EUROPEAN EQUITY OPEN: Subdued start; broad Stoxx 600 still on course for weekly loss despite mid-week bounceback

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  OPEN:  After a wild week, stocks opened with a more subdued tone in Europe on Friday. The broad Stoxx 600 is on course for a fourth session of gains but still below the neutral line for the week, and ahead of month end next week, is looking to put in its worst monthly performance since October 2020. LVMH earnings out of Europe were solid, while tech giant Apple also posted solid numbers after the US close, both providing some comfort about the health of large cap earnings amid the recent market volatility. This morning, data showed German import prices rising just 0.1% M/M in December (exp. 2.0%), with the annual measure cooling to 24.0% Y/Y (exp. 26.4%). From France, French prelim GDP above expectations in Q4 (+0.7% Q/Q vs exp. +0.5%).


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  INDICES: At 08:05GMT, Euro Stoxx 50 -0.4%, FTSE 100 -0.3%, DAX 40 -0.8%, CAC 40 -0.1%, FTSE MIB -0.2%, IBEX 35 -0.2%, SMI -0.4%. Retail is the outperforming sector after earnings from H&M and LVMH; Banks and Tech are lagging.


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  NOTABLE MOVERS: H&M (HMB SS) +7.0% after earnings; LVMH (MC FP) +5.0% after earnings; ITV (ITV LN) +3.7% after Barclays raised PT, Kering (KER FP) +2.4% likely in sympathy with lux names; Leonardo (LDO IM) +2.0% after raising guidance; UniCredit (UCG IM) +1.8% after earnings; Henkel (HEN3 GY) -6.0%, Ocado (OCDO LN) -4.6% after German court ruling.

CONSUMER CYCLICAL:

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  LVMH (MC FP) - Solid earnings. FY 2021 sales EUR 64.22bln (exp. 62.26bln), net 12bln (prev. 4.70bln). Wines & Spirits +18% Y/Y (exp. 20%); Fashion and Leather Goods +28% Y/Y (exp. +16%); Perfumes and Cosmetics +20% Y/Y (exp. +20%); Watches and Jewellery +21% Y/Y (exp. 8%). Tiffany had a record year for profitability and sales despite closure for renovation of its New York flagship store, which will reopen this year. Group has the advantage of pricing flexibility in a phase of inflation, if inflation hits, it can react. Expects demand for the group's products to remain strong.


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  Salvatore Ferragamo (SFER IM) - FY21 revenue EUR 1.14bln (exp. 1.14bln).


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  H&M (HMB SS) - Q4 net sales +11%, gross profit SEK +14% at 31.3bln. Increased shipping/materials prices were offset by a more advantageous USD FX rate.


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  Carnival (CCL) - Seeing more cancellations due to COVID; bookings dampening for H2 2022 vs 2019.


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  Electrolux (ELUXB SS) - Q4 revenue SEK 35.4bln (exp. 32.9bln), operating profit 0.8bln (prev. 2.49bln). Sees market demand improving in FY22. Proposes dividend 9.20/shr (prev. 8.00/shr).


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  Accor (AC FP) upgraded to Buy from Hold at HSBC

CONSUMER STAPLES:

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  Ocado (OCDO LN) - Munich Court halts proceedings blocking sale of Autostore's B1 in Germany; notes Ocado's IP rights may be invalid.

INDUSTRIALS:

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  Toyota (7203 JT) - December global sales were lower Y/Y, outlook for 2022 remains uncertain due to coronavirus, supply chains.


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  Stellantis (STLA IM) - FY21 business performance improved markedly. Dongfend Peugeot Citroen selling over 100k vehicles. Has significant growth potential ahead. Additional plans for the Chinese market are to be announced on March 1st.


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  Volvo (VOLVB SS) - Q4 revenue SEK 102bln (exp. 92.8bln), EBIT 10.2bln (exp. 10.1bln). Proposes dividend of 6.50/shr, and additional dividend of equal amount. Expect inflationary pressures to continue. Truck demand remains high.


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  Leonardo (LDO IM) - Raises FY21 guidance midpoint to the high-end of prior ranges.


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  Signify (LIGHT NA) - Revenue SEK 2.01bln (prev. 1.88bln), Net 179mln (prev. 173mln). SSS +4.5% YY. Proposes dividend of EUR 1.45/shr for FY21.


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  Associated British Foods (ABF LN) downgraded to Sell from Neutral at Goldman Sachs.


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  Premier Foods (PFD LN) upgraded to Hold from Reduce at HSBC.


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  Kion Group (KGX GY) upgraded to Buy from Hold at HSBC.

