading to a risk-off session. However, afterhours, a decent earnings report from PacWest Bancorp (PACW) saw its shares surgdee over 13%, while the KRE regional banking index and XLF financial sector index both rose in afterhours. Big Tech may have also been supporting sentiment after top- and bottom-line beats for Microsoft (MSFT) and Alphabet (GOOG). Our US Market Wrap can be accessed here. APAC stocks were mostly lower after the losses on Wall Street, although US equity futures found some reprieve overnight from the big tech earnings. In Australia, participants digested somewhat mixed inflation data, where headline CPI topped forecasts in Q1, but all other components were softer than expected, and supported the view that the economy had passed peak inflation. China shares were mixed with early weakness in tech after US Republican senators urged for US government measures to address Chinese cloud companies including placing sanctions on Huawei Cloud and adding Alibaba Cloud to the export control list. Our APAC wrap can be accessed here.


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  EUROPEAN OPEN: Stocks start the European day lower amid a heavy corporate earnings slate, which we recap on below. On the data front, German GfK Consumer Sentiment rose to -25.7 in May (exp. -27.9, prev. -29.3). The US Day will continue to keep earnings in focus, with updates due from TMO, BSX, HUM, ADP, AMT, GD, BA, META, NOW, PXD, while investors will continue to monitor the health of the banking system. For Scandie watchers, the Riksbank is due to make a policy announcement this morning, where +50bps is the consensus view.


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  STOCK SPECIFICS: In financials, Standard Chartered (STAN LN) earnings topped expectations, with higher interest rates providing support. In staples, Carrefour (CA FP) sales rose, and sees more profit growth this year despite inflation pressures; Danone (BN FP) price hikes supported Q1 metrics, and it lifts FY23 guidance; Reckitt Benckiser (RKT LN) saw quarterly LFL revenue growth of 8%, names Kris Licht new CEO. In cyclicals, Kering (KER FP) sales rose slightly in the quarter, lagging its competitors in the luxury space; Puma SE (PUM GY) profits slipped, and it warned about headwinds which could weigh on profits further, but it maintained guidance. Saab AB (SSAB SS) reiterated its guidance after Q1 orders and earnings topped expectations. In industrials, Safran (SAF FP) sales rose in the quarter, but it maintains its outlook; Vinci (DG FP) saw sales rise in the quarter. In health care, Roche (ROG SW) Sales fell in the quarter as Covid business waned; GSK (GSK LN) sees operating profit growth lower in H1. In energy, Iberdrola (IBE SM) said its 2023-25 plan was progressing ahead of schedule. Our full equity briefings can be accessed here and here.

DAY AHEAD:

• Our full interactive calendar can be accessed here; a pdf version can be accessed here.


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  EUROPEAN DATA/SPEAKERS: Sweden’s Riksbank is expected to lift rates by 50bps at its policy meeting today given stubbornly elevated inflation, the relative resilience of the domestic economy and unwinding of 'desirable' SEK appreciation; but the economy's sensitivity to rate increases and the recent easing in headline inflation are among factors which might merit a discussion around a +25bps move; our preview can be accessed here.  From the UK, CBI Distributive Trades Are expected to fall to 0 in April, from 1 in March. ECB vice President de Guindos will address the Delphi Economic Forum. On the supply front, Germany will auction EUR 2.50bln of 2037 and 2038 debt.


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  NORTH AMERICAN DATA/SPEAKERS: On the data slate, we have weekly MBA mortgage applications data for the week of 21st April. US durable goods order are seen rising 0.7% M/M in March after a 1.0% decline in February. The US advanced goods trade balance is also due for release in the premarket. On the supply front, the Treasury will sell USD 24bln of 2yr FRNs, and USD 43bln of 5yr notes.


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  US CORPORATE EARNINGS: Highlights on today’s US corporate earnings slate includes TMO, BA, META (see here for expectations). It is a very busy week for corporate earnings; major companies reporting includes: AZN, LLY, CAT, MRK, BMY, CMCSA, SPGI, ABBV, MA, AMZN, AMGN, INTC, TMUS on Thursday; CVX, XOM on Friday. Our full weekly earnings expectations note can be accessed here.


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  ENERGY: Ahead of today's DoE inventory data, the API's weekly update reportedly showed headline crude stocks -6.1mln (exp. -1.5mln), though stocks at Cushing rose 0.5mln; in the products, gasoline was -1.9mln (exp. -0.9mln), while distillate inventories built 1.7mln (exp. -0.8mln).


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  AHEAD: In the week ahead, Major releases include: US GDP, PCE, ECI; EZ GDP; BoJ, BoC mins, CBRT; our full week ahead briefing can be accessed here.

26 Apr 2023 - 08:10- Fixed IncomeEU Research- Source: Newsquawk