EUROPEAN EQUITY UPDATE: Stocks fade initial strength as focus turns to UK Autumn Statement and US jobless claims ahead of Thanksgiving

Analysis details (10:13)

• European equities (Eurostoxx 50 +0.3%) are extending gains, with DAX futures briefly breaching the 16k mark earlier in the session, irrespective of light newsflow. The day ahead is light for data releases, with the US Jobless Claims the only notable data release, while traders also look forward to the UK Autumn Statement, which will be announced at 12:30 GMT / 07:30 ET. In terms of what has already been announced, an increase to the minimum wage has been confirmed by the Treasury while a cut to National Insurance is widely touted – see the Newsquawk preview for more detail.


• Equity sectors in Europe are mostly in the green, with the exception of Banks, Energy, Retail and Healthcare, the latter hampered by Bayer (-2.4%) as the Co. continue to see downside following a slew of negative news over the past few days. Kingfisher, the worst-performing stock in the Stoxx 600, is dragging on the Retail sector after the Co. reported a miss on its results. To the top of the pile, Real Estate is outperforming with desks attributing the strength to the UK Autumn Statement later today. Despite initially experiencing some weakness (as a read-across from Nvidia), Technology is now firmly in the green, largely attributed to Sage (+10.3%), which is soaring following a significant beat on its results and after it commenced a share buyback for up to GBP 250mln, between 22nd November and 23rd April. In terms of stock specifics, ThyssenKrupp (+6.7%) are extending gains post-earnings. The Co. ultimately reported a mixed set of results and announced it made a EUR 2.1bln steel unit impairment loss for FY22/23, due to "gloomy" earnings expectations in the short, medium and long term. The upside strength has been attributed to a slight increase in its revenue guidance, despite the challenging environment.


• Asia-Pac stocks were mixed following the weak handover from the US where sentiment was dampened amid soft data and pre-Thanksgiving positioning. Furthermore, participants digested geopolitical developments including North Korea’s satellite launch and the agreement between Israel and Hamas for a four-day pause of the fighting in Gaza and a hostages-prisoners swap. ASX 200 (-0.1%) was rangebound as losses in tech and consumer sectors were counterbalanced by resilience in defensives, while Westpac Leading Index also showed a slight contraction. Nikkei 225 (+0.2%) was the outperformer and clawed back initial losses shortly after the open despite the government cutting its view on the overall economy for the first time since January. KOSPI (-0.4%) was pressured following the satellite launch by North Korea which plans to launch additional spy satellites. Hang Seng (+0.1%) and Shanghai Comp. (-0.8%) were cautious with price action rangebound amid a lack of fresh macro drivers from China although the Hong Kong benchmark was underpinned by strength in Baidu post-earnings.


• US futures (ES Unch., NQ -0.1%, RTY +0.2%) are trading with little direction and weaving around the unchanged mark, with slight outperformance in the RTY, which saw a more pronounced sell-off in the prior session. Ahead of the US Thanksgiving holiday tomorrow, there will be some important data releases today including; US MBA, Durable Goods and IJC. The employment data will be closely watched as it will be filtered into the important NFP report later in the month. Additionally, equity traders will keep note of earnings from Deere (DE, +0.9%), due in the pre-market. In terms of equity specifics, Nvidia (NVDA, -1.0%) is seen lower in the pre-market; its Q3 results topped expectations, though it warned China sales would decline in Q4; Bloomberg suggested that the results "failed to satisfy the loftier expectations of shareholders who have bet heavily on an artificial intelligence boom".

22 Nov 2023 - 10:13- EquitiesData- Source: Newsquawk