EUROPEAN EQUITY UPDATE: Downbeat mood across stocks as mid-term votes are tallied ahead of US CPI tomorrow

Analysis details (10:05)

Equities in Europe hold a downside bias after seeing some choppiness at the cash open and following a somewhat mixed APAC handover, with US mid-term elections at the forefront ahead of US CPI tomorrow. US equity futures traded sideways on either side of breakeven in early hours but have since dipped under the overnight lows, with relatively broad-based price action seen across the ES (-0.5%), NQ (-0.5%), YM (-0.5%), and RTY (-0.5%). Futures moved horizontally overnight as US states tallied votes. In terms of where things stand, in the House, official results have Republicans on 196 and Democrats on 168. Projections from the New York Times (seats either already won by a party or projected to win) put the Republicans on 219 and Democrats on 207 with 9 seats viewed as "tossups". In the Senate, official results have Republicans on 47 and Democrats on 48. Three key battleground states which are yet to be called are Arizona, Nevada and Georgia. The Georgia seat could end up having to be decided via an election run-off which would be held on December 6th. As such, the outcome of the election might not be known for weeks (Click here for a full Newsquawk election update). Back in Europe, bourses trade with various degrees of losses (Euro Stoxx 50 -0.7%; Stoxx 600 -0.7%). The Dutch AEX (-1.5%) underperforms amid losses across most stocks and following yesterday’s outperformance. Sectors are all in the red with a clear defensive bias as Telecoms, Utilities, Healthcare, Food & Beverages post the shallowest losses, whilst Tech, Travel & Leisure, Real Estate and Retail reside at the other end of the spectrum. In terms of notable movers – Adidas (-0.1%) trimmed earlier losses of some 3% which arose from another cut to guidance – albeit on account of the termination of the Yeezy partnership. Ahold Delhaize (Unch) was initially higher after announcing a USD 1bln share buyback programme, but the CEO sees consumer downtrading in Europe and the US. Sticking with earnings, Commerzbank (-6.8%), E.ON (-1.6%), Veolia (-0.3%) are pressured post-earnings.

09 Nov 2022 - 10:05- Research Sheet- Source: Newquawk