EUROPEAN EQUITY UPDATE: Stocks lack direction in a busy morning for earnings

Analysis details (09:30)

• European equities (Eurostoxx 50 +0.1%) trade with little in the way of firm direction after opening losses were trimmed in what has been an exceptionally busy morning for earnings.


• The handover from APAC was a mixed one with most major indices cautious amid the banking sector headwinds in the US and as participants digested a deluge of earnings releases and performance updates. US equity futures are in the green, but the Nasdaq-100 (+0.8% vs. ES +0.4%) is doing the heavy lifting after earnings from Meta Platforms (META) provided further reassurances about the resilience of Big Tech names, where its user stats and advertising metrics topped expectations. Anxiety surrounding the banking sector continues after FRC’s share price continued to slide on Wednesday, as an exit from its troubles increasingly appears to be elusive. There are further earnings reports from globally significant companies due today (CAT, MA, AMZN, INTC, for instance), but traders will also be focussing on macro dynamics, with the advanced release of US Q1 GDP, as well as weekly initial jobless claims data.


• Equity sectors in Europe are mixed with Autos & Parts top of the leaderboard alongside post-earnings gains in Michelin (+1.9%) which saw the Co. flag a potential improvement in raw material and transportation costs in H2, whilst Continental’s (+1.9%) board has extended the Co.’s mandate for another five years and Hella provided favourable commentary for the sector. Elsewhere, Personal Care, Drug & Grocery names have been supported by earnings from Unilever (+1.6%) after the Co. reported better than expected sales figures. To the downside, Media names are notably lower following poorly received earnings reports from Universal Music Group (-5.5%) and WPP (-2.2%). The Financial Services sector is also on the backfoot with Deutsche Boerse (-6.9%) a notable laggard alongside earnings and news that the Co. has offered to acquire SimCorp (+38%) for DKK 735/shr in cash (vs yesterday's DKK 529 close); the sector is also hampered by earnings-induced downside from St James Place (-5.1%). Elsewhere, the Chemicals and Energy sectors are being dragged lower by post-earnings pressure in BASF (-3.7%) and TotalEnergies (-1%) respectively with the Energy sector also catching up to yesterday’s crude losses. Other notable earnings releases today have included Barclays (+4.3%) which sits at the top of the FTSE 100 after reporting beats for revenues and profits. Also in the Banking sector, Deutsche Bank (+1.7%) is another gainer after Q1 results provided beats for revenues and net income. In the Health Care sector heavyweights AstraZeneca (+0.3%) and Sanofi (+0.2%) both came to market with earnings but failed to hold on to the bulk of their opening gains. Finally, Tech names have been hampered by post-results losses in STMicroelectronics (-7%), which have weighed on the likes of Infineon (-4.4%) and AMS Osram (-2.5%).

27 Apr 2023 - 09:30- EquitiesData- Source: Newsquawk