EUROPEAN EQUITY UPDATE: Feb rally continues as Europe catches up with late US surge

Analysis details (09:54)

European equities (Stoxx 600 +0.6%) have extended on the early-February rally with the late Wall St. surge benefitting stocks in the region. Gains in the US were also bolstered after-hours following strong earnings releases from Alphabet (+9% pre-market) and AMD (+10% pre-market) with the former also announcing a 20-for-1 stock split. Accordingly, the NQ (+1.4%) future is outpacing the ES (+0.6%) and RTY (flat) with large cap earnings today including Thermo Fisher Scientific and Abbvie ahead of the opening bell with Meta, Qualcomm, T-Mobile and MetLife due to report after the close. From a macro perspective, focus in the US will fall on today’s ADP print which is pencilled in at 207k ahead of Friday’s NFP release. Sectors in Europe are mostly firmer with the exception of energy names which are pulling back from yesterday’s strong outing. In sympathy with price action in the US, Tech is the best performing sector in the region with AMD earnings helping to support European chip names (Infineon +2.1%, ASML +1.4%, STMicroelectronics +1.3%). Health care names are lagging peers amid losses in Novartis (-2.4%), which is also capping upside for the SMI (+0.1%) after Q4 results disappointed. In the banking sector, Julius Baer (-4.8%) sits at the foot of the Stoxx 600 with a 55% increase in 2021 net profits unable to support its share price. Swedbank (-4.3%) is also a notable laggard for the sector post-earnings which saw the Co. miss on NII. To the upside, Ocado (+7.6%) leads the charge for the Stoxx 600 following a double upgrade at Credit Suisse whilst Vodafone (+3.1%) shares are higher post-Q3 trading update which saw the company report a Y/Y increase in revenues and announce it is on track to attain FY 2022 guidance.

02 Feb 2022 - 09:53- Equities- Source: Newsquawk