EUROPEAN EQUITY UPDATE: Stocks hold a downward bias amid light newsflow conditions as attention turns to Fed speak

Analysis details (09:59)

• European equities (Eurostoxx 50 -0.3%) are trading weaker to various degrees, with modest underperformance in the CAC 40 (-0.4%). The European docket has been, and will continue to be very quiet from a data perspective. One notable release was the GfK, which showed German consumer sentiment improving trivially to -27.8 in December (exp. -27.9, prev. -28.3), giving a small bump to Bunds. There were a couple of central bank speakers today, including ECB’s Nagel (Hawk) and BoE’s Ramsden (Hawkish), both of which provided familiar rhetoric and added little to the current narrative. In terms of what to look out for, ECB President Lagarde is due to release a pre-recorded video at 16:00 GMT / 11:00 ET and ECB’s Lane is also due later in the day.


• European sectors are entirely in the red with Energy sitting at the top of the pile, with crude prices lifting off lows throughout the European session. Towards the bottom of the pile, Consumer Products and Services significantly lags, with a number of luxury names weighing the sector as a whole. LVMH (-2.8%), Kering (-3.1%) and Moncler (-2.7%) are amongst the laggers, potentially a factor of mixed sentiment in Chinese trade overnight coupled with an LVMH price target reduction at HSBC and Citi. Healthcare is also towards the bottom of the pile, hampered by Argenx (-16.1%) which slumped at the open following news that topline results from the ADVANCE-SC study of VYVGART Hytrulo did not meet primary or secondary endpoints. Over to individual movers, Rolls-Royce (+6.6%) is driving into the green following after announcing new mid-term financial targets. Over to airliners, easyJet (+2.3%) shares are firmer after beating on its results and expect positive growth; Ryanair (+1.7%) are also benefitting from easyJet’s positive release.


• Asia-Pac stocks traded mixed heading closer to month-end amid the lower yield environment and after the lacklustre performance of US counterparts. ASX 200 (+0.4%) was higher with early outperformance on softer yields and following a break above the 7,000 level although the index finished off intraday highs following a surprise contraction in Retail Sales data. Nikkei 225 (-0.1%) failed to hold on to its opening gains and was pressured as a firmer currency paved the way for profit-taking. Hang Seng (-0.8%) and Shanghai Comp. (+0.2%) were mixed despite recent support pledges by the PBoC as a report also suggested that China’s property lifeline exposes banks to large losses and job reductions.


• US equity futures (ES -0.1%, NQ -0.2%, RTY Unch.) are trading with a downward bias, continuing the losses seen in yesterday’s session, with a slight underperformance in the Nasdaq 100. The docket ahead is much busier than European counterparts, with US Home Price data, Caseshiller, Richmond Fed Index and Dallas Fed Services all on the agenda. Additionally, markets will keep an ear out for potential commentary from; Fed’s Goolsbee (2023 Voter, Dove), Waller (Voter, Hawk), Bowman (Voter, Hawk) and Barr (Voter, Neutral), with the Fed's Discount Rate minutes also due for release in the afternoon.

28 Nov 2023 - 09:59- Research Sheet- Source: Newsquawk