EUROPEAN EQUITY UPDATE: Stocks attempt to bounceback from Friday’s sell-off

Analysis details (09:33)

Stocks in Europe have seen a strong start to the week (Eurostoxx 50 +1.5%) in an attempt to bounce back from some of the losses seen last Friday. Fresh incremental macro drivers are on the light side for the region asides from updates on the Brexit front, albeit this is not expected to have too much follow-through into broader risk sentiment. Asia-Pac stocks began the week cautiously heading into month-end, and a slew of upcoming releases including Chinese PMI data. US equity futures are starting the week with gains (ES 0.4%, NQ +0.5%, RTY +0.4%) following Friday's downside induced by hot US inflation data which lent to further hawkish repricing of Fed rate hike trajectory expectations. The slate for today is benign, but later in the week traders will be watching ISM data, as well as European inflation releases and ECB meeting minutes. JPMorgan has reiterated to its clients that the Value gains over Growth will be much lower this year. "This is partly driven by our view from October that inflation has peaked, and that bond yields in the US are set to stall/move lower, in particular in 2H of this year,". Elsewhere, RBC has stated that it expects the S&P 500 to reach 4100 by year-end, albeit suggests that a wide range of outcomes is possible and provides a bull and bear case at 4400 and 3800 respectively. Sectors in Europe are higher across the board with Energy names top of the pile, in-fitting with price action in the crude space with support also garnered from Shell (+2.0%) following a broker upgrade at GS; other gainers include Chemicals, Banks and Tech. In terms of individual movers, Commerzbank (+4.1%) sits at the top of the DAX 40 after making its return to the index following the delisting of Linde. Notable earnings reports are on the lighter side today, though highlights include PostNL (-9.4%), ABF (+1.3%) & Bunzl (+2.6%).

27 Feb 2023 - 09:33- Research Sheet- Source: Newsquawk