EUROPEAN EQUITY UPDATE: Firm trade with tech surging on blockbuster ASML bookings

EUROPEAN INDICES STOXX 600 +0.5%, AEX +1.0%, CAC 40 -0.4%,

• European bourses began the European session mostly firmer and traded rangebound, at elevated levels throughout the morning.


• The CAC 40 is the clear underperformer in Europe today, with the index weighed on by post-earning losses in LVMH; the AEX is the day’s outperformer, with sentiment in the Tech sector lifted following blockbuster results in ASML (more below).


• On the data front, German GfK gauge of sentiment fell to -22.4 in Feb (exp. -20.0); Spanish Estimated GDP for Q4 printed above expectations. Finally, the EZ Loans to Households printed above the prior – ultimately these metrics had little impact on European indices.

Sectors: Positive

• European sectors hold a positive bias. Outside of the top/bottom performers, the breadth of the market is fairly narrow.


• Tech is by far and away the clear outperformer in today’s session, lifted by post-earning strength in ASML (+11%). The Co. reported strong rev. for Q4, and its Bookings were exceptionally strong - coming in well above expectations at EUR 7.09bln (exp. 3.53bln). It also raised its Q1 net sales guidance above consensus. Peers within the sector are stronger in tandem; BE Semi (+7%), Infineon (+3%). Ahead, traders will keep a keen eye out for comments from ASML’s CEO and CFO, who are due to speak at 10:00 GMT.


• Consumer Products is underperforming today, weighed on by losses in LVMH (-6%). The Co. beat on its FY Revenue figure, though its Net Profit fell short of expectations. The Q4 figures were a little more positive, which generally topped expectations. Focusing on China; in Q4, Asia ex-Japan fell 10% vs -16% in Q3; signalling an improving trend within the region. Additionally, the CFO said mainland China clientele stayed stable in 2024; mainland China shoppers for fashion and leather showed slightly more appetite towards end of year. These results are not quite the blow-out report seen in recent weeks by peers in the industry (Richemont and Burberry were both very strong).

Individuals:

• Logitech (+7%) gains after reporting a very strong Q3, beating on top- and bottom-line metrics, it also lifted its FY25 rev. outlook above expectations.


• Novo Nordisk (+1%) is a little firmer today, benefiting on news that the FDA approves Ozempic as the only GLP-1 RA to reduce the risk of worsening Kidney Disease and Cardiovascular death in adults with Type 2 diabetes and Chronic Kidney disease.


• Fresnillo (+2%) benefits after it released its Q4 production report; within that, the CEO noted of another solid year of production, with gold production ahead of guidance, whilst "Lead and zinc production were also up strongly over the year again".

US Equity Futures: ES +0.1%, NQ +0.4%, RTY +0.1%

• Futures are modestly firmer, but with slight outperformance in the tech-heavy NQ, which is taking impetus from the significant strength in the European tech sector, following strong results from ASML (+11%).


• Bloomberg highlights that the QQQ saw a daily inflow of USD 4.3bln, making it the largest inflow since 2021.


• Today's highlights are the FOMC policy announcement, where the central bank is expected to keep rates unchanged; the BoC is expected to cut rates by 25bps to 3.00%. The US Day sees the release of international trade stats for December. On the speakers' slate, the Senate Finance Committee will hold a hearing on RFK Jr.’s nomination to run the Department of Health and Human Services, and the Senate Commerce Committee will consider Howard Lutnick’s nomination as Secretary of Commerce.

29 Jan 2025 - 09:55- EquitiesData- Source: Newsquawk