EUROPEAN EQUITY UPDATE: Stocks on track for a solid week of gains

Analysis details (09:35)

• European equities (Stoxx 600 +0.9%) trade on the front foot once again in what has been a solid week of returns for the region with the Stoxx 600 on track to close the week higher with gains in excess of 2% thanks in part to Tuesday’s soft US inflation metrics. For today’s session, macro highlights have included a disappointing outturn for UK retail sales and a slew of ECB commentary with known-hawk Holzmann stating “please don't think that this is the last rate hike and there won't be any more”. That being said, none of this has been enough to derail the broad positivity in stocks. Equity sectors in Europe are higher across the board with Health Care, Real Estate and Basic Resources top of the leaderboard. In terms of individual movers, Remy Cointreau (+4%) is the best performing stock in the Stoxx 600 thanks to a broker upgrade at Kepler Cheuvreux, whilst upgrades at SocGen and Barclays respectively have bolstered shares in Fresenius Medical Care (+2.5%) and NatWest (+1.7%). Aston Martin (+4.7%) shares are cheering the news that its F1 unit has received an investment from Arctos Partners, valuing the unit at GBP 1bln. Less encouragingly in the autos sector, Volvo Cars (-10.4%) is at the foot of the Stoxx 600 following reporting from Bloomberg that Geely is exploring the sale of about 100mln shares in the Co. (3.4% of all shares).


• Asia-Pac stocks traded mixed following the choppy performance stateside as yields declined and participants digested soft US data releases. ASX 200 (-0.1%) marginally declined with notable underperformance in the energy sector after oil prices slumped to their lowest since July although the downside in the index was cushioned by resilience in miners and defensives. Nikkei 225 (+0.5%) was indecisive amid a lack of fresh catalysts and after unsurprisingly balanced comments from BoJ Governor Ueda. Hang Seng (-1.9%) and Shanghai Comp. (+0.1%) were mixed, with the Hong Kong benchmark dragged lower by heavy losses in Alibaba after it scrapped its cloud business spinoff due to US chip restrictions and with energy names reeling from the tumble in oil prices.


• US equity futures (ES +0.2%, NQ +0.1%, RTY +0.8%) are trading on the front foot, with stocks being lifted by the recent surge in the fixed-income complex. Looking at how the markets performed over the week, S&P500 (+3.3%), Nasdaq (+4.0%) & Russell (+4.8%) all extended gains, largely attributed to the softer-than-expected CPI print on Tuesday. Back to today, the docket is lacklustre on the data front, with US Housing Starts the only release of note. Though markets will focus on several Fed speakers today, including; Barr (Neutral, Voter), Collins (Neutral, Non-Voter), Daly (Dovish, 2024 Voter) & Goolsbee (Dove, 2023 Voter). In terms of stock specifics, Applied Materials (AMAT, -6.9%) is extending losses in the pre-market following reports that the Co. is under US criminal investigation for potentially evading export curbs, according to Reuters. This is despite posting strong earnings and improving its revenue forward guidance. For those interested in the electric vehicle market, Chargepoint (CHPT, -29.7%) shares have slumped in the pre-market after significantly cutting its revenue guidance, citing overall macroeconomic conditions.

17 Nov 2023 - 09:35- EquitiesData- Source: Newsquawk