EUROPEAN EQUITY UPDATE: Stocks in Europe extend on impressive YTD gains

Analysis details (09:25)

European equities (Stoxx 600 +0.5%) trade higher once again with the Stoxx 600 set to close the week out with gains of just over 1.5% with YTD gains currently just north of 6%. Incremental macro updates for today’s session have been light following yesterday’s US CPI-induced gains which also helped to bolster sentiment overnight with the exception of Japan as the Nikkei 225 (-1.3%) continues to battle mounting hawkish expectations for the BoJ. Stateside, US futures are broadly flat (ES unch, NQ -0.1%, RTY +0.1%) with the ES just above the 4k mark after advancing to a high of 4021.5 during yesterday’s session. Events will pick up as US participants arrive and as corporate earnings season gets underway, with Blackrock (BLK), Bank of New York Mellon (BK), Bank of America (BAC), Citi (C), JPMorgan (JPM), Wells Fargo (WFC) all set to unveil Q4 numbers, while health care giant United Health (UNH) will also report. The University of Michigan's prelim January consumer confidence survey will be eyed, with particular focus on the inflation metrics, to see if consumers expectations on price pressures are also cooling. On the speakers front, Fed voters Williams, Kashkari and Harker will give remarks in wake of the December CPI data, which has crystalised expectations for a 25bps rate hike on February 1st. BofA's weekly flow data showed that global stocks saw USD 7.2bln of inflows, although US stock funds saw outflows of USD 2.6bln. Europe saw a 48th week of outflows at USD 0.5bln, Japan saw a sixth week of inflows at USD 1.1bln, EM stocks saw a fourth week of inflows at USD 2.2bln. Sectors in Europe are mostly firmer with outperformance in Banking, Health Care and Tech names whilst Autos are the standout laggard; the latter potentially pressured by reports that Tesla has cut some prices in Germany and the US by as much as 20%, according to Electrek. In terms of individual movers, United Internet (+3.6%) is firmer on the session after Reuters sources reported that its subsidiary wants to start the IPO process in January. ITV (+2.6%) has been bolstered by its ITVX launch which has driven a 55% increase in streaming viewing. Taylor Wimpey (+0.3%) is managing to tread water despite flagging that it entered the year with a lower order book vs recent years and expects overall volumes to reduce in 2023. To the downside, broker moves have weighed on the likes of Bouygues (-2.6%), Logitech (-2.6%) and Hugo Boss (-2%).

13 Jan 2023 - 09:25- Research Sheet- Source: Newsquawk