EUROPEAN EQUITY UPDATE: Stocks on track to close the week out with gains as traders eye big bank earnings

Analysis details (09:25)

• European equities (Stoxx 600 +0.4%) trade with tentative gains ahead of another risk-packed session with the Stoxx 600 on track to close the week out with gains of around 1.5%.


• The overnight session did not have any major catalysts to sway trading direction with gains in Europe seemingly more of a catch-up to the upside on Wall Street in the US afternoon.


• US equity futures (ES -0.2%, NQ -0.2% and RTY -0.2%) are a touch below neutral following yesterday’s solid showing for the cash markets. US big banks (JPM, WFC, C) will today begin reporting Q1 results, and in addition to the usual focus on the top- and bottom-lines, there will be a great deal of attention centring around commentary on deposits, loan loss provisions, as well as economic outlooks. There is also the US retail sales report for March, which is expected to slip again, as well as prelim. University of Michigan sentiment data for April, where there will be attention on the inflation expectations measures.


• Equity sectors in Europe have a mostly positive tilt with Real Estate the standout outperformer, followed by Health Care and Autos, whilst Insurance and Energy names lag to the downside.


• Dechra Pharmaceuticals (+43%) has seen significant upside after the Co. and EQT AB confirmed they have entered discussions for a potential takeover of Dechra whereby Dechra would receive GBP 40.70/shr vs. Thursday’s close of GBP 27.33/shr. Hermes (+0.9%) are firmer but off best levels post-Q1 results which saw the Co. exceed sales estimates and note increasing store traffic and good growth momentum in China. Julius Baer (+2%) has benefited from a broker upgrade at Barclays with analysts of the view that the Co. could benefit from complications in the process of UBS integrating Credit Suisse. Finally, Alstom (-4.5%) sits at the foot of the Stoxx 600 after news that its CFO is to join Orange as CEO.

14 Apr 2023 - 09:25- EquitiesEU Research- Source: Newsquawk