EUROPEAN EQUITY UPDATE: Stocks cheer the prospective appointment of Bessent as Treasury Secretary

STOXX 600: +0.3%

• European bourses have kicked the week off on the front foot with reports suggesting that the better mood is partly a function of Scott Bessent's nomination as US Treasury Secretary, who may be more flexible in trade issues with China; Bessent is known for a more moderate stance on tariffs, and has advocated for a gradual approach to implementing levies.

Sectors: Mixed

• European sectors opened with a strong positive bias before slipping towards a more mixed picture as indices pulled back.


• Basic Resources are top of the leaderboard, in-fitting with underlying price action in the metals space with Anglo American (+1.5%) boosted by news that it is to sell its coal mines within Australia to Peabody for up to USD 3.8bln. Elsewhere, the declines in global yields has provided support for the Real Estate sector, whilst acting as a drag on Banking names which sit near the foot of the leaderboard. Retail names have been weighed on by post-earnings losses in Kingfisher (-13%).

European Indices: DAX +0.5%; FTSE 100 +0.4%; CAC +0.5%, FTSE MIB -0.1%, IBEX 35 +0.6%

• The FTSE MIB is lagging peers with UniCredit (-3.2%) bottom of the index after offering to purchase Banco BPM (+2.6%) for EUR 10bln. In sympathy with this, Commerzbank (-3.3%) shares are lower. However, UniCredit CEO Orcel has stressed that its position in Commerzbank is an investment which will take time to mature.


• Elsewhere, in the EZ banking sector, Caixabank (-4.3%) and ING (-0.4%) have been hampered by broker downgrades at Morgan Stanley.


• On the M&A front, ITV (+6.3%) shares are soaring after reportedly attracting takeover interest from suitors such as CVC Capital Partners and France's Groupe TF1, according to Sky News. Elsewhere in the UK, JD Sports (+5%) is top of the FTSE 100 following an upgrade at Deutsche Bank, with the FTSE 100 more broadly propped up by strength in Basic Resources.


• Of note for the European auto sector, EU Trade Committee Chair Lange says they are close to an agreement with China to abolish EV import tariffs.

US Equity Futures: ES +0.5%, NQ +0.5%, RTY +1.1%.

• US equity futures are cheering the news that US President-elect Trump has selected Scott Bessent as US Treasury Secretary. Bessent is expected to prioritise delivering Trump tax cuts and maintaining the dollar's position as the global reserve currency, while he said enacting tariffs and cutting spending will also be a focus. On tariffs, Bessent is seen as more of a gradualist.


• In pre-market news, the Biden administration reduced Intel’s (-0.5% pre-market) CHIPS Act grant from USD 8.5bln to under USD 8bln due to investment delays and business struggles, NYT reports. India’s antitrust body has rejected Apple’s (U/C pre-market) request to delay a report that concluded the company had violated competition laws, Reuters reports. Tesla (+1.7% pre-market), introduced a limited-time RMB 10,000 discount for two Model Y variants in China, valid for orders made by December 31st, CnEVPost reports. AMD (+0.9% pre-market) is reportedly looking to enter the mobile phone chip market, with new products expected to be produced using TSMC’s 3nm process, according to China’s UDN.

25 Nov 2024 - 10:10- EquitiesImportant- Source: Newsquawk