EUROPEAN EQUITY UPDATE: Mixed trade in Europe with newsflow on the lighter side

STOXX 600: -0.1%

• European bourses began the session mixed, continuing the indecisive mood seen in APAC trade overnight.


• Price action has generally moved sideways throughout the morning, given the lack of EZ-specific updates.

Sectors: Mixed

• European sectors are mixed, and aside from the day’s clear underperformer (Tech), the breadth of the market is fairly narrow.


• There are a few reasons for the underperformance in Tech today; perhaps the leading factor, Korean-listed SK Hynix fell around 2% in Asia trade despite reporting generally strong Q4 results; traders focused on comments which warned of steeper demand declines in commodity memory chips. Some of the pressure could also be attributed to a slight unwind of the hefty gains seen in the prior session, spurred on by Trump’s USD 500bln AI investment. Elsewhere, Dutch PM Schoof said “The Netherlands expects US President Trump to keep pressing to restrict ASML’s exports of chip-making machines to China”, via Bloomberg.


• Basic Resources also falls given the weakness in metals prices today. Retail completes the bottom three, with losses driven by Puma (-18%) and Associated British Foods. The former missed on both sales and profit figures, where it also announced a cost-cutting plan.


• Banks top the pile, joined closely by Utilities and Telecoms.

Majors: FTSE 100 -0.1%, AEX -0.7%, IBEX 35 +0.2%

• The FTSE 100 is a little lower in today’s session, in-fitting with peers. Mining names generally populate the foot of the pile, pressured by the weakness in base metals prices today; Anglo American (-2.2%), Glencore (-1.3%). Elsewhere, JD Sports (-2.4%) continues to decline after receiving a downgrade at Citi, alongside a hefty PT cut – poorly-received Puma results are also not helping. Sticking with retail, Associated British Foods (-1.8%) is lower after its results, where it cut Primark guidance, due to weaker UK shopper demand.


• The AEX is the clear underperformer in Europe today, pressured by significant weakness in chip names; ASML (-3.6%), BE Semi (-2.8%) – (reasons mentioned above).

US Equity Futures: ES -0.2%, NQ -0.5%, RTY -0.2%

• Futures are broadly on the backfoot, with slight underperformance in the tech-heavy NQ, following the weakness in Europe as the sector digests poor SK Hynix results.


• The US Day sees the release of weekly initial jobless claims data (which coincide with the BLS survey window for the January jobs data), and are expected at 220k from 217k; continuing claims (next week's data coincides with the BLS window) are seen at 1.862mln from 1.859mln. KC Fed's manufacturing gauge for January will be released. Canadian retail sales data is expected to rise 0.2% M/M in November, cooling from the prior 0.6%.


• US President Trump is scheduled for 16:00 GMT at Davos, the appearance is listed for 45 minutes in what is dubbed as a "special address" - with the content of the speech currently unknown.

23 Jan 2025 - 10:20- EquitiesData- Source: Newsquawk