EUROPEAN EQUITY UPDATE: Stocks continue to gain as month-end looms, and large-cap earnings pick up in pace

Analysis details (10:15)

Equities in Europe continue to gain heading into month-end, with overall sentiment across stocks bolstered by Meta (+17% pre-market) earnings yesterday ahead of another slew of large-cap earnings today – including Amazon, Apple, Intel, Twitter, Mastercard & McDonald’s. US equity futures are firmer across the board, with the NQ (+2.4%) clearly outpacing its peers (ES +1.7, RYT +1.6%, YM +1.1%), although next week's docket will be packed with US risk events including the FOMC announcement, ISM PMIs and the US jobs report. Back in Europe, the EZ majors are posting broad-based gains (Euro Stoxx 50 +2.0%; Stoxx 600 +1.4%) whilst the FTSE 100 (+0.9%) and SMI (+0.8%) lag in comparison due to the sectoral configuration. All sectors are in the green to varying degrees and clearly portray an anti-defensive bias – with the exception of Basic Resources, which sits at the bottom of the bunch after heavily outperforming yesterday, although Glencore (+1.1%) bucks the sectoral trend after guiding FY marketing earnings comfortably above prior range. Earnings have picked up in Europe in what has been a particularly busy pre-market. Strategists at Bernstein suggest that while European earnings have thus far been robust, uncertainty on outlook remains as high – "The degree of estimate dispersion is very high, showing uncertainty, while 2022 earnings growth estimates excluding energy are down 1.7% since the start of the year". The desk notes that 61% out of the European companies that have reported (25% of total) thus far have posted beats. "Earnings revisions for Europe are currently about flat; energy, healthcare, staples, materials are seeing the strongest positive revisions while banks and telecoms are seeing the most negative revisions," Bernstein says. In terms of some of the highlights: in the banking sectors, Standard Chartered (+13%), Barclays (+2%), and Sabadell (+2%) showed strong earnings, with the former also raising guidance. In the consumer space, Unilever's (-0.1%) and Sainsbury's (-2.9%) shares are subdued as inflation threatens future earnings, with the latter also flagging early signs that customers are being a bit more cautious. In Scandinavia, Nokia (+2.0%) topped forecasts but warned of supply chain impacts, whilst Volvo Cars (+7.5%) soared at the open after seeing decent Revenue and EBIT metrics, but the carmaker noted stable financial results, but the Ukrainian war and China's COVID situation are having gradual impacts.

28 Apr 2022 - 10:15- EquitiesResearch Sheet- Source: Newsquawk