EUROPEAN EQUITY UPDATE: Stocks edge higher on Friday whilst earnings are set to pick up in pace

Analysis details (10:10)

Stocks in Europe opened on the front foot and have edged higher since (Euro Stoxx 50 +0.8%; Stoxx 600 +0.5%) as the region coattails on the late Wall Street rebound. APAC markets closed mostly lower with Chinese markets hit as Q2 GDP and IP missed expectations - albeit Retail Sales took some of the pain away – whilst the Chinese housing sector plumbed the depths. US equity futures have been ticking higher ahead of more bank earnings, and in tandem with Europe following rangebound trade overnight. News flow in the European morning has been light thus far but eyes remain on several themes this Friday – Fed commentary, China’s data, and Italy’s unstable politics, whilst President Biden is also poised to meet with Saudi King Salman and Crown Prince Mohammed bin Salman in the quest for more oil. The meeting will likely see a more geopolitical/human-rights-related agenda as opposed to the meaningful addition of oil barrels. Prior guidance also suggested the meeting will take place from July 15th-16th, thus we could see updates over the weekend. In terms of Italy, the FTSE MIB (+1.5%) is among the outperformers despite the political rambles as Italian President Mattarella rejected PM Draghi's resignation and asked Draghi to address parliament to gauge the political situation, while Draghi will address the Italian parliament early next week, likely on Wednesday. DAX 40 (+1.5%) is driven by the Autos and Parts sector, with base metals extending their declines and relieving some margin pressures for the sector. Sectors are mostly firmer with Autos leading the gains and followed closely by Retail and Tech, whilst Travel & Leisure, Basic Resources, and Consumer Products and Services reside in the red. The latter is pressured by several corporate updates from the sector, alongside luxury names taking a hit after the Chinese GDP metrics. Burberry (-6.5%) and Richemont (-4.9%) also saw trading updates that both highlighted the impact of the Chinese lockdowns, with the former warning the situation remains uncertain. In terms of other movers, Fevertree (-28%) slipped at the open as the Co. said the impact of logistics and cost headwinds across industries has significantly worsened in recent months. Finally, Rio Tinto (-2.3%) fell in tandem with its performance in Australia amid the copper and iron ore price declines, whilst an update overnight saw an increase in its quarterly output and shipments, as it also warned of headwinds to its business and higher costs.

15 Jul 2022 - 10:10- MetalsBank Speaker- Source: Newsquawk