EUROPEAN EQUITY UPDATE: Risk aversion amid a continuation of post-NFP action

STOXX 600: -0.9%

• European bourses began the week entirely in the red and have gradually edged lower as the morning progressed; as it stands, indices reside at worst levels.
• The EZ-specific data docket has been light today, and this will remain the case for the remainder of the day. More focus has been placed on a few ECB speakers; Chief Economist Lane said “we need to make sure that the economy does not grow too slowly”, via Der Standard. Elsewhere, Vujcic noted that it is better to move gradually; he also brought to focus the recent weaker EUR, saying “exchange rate has not weighed much on ECB policy decisions so far, but must monitor”.

Sectors: Negative

• European sectors hold a strong negative bias, with only a handful of industries residing in positive territory.
• Energy is by far the clear outperformer today, buoyed by the strength in oil prices; the complex is lifted by expectations of Russian crude supply disruption after the US recently toughened sanctions on Russia's energy sector. Utilities and Basic Resources follow behind; the latter benefiting from mostly firmer metals prices after better-than-expected Chinese trade figures. CapEco writes, “we expect shipments to remain strong in the coming months, as US importers continue to stockpile Chinese goods ahead of tariff hikes”.
• Tech is the underperformer today, swept away by the risk-off sentiment and as traders digest comments from Apple watcher Ming-Chi Kuo, who said the iPhone maker is facing challenges in 2025, including stagnant iPhone growth and declining Chinese market share. STMicroelectronics (-4%), ASML (-2.9%), Infineon (-2.6%).

Majors: FTSE 100 -0.4%, DAX 40 -0.8%, CAC 40 -0.7%

• The FTSE 100 is on the backfoot, but faring a little better vs peers. Entain (+4.9%) is the best performer in the index, after the co. said it expects group EBITDA to be at the top end of its guidance range. For energy names more broadly, BP (+1.8%) and Shell (+1.5%) both gain amid the strength in oil prices. Outside of the FTSE 100, Page (-4.8%) slips after its Q4 results, where it reported weak headline metrics and cut its op. profit guidance.
• The DAX 40 is the marginal underperformer in Europe. Porsche AG (+2.9%) manages to top the pile after the co. reported its 2024 deliveries – this has helped to prop up sentiment across German autos. Infineon (-2.7%) is found at the foot of the pile, given the losses across the Tech sector in the day.

US Equity Futures: ES -0.8%, NQ -1%, RTY -1%

• Futures are entirely in the red, in a continuation of the downside seen following the strong NFP report.
• The US Day sees the release of the monthly NY Fed Survey of Consumer Expectations, which will receive attention after the University of Michigan's prelim data showed a marked pick-up in inflation expectations on Friday, and comes ahead of this week's CPI data from the US.