EUROPEAN EQUITY UPDATE: Stocks on a firm footing whilst earnings pick up in pace

STOXX 600: +0.7%

• European bourses began the session modestly firmer across the board, and continued to climb higher as the morning progressed.


• The EZ docket thus far has included German Industrial Orders, which considerably surpassed expectations; EZ Construction PMIs generally improved from the prior (with the exception of Italy). As for the UK, its metrics missed expectations and fell sharply into contractionary territory; the inner release highlighted that the figure fell due to “gloomy economic prospects, elevated borrowing costs and weak client confidence resulted in subdued workloads”. Thereafter, EZ Retail Sales M/M printed just shy of expectations whilst the Y/Y figure was in-line.


• The EZ docket ahead is light. Focus will be on the UK, and particularly the BoE; the Bank is expected to cut rates by 25bps, in an 8-1 vote split – hawkish dissent via Mann. The accompanying projections in the MPR will be a focal point for traders. (Full preview can be found in the Newsquawk Research Suite)

Sectors: Positive

• European sectors hold a strong positive bias, with only a couple of industries in the red, of which, are posting minimal losses.


• Basic Resources is the clear outperformer in Europe today, lifted by the mostly positive price action in metals prices; 3M LME Copper +0.9%. Further to this, Anglo American (+4.5%) edges higher after its Q4 Production Report; copper production slumped, but still beat estimates.


• Banks are found in the second sectorial spot, lifted by the relatively higher yield environment (which is seemingly a paring from the downside seen in last few sessions) and in a continuation of the gains seen in the prior day, led by strength in Santander after its results. Sentiment today has also been lifted by post-earning upside in BMPS (+1.9%), where it beat profit estimates.


• Healthcare also marches higher, continuing to build on the post-earning strength in GSK and Novo Nordisk, with the upside today led by AstraZeneca (+4.9%); the co. saw its profits surge despite the ongoing China troubles.


• Unsurprisingly, Real Estate finds itself at the foot of the pile given the currently higher yield environment. Consumer Products is flat/modestly lower, with losses driven by Kering (-2.5%) after it ends its collaboration with the Gucci Design Chief.

Individual Movers:

• Maersk (+8.5%) edges higher after it beat on Q4 metrics, but does see weaker results in 2025. On the Red Sea, it noted that there is much uncertainty but assumed that operations will re-open mid-year.


• Volvo Car (-9.5%) sank at the open and continued to edge lower after the co. reported its metrics, Q4 declined, whilst FY beat; it beat on Revenue figure, but noted that it expects market to remain weak in 2025 due to a multitude of competitive and geopolitical challenges.


• Pernod Ricard (+2.5%) edges higher despite cutting its sales forecast on poor outlook in China.

US Equity Futures: ES +0.2%, NQ +0.2%, RTY +0.2%

• Futures are modestly firmer across the board, continuing to build on the prior day’s gains. In terms of pre-market movers; Arm (-5%, narrowed FY outlook), Ford (-4.5%, EV losses surge), Qualcomm (-4%, licensing forecasts disappointed).


• The US Day sees the release of weekly initial jobless claims (213k expected vs the prior 207k), while continuing claims are seen rising to 1.874mln from 1.858mln; neither coincide with the Friday BLS jobs data. Challenger job cuts data will also be released.

06 Feb 2025 - 10:25- MetalsData- Source: Newsquawk