TECH:

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  Apple Inc (AAPL) - Rose in afterhours trading after publishing earnings and revenues above expectations. EPS 2.10/shr (exp. 1.89), Revenue USD 123.95bln (exp. 118.66bln). iPad sales were a little light at USD 7.25bln (exp. 8.18bln), as significant supply chain constraints led to shortages;  but iPhone sales topped the analyst view at USD 71.63bln (exp. 68.34bln). Services revenues USD 19.52bln (exp. 18.61bln). Supply chain issues cost more than USD 6bln in quarter, but it noted an easing of these issues, and expects less issues in the current quarter; it’s not providing guidance beyond current quarter due to supply chain issues; Added that it expects solid Y/Y growth in revenue in Q2, but to decelerate from December quarter. Said chip shortages were primarily for older product models.


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  SK Hynix (000660 KS) - Q4 net KRW 3.3tln (exp. 3.0tln), operating profit 4.2tln (exp. 4.0tln), revenue 12.4tln (exp. 12.5tln). Q1 DRAM shipments are expected to fall by mid-high single digit percentage Q/Q; sees supply chains improving in H2.


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  Fingerprint Cards (FINGB SS) - FY21 revenue SEK 356mln (prev. 369mln), EBITDA 27mln (prev. 32mln), net 4mln (prev. -325mln).

HEALTH CARE:

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  Getinge (GETIB SS) - Q4 net sales SEK 7.9bln (prev. 8.8bln), adj. EBITA 1.7bln (prev. 1.8bln). Order bookings +20% Y/Y ex-FX.


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  Orpea (ORP FP) downgraded to Hold from Buy at Jefferies.

FINANCIALS:

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  UniCredit (UCG IM) - Q4 net EUR -1.44bln (exp. -1.15bln), Net Interest 2.41bln (exp. 2.23bln), Net Fees 1.68bln (exp. 1.65bln), CET1 14.1%. Proposed cash dividend of 1.17bln and buybacks of 2.58bln.


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  UniCredit (UCG IM), Allianz (ALV GY) - Sign multi-country agreement for enhanced collaboration.


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  CaixaBank (CABK SM) - Q4 revenue 2.89bln (prev. 2.15bln), Net 425mln (prev. 655mln), NII 1.56bln (prev. 1.25bln). Intends to conduct share buybacks in 2022.

COMMUNICATION:

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  Cineworld (CINE LN) - Acknowledges the cross-appeal from Cineplex, does not expect damages to be payable whilst an appeal is underway.


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  Telia (TELIA SS) - Q4 revenue SEK 23.3bln (prev. 23.4bln), adj. EBITDA 7.3bln (prev. 7.4bln).


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  Telenor (TEL NO) - Digi unit Q4 EBITDA NOK 1.55bln (prev. 1.69bln).

MATERIALS

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  Givaudan (GIVN SW) - FY21 revenue CHF 6.7bln (prev. 6.3bln). Said all 2025 strategic focus areas are on track.


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  SSAB (SSAB SS) - Q4 revenue SEK 27.3bln (exp. 26.7bln), EBITDA 7.7bln (exp. 6.7bln), operating profit 6.9bln (exp. 6.1bln). Q1 steel demand expected to be good, continued uncertainty on component shortage and bottlenecks.

DAY AHEAD 27TH JAN:

• 08:00GMT/03:00EST: Spain GDP Growth Rate Flash (Q4)


• 09:00GMT/04:00EST: EZ M3 Money Supply (DEC)


• 09:00GMT/04:00EST: Germany GDP Growth Rate Flash (Q4)


• 09:00GMT/04:00EST: Italy Business Confidence, Consumer Confidence (JAN)


• 09:00GMT/04:00EST: Italy PPI (DEC)


• 10:00GMT/05:00EST: EZ Sentiment Indicators (JAN)


• 10:10GMT/05:10EST: Italy 5-Year, 10-Year BTP Auction


• 11:00BST/06:00EDT: Chevron Corp (CVX) earnings (preview)


• 11:30BST/06:30EDT: Caterpillar Inc (CAT) earnings (preview)


• 11:30GMT/06:30EST: India Foreign Exchange Reserves (21/JAN)


• 11:30GMT/06:30EST: Spain Business Confidence (JAN)


• 13:30GMT/08:30EST: US Personal Income, Spending (DEC)


• 13:30GMT/08:30EST: US PCE Price Index (DEC)


• 13:30GMT/08:30EST: US Employment Cost Index (Q4)


• 15:00GMT/10:00EST: US Michigan Consumer Sentiment Final (JAN)


• 18:00GMT/13:00EST: US Baker Hughes Rig Count (28/JAN)

28 Jan 2022 - 08:11- Fixed IncomeData- Source: Newsquawk