EUROPEAN EQUITY UPDATE: Stocks pause for breath as markets await NATO update

Analysis details (09:35)

European equities (Eurostoxx 50 -0.2%) trade with a mild negative bias as the recent rally in stocks pauses for breath. The session follows on from a soft APAC lead as markets digested the latest geopolitical updates. On which, US officials said initial findings suggest the missile that hit Poland was fired by Ukrainian forces at an incoming Russian missile, according to AP. NATO is currently engaging in an emergency meeting to discuss the matter with SecGen Stoltenberg to hold a presser at 11:30GMT/06:30ET. Stateside, US futures are marginally firmer (ES +0.1%, NQ +0.1%, RTY +0.1%) with the ES just about maintaining 4k status after advancing as high as 4050.75 post-US PPI yesterday. Today’s data docket sees the release of the US October Retail Sales report whereby analysts expect a 1.0% M/M increase vs 0.0% in September whilst the Control Group is seen rising 0.3% (prev. 0.4%). Ahead of the release, CS writes “High-frequency card spending data suggest consumer spending remained solid in October”. Today’s Fedspeak features Fed’s Williams (voter), Barr (voter), and Waller (voter). Earnings include LOW, TGT, TJX, CSCO, NVDA. Back to Europe, analysts at Citi have cautioned that European earnings are likely to be subject to further earnings downgrades in Q4 with 2023 estimates still too high. Sectors in Europe are currently mostly lower with Autos and Real Estate lagging peers with the latter hampered by angst over the UK housing market as a hot UK CPI report places further pressure on the BoE to carry on with aggressive monetary tightening. To the upside, Energy names outperform following yesterday’s geopolitical-inspired gains in the complex after the European cash close with Defence names also supported (Thales +3.3%, BAE Systems +3.5%) by events near the Polish border. In terms of individual movers, Siemens Energy (+4.7%) is one of the best performers in the region and top of the DAX after reporting better-than-expected Q4 sales with markets seemingly looking-through a widening net loss and no dividend for 2022. Elsewhere, Alstom (+2.6%) is near the top of the CAC post H1 results with Sage Group (+6.1%) benefiting from an earnings tailwind with the Co. the best performer in the FTSE 100. Finally, Zurich Insurance (+2.1%) leads the SMI after outlining “ambitious” new targets for 2023-2025.

16 Nov 2022 - 09:35- EnergyData- Source: Newsquawk