EUROPEAN EQUITY UPDATE: Bourses opened on a strong footing and remain at highs, with Tech and Luxury among top performers

STOXX 600: +0.6%

• European bourses opened on a strong footing, and have remained at session highs throughout the European morning – continuing the momentum seen in APAC trade overnight, and as sentiment is lifted following strong Luxury/Tech updates.


• The EZ-specific data docket included German Final CPI, where the M/M metric was revised a touch higher; this had little impact on futures. Focus today will be on the ECB Minutes (Dec); as a reminder, at that meeting, the central bank delivered a 25bps rate cut, and dropped its statement reference to “keep policy rates sufficiently restrictive for as long as necessary.”.

Sectors: Positive

• European sectors hold a strong positive bias, with sentiment lifted by positive catalysts within the Luxury and Tech industries.


• Starting with Luxury; Richemont (+15%) soars after it reported extremely strong Q3 results; Sales beat expectations, whilst its Sales at Constant FX was considerably above expectations. Further to this, weak APAC demand has been a source of weakness for most Luxury names; in Q3 the Swiss giant reported a sales decline of 7% vs expectations of -15.8% in APAC; although, Richemont did note of continued weak demand in Mainland China. Peers such as Hermes (+5%) and LVMH (+7.4%) gain.


• As for Tech; chip-giants such ASML (+3.1%) and ASM International (+3.7%) both gain today, following strong TSMC results. The Co. reported a quarterly profit as AI demand continues to remain strong; the co. guided its Q1 rev. above expectations.


• Telecoms underperforms on the day, followed closely behind by Construction & Materials.

Majors: CAC 40 1.6%, FTSE 100 +0.7%, SMI +0.7%

• The CAC 40 is the clear outperformer in Europe today, and this is no surprise, given its heavy exposure to the Luxury sector; LVMH, Kering and Hermes all gain. Renault (+3%) parks itself towards the top of the pile after it noted that all brands grew in 2024.


• The FTSE 100 is on a firmer footing today, with a few key results from within the index. Rio Tinto (+1%) gains after it reported mixed Q4 production output; the miner did highlight that China has presented mixed signals during Q4 due to property market headwinds, however, there were signs of stabilisation in November. Antofagasta (+3.7%) tops the index after it reported Q4 copper production at the upper end of its guidance range. UK homebuilder Taylor Wimpey (-3.9%) slips after it said it anticipates “increased build costs pressure as a result of changed economic backdrop”. On the data front, UK GDP was softer than expected; For the Chancellor, the data is unwelcome as it will weigh on the end-2024 growth view which will be used as the starting point for the OBR's March forecasts, and as such will likely pressure her fiscal headroom.

US Equity Futures: ES +0.2%, NQ +0.4%, RTY -0.2%

• Futures are mixed, with the RTY is modest negative territory whilst the tech-heavy NQ outperforms, lifted by post-earning strength in TSMC.


• The US Day sees the release of weekly jobless claims data, where initial claims are seen at 210k from 201k, and continuing claims are seen at 1.871mln from 1.867mln. The Philly Fed manufacturing survey will be eyed after a miss in the Empire gauge on Monday. US retail sales are expected to rise +0.6% M/M in December (prev. 0.7%), while the ex-autos measure is seen +0.4% M/M from 0.2% prior, and the Control Group is seen +0.4% M/M, matching the November print.

16 Jan 2025 - 10:00- EquitiesData- Source: Newsquawk