EUROPEAN EQUITY UPDATE: Stocks mixed, whilst Credit Suisse sinks

Analysis details (09:31)

European equities trade mixed (Eurostoxx 50 -0.4%, FTSE 100 +0.4%) in what has been a session dictated by large-cap earnings as incremental macro drivers remain light ahead of the ECB announcement later today. On which, policymakers are set to pull the trigger on a 75bps hike with traders mindful of any measures to address excess liquidity in the Eurozone and commentary on QT. Participants will be eyeing the announcement for any signs of potential dovish takeaways given the smaller-than-expected hike from the BoC yesterday and ongoing hopes for a Fed pause following reporting from the WSJ last week. Stateside, US equity futures are holding up (ES +0.2%, NQ Unch. RTY +0.4%) despite earnings disappointment from Meta Platforms (META - revenues generally in line, profits missed, costs were notable, guidance was soft, metaverse is sucking in money). Earnings-wise, it is another busy slate, with LIN, MRK, CAT, HON, CMCSA, MCD, SPGI, MA, INTC, AMZN, TMUS, AAPL all set to report today. On the data front, today sees the release of the advanced GDP report for Q3, which is expected to reveal 2.4% growth in Q3, bouncing back from the contraction of 0.6% in Q2; as always, traders will be carefully watching the PCE metrics within the release (NOTE: tomorrow will see the release of September personal income, spending, PCE and core PCE). Sectors in Europe are mixed and diverging on account of the slew of earnings releases today. To the upside, Energy names are the clear outperformer after encouraging earnings from TotalEnergies (+2.3%) and Shell (+3.7%) with the latter top of and supporting the FTSE 100. To the downside, Tech names lag, following a similar performance Stateside amid disappointing large cap earnings with STMicroelectronics (-5.2%) adding to the woes for the sector and dragging other chip names lower after flagging a Q4 growth slowdown. Basic Resources names are also on the backfoot with Anglo American (-2%) a notable laggard following its Q3 production update. Credit Suisse (-11.8%) is the worst performer in the Stoxx 600 after posting a CHF 4bln loss in Q3 which has prompted the Co. to announce a capital increase of a similar magnitude. Furthermore, the Co. sees restructuring charges and impairments of CHF 2.9bln until 2024 and announce a 5% workforce reduction underway in Q4 202. Elsewhere, post-earnings gainers include the likes of Foxtons (+12%), Carrefour (+6.2%), AB Inbev (+5.5%), Daimler Trucks (+2.9%), whilst notable losers include Volvo Cars (-6.7%), Moncler (-5.5%), Schneider Electric (-4.1%), Clariant (-2.5%), Beiersdorf (-2.5%) and Lloyds (-1.3%).

27 Oct 2022 - 09:30- EquitiesResearch Sheet- Source: Newsquawk