EUROPEAN EQUITY UPDATE: Mixed trade and light newsflow ahead of NFP

STOXX 600: -0.1%

• European bourses are mixed, with trade tentative ahead of the all-important US NFP report.
• European traders will also be cognizant of the ECB Staff Revision of the Natural Interest Rate; a survey conducted by Bloomberg currently shows that the majority of surveyed economists see the rate between a 2-2.25% range.
• The EZ data docket has included German Trade Balance; it printed above expectations, which sparked immediate upside in DAX 40 futures. A few ECB speakers have appeared today; de Guindos highlighted that inflation is beginning to converge to 2% in spring; Chief Economist Lane said “best not to focus too much on the neutral rate.”

Sectors: Mixed

• European sectors are mixed, and aside from the top/bottom performers, the breadth of the market is fairly narrow.
• Construction and Materials tops the pile, lifted by post-earning strength in Vinci; Consumer Products is weighed on by losses in L’Oreal after posting weak LFL Sales in Q4 and highlighting poor Chinese demand.
• For Banks; Banco Sabadell (-1%) opened lower after it posted record profit and lifted shareholder returns, but soon fell into the red. Danske Bank (+6%) soared at the open after it topped Q4 expectations and initiated a share buyback programme.

Majors: DAX 40 U/C, CAC 40 +0.1%

• The DAX 40 is flat and trading towards the mid-point of a fairly narrow range. Focus for the index is on German autos and particularly on Porsche; Porsche SE (-0.1%) expects impairment of EUR 2.5-3.5bln in Porsche AG (P911 GY) and towards EUR 20bln in Volkswagen (VOW3 GY). Elsewhere, Porsche AG (-3.8%) noted that it expects a profit margin of 10-12% (exp. 14.8%).
• The CAC 40 is a little firmer today; Vinci (+3.5%) tops the pile, after it reported strong headline metrics and a positive 2025 outlook. L’Oreal (-2%) is found towards the bottom of the index after the co. beat on its headline metrics, but its Q4 LFL Sales was poor; Barclays highlighted that poor sales in China and in the derma division were the main contributors to weakness.

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

• Futures are mixed, and ultimately trading on either side of the unchanged mark, as traders remain cognizant of the US NFP later today.
• US nonfarm payrolls are expected to print 170k in January (prev. 256k), with the unemployment rate holding at 4.1%; while average hourly earnings are seen rising +0.3% M/M, matching the prior reading, the annual rate is seen paring to 3.8% Y/Y from 3.9%. Alongside the release, Payroll Benchmark Revisions are set to be released; later in the day, UoM Survey is also due.
• In the pre-market; Amazon's (-2.7%) Q4 results beat expectations, but it issued weak guidance for Q1, and its stock declined 4% in afterhours trading; AWS revenue missed forecasts, and it plans USD 105bln in FY25 capex, which will mainly be used for AWS, and tech upgrades.