EUROPEAN EQUITY UPDATE: European earnings drive single stocks in the pre-CPI lull

Analysis details (10:05)

Bourses in Europe mostly hold a downward bias following weak handovers from Wall Street and then APAC in the run-up to US CPI later today. Analysts expect headline consumer prices to pick up by 0.6% M/M in October, accelerating from the 0.4% M/M rate in September; the annual measure, however, is seen paring to 8.0% Y/Y in October from 8.2%. The core measure is seen cooling a touch to 0.5% M/M, lower than the 0.6% M/M in September, but a still elevated level vs historical levels, while the annual core measure is seen easing a touch to 6.5% Y/Y from 6.6% in September (Click here for the fill Newsquawk Primer). Analysts at ING write “Expect the dollar and the positively correlated bond and equity markets to trade off today's data - where any upside surprise could do some damage to the recent benign risk environment and end the recent correction in the dollar.” It’s also worth bearing in mind that this CPI report will not have the final say as to what the Fed will opt to do at their next meeting, with one more set of jobs, inflation, and survey reports due before the FOMC’s Dec 13-14th confab. On that note, the session sees a slew of Fed speakers - Harker (2023), Logan (2023), Daly (2024), Mester (2022), George (2022), and Williams (voter), who are all on the docket to give remarks in wake of the US CPI data. US equity futures are trading sideways with modest gains and relatively broad-based performance thus far (ES +0.3%, NQ +0.4%, YM +0.3% and RTY +0.2%). Over in Europe, indices see varying degrees of losses, albeit modest (Euro Stoxx 50 -0.1%, Stoxx 600 -0.1%), with the Italian FTSE MIB (+0.3%) the current outperformer as index heavyweight Telecom Italia (+3.4%) leads the charge post-earnings. Sectors in Europe are mostly in the red, although to a lesser extent than at the cash open, with no overarching theme aside from earnings. Utilities sit at the top of the bunch following well-received earnings from Centrica (+8.0%) and National Grid (+0.5%). Insurance is a close second as Allianz (+2.3%) buoys the sector. Healthcare is driven forward by heavyweight AstraZeneca (+1.6%). On the flip side, Retail, Real Estate, Industrials, and Travel & Leisure reside as the laggards. In terms of individual movers, Teleperformance (-38%) shares are halted at the time of writing after the Vice Minister of Labor Relations in Colombia announced that an investigation was launched against the company. Elsewhere, the pre-market saw a slew of earnings including Continental (+2.3%), Engie (+4.5%), RWE (+1.5%), Delivery Hero (+7.4%), Deutsche Telekom (-2.8%), Merck (-2.5%), ArcelorMittal (-0.7%), and Credit Agricole (-4.3%).

10 Nov 2022 - 10:07- Research Sheet- Source: Newsquawk