EUROPEAN EQUITY UPDATE: Firmer-than-expected EZ PMI fails to lift stocks

Analysis details (09:54)

Stocks in Europe trade with little in the way of firm direction with the latest batch of Eurozone PMI metrics unable to sway price action. After a mixed showing from France and Germany (which showed a beat for French manufacturing/miss for services and the opposite for Germany), Eurozone figures exceeded expectations for both sectors and nudged the composite back into positive territory. Accompanying commentary from S&P Global noted that “a steadying of the eurozone economy at the start of the year adds to evidence that the region might escape recession”.  The handover from the APAC region was mostly positive, however, it was once again subject to mass market closures given the Lunar New Year holiday. Stateside, US futures (ES -0.1%, NQ -0.2%, RTY -0.1%) are a touch below the unchanged mark with the ES remaining above the psychological 4,000 level. Many have suggested that the region around 4,150 could prove to be a ceiling from a valuation perspective (assuming an 18x multiple on FY23 EPS expectations of USD 230 for the index). Today’s US data highlights include the Richmond Fed's manufacturing gauge for January and S&P Flash PMI metrics which will help inform traders' expectations for the January ISM report, which is due to be released early February. Elsewhere, the earnings docket begins picking up; today, numbers are due from Microsoft (MSFT), Verizon (VZ), JNJ (JNJ), General Electric (GE), Lockheed (LMT), Raytheon (RTX), 3M (MMM), Haliburton (HAL), PACCAR (PCAR), Union Pacific (UNP), Texas Instruments (TXN). Sectors in Europe are mixed with Insurance top of the leaderboard, whilst Energy and Basic Resources lag peers. Credit Suisse (+0.2%) was unable to hold onto open gains which stemmed from news that the Qatar Investment Authority doubled its stake in the Co. to just under 7%. Swatch (+1.6%) is firmer on the session post-FY earnings which saw the Co. report softer-than-expected metrics but upbeat commentary in which it stated that it is looking to achieve a record year in 2023 (note, the Co. was also subject to a broker upgrade at Morgan Stanley). Logitech (+1.9%) is another notable post-earnings gainer despite what appeared to be a softer-than-anticipated earnings release. Finally, Rolls Royce (+2.5%) has benefited from a broker upgrade at Exane BNP, whilst Dassault Aviation (-2.8%) sits near the bottom of the Stoxx 600 following an equivalent downgrade.

24 Jan 2023 - 09:54- EquitiesData- Source: Newsquawk