EUROPEAN EQUITY UPDATE: Modest gains across stocks but volumes light with the UK closed

Analysis details (10:02)

Bourses in Europe trade mostly higher with volumes in the region anaemic amid the closure of UK markets for the Spring Bank Holiday, and again tomorrow for Platinum Jubilee Bank Holiday. Sentiment during the European morning is more sanguine following a subdued APAC session - which saw the Hang Seng and Shanghai Composite mixed heading into the long weekend across Greater China due to the Dragon Boat Festival tomorrow. US equity futures trade with modest gains as the contracts coat-tail Europe’s mild upside, with the NQ (+0.7%) narrowly outperforming the ES (+0.5%), RTY (+0.4%) and YM (+0.4%) ahead of US ADP, IJC and commentary from Fed’s Mester and Logan. In terms of macro commentary, there has been a lot of attention recently on the seemingly diverging views of JPM’s strategist Marko Kolanovic and the bank’s boss Jamie Dimon. Kolanovic thinks that US stocks are set for a gradual recovery this year and will end 2022 around the unchanged mark. He argues that a lot of the bad news is now priced in, and he repeated recent arguments that near-record-low positioning, and bearish sentiment, combined with his view that there will be no recession, a supportive dynamic from US consumers, the post-COVID reopening globally, as well as Chinese stimulus and recovery, leave the team with a positive view on risk assets. That view is far more hopeful than his boss Jamie Dimon, who on Wednesday warned investors to brace themselves for the hurricane ahead. Back to today’s session, European equities are firmer (Euro Stoxx 50 +0.8%; Stoxx 600 +0.5%) but the Dutch AEX (Unch) lags as Dutch-listed Shell (-1.3%) falls following the recent FT-induced decline in crude prices. The CAC 40 (+1.0%) outpaces its peers with gains spear-headed by Saint-Gobain (+3.6%) and Pernod Ricard (+2.8%), the former after affirming its outlook and the latter is boosted by Remy Cointreau’s (+3.4%) earnings. The DAX meanwhile sees Daimler Trucks (+2.2%) among the winners Co. executive said factories are working through the backlog as the semiconductor shortage is easing – comments which provide underlying support to the broader auto sector. In terms of individual movers, the Italian antitrust body has given the green light for a merger between the BPER (+0.8%) and Banca Carige (+0.1%). Elsewhere, a consortium of foreign investors is reportedly considering a takeover of the SAS (+3.4%), according to sources.

02 Jun 2022 - 10:01- EquitiesResearch Sheet- Source: Newsquawk