EUROPEAN EQUITY UPDATE: Choppy sentiment ahead of US NFP

STOXX 600: U/C

• European bourses opened with a slight negative bias, continuing the mostly subdued mood in APAC trade overnight.


• Since then, price action has been choppy; sentiment initially improved in early-morning trade, but has subsequently pared in tandem with some pressure seen in US futures - as it stands, indices are mostly lower.


• The scheduled EZ-specific docket has been, and will continue to remain light for the remainder of the day; focus will ultimately be on the US NFP report in the afternoon (details in the US section).

Sectors: Slightly Negative

• European sectors hold a slight negative bias, and with the breadth of the market fairly narrow.


• Basic Resources tops the pile, propped up by the continued strength in metals prices. Telecoms follow behind, with Media comprising of the top three. Autos sector is incrementally in the green, buoyed by modest strength in Mercedes-Benz (+0.9%) after the co. reported Q4 sales; by region, China -7%, Europe -3%, US +9%.


• Retail is underperforming today, hampered by post-earning losses in Sainsbury’s. Insurance and Food Bev. & Tobacco are also on the backfoot.

Others: FTSE 100 -0.1%, CAC 40 -0.2%, DAX 40 -0.1%

• The FTSE 100 is modestly lower today, with performance to a similar magnitude as peers. Persimmon (+1.8%) and Reckitt (+1.7%) both top the pile after receiving broker upgrades. Mining names are generally firmer today, with metals prices generally residing in positive territory; an Antofagasta (+1%) broker upgrade at Morgan Stanley may also be lifting sentiment. Sainsbury’s (-2.4%) slips after its Q3 trading update; the supermarket reported its “biggest ever Christmas”, and reiterated its previous guidance, while it announced it will raise hourly pay by 5%; elsewhere, the CEO highlighted that the Budget tax rises will bring inflationary pressures – echoing similar remarks made by Greggs/Tesco yesterday.


• The CAC 40 was initially one of the better performers in Europe, but has now been swept away in the broader slip of sentiment in the complex. Airbus (+1.3%) is towards the top of the pile after it came close to its 2024 delivery targets, following a weak start to the year – the CEO also said the co. has made progress in the way to deals with supplier problems, which is now paying off. Outside of the CAC 40, but to French stocks more generally; Ubisoft (-7.5%) sank as much as 10% in early-morning trade, after the co. saw a slump in net bookings and announced a delay to the much anticipated 'Assassin's Creed Shadows' game. The French game-maker also said it has appointed advisors to explore "strategic and capitalistic" options.

US Equity Futures: ES -0.2%, NQ -0.4%, RTY -0.5%

• Futures are modestly in the red, as cash trade returns from holiday on account of the US Day of Mourning for President Carter.


• The highlight of the day is the US jobs data for December. The pace of payroll growth is expected to ease, in keeping with the Fed’s view that it is “cooling gradually”. The jobless rate is expected to be unchanged at 4.2%, while the rate of average hourly earnings is seen cooling a little in the month, but maintaining its annual pace. Fed’s Goolsbee is then due to speak thereafter.

10 Jan 2025 - 09:50- EquitiesResearch Sheet- Source: Newsquawk