EUROPEAN EQUITY UPDATE: Stocks set to close the week out in the red

Analysis details (09:40)

• European equities (Stoxx 600 -0.4%) trade with modest downside as the Stoxx 600 is on track to close the week out with losses of around 1%. It’s once again been a busy morning of earnings for the region, however, macro updates have also seen a slew of national CPI releases in which French inflation data was firmer-than-expected, whilst Spain was softer. Ahead of the mainland release at 13:00BST, regional German prints have painted a picture of cooling inflation on both a M/M and Y/Y basis. ING notes that inflation for countries worth around 60% of the eurozone-wide print will be published today ahead of the full release on Tuesday.


• The handover from the APAC region was a positive one following yesterday’s rally on Wall St. where the S&P 500 and DJIA posted their best daily performance since January; as sentiment was fuelled by strong earnings results, while the region also digested a slew of earnings, month-end data releases and the BoJ policy decision.


• US equity futures have generally been drifting sideways overnight, following the gains on Thursday; though, in-fitting with European peers, performance has since tilted into the red, ES -0.3%. After-hours tech earnings were mixed; Amazon beat across the board, although the tone on call was more cautious, with execs noting a slowdown in AWS into Q2. Intel beat on top- and bottom-line expectations, rising almost 5.0% in afterhours trading. On the banking front, Reuters reports that US officials are said to have coordinated urgent rescue talks for First Republic Bank (FRC). The focus will likely shift to macro affairs today, with the release of PCE data for March and the ECI for Q1.


• Equity sectors in Europe are mixed with Banks in the region notably lagging peers alongside the pullback in yields and post-earnings downside for NatWest Group (-6.2%) after above-expected metrics were overshadowed by an outlook which saw guidance “stoke worries that the boost to margins from higher interest rates is starting to fade”, according to Bloomberg. Elsewhere, Basic Resources and Autos are also on the backfoot with the former weighed on by downside in underlying commodity prices and the latter hampered by losses in Mercedes-Benz Group (-1.8%) after the Co. failed to hold onto opening gains post-Q1 results. To the upside, Personal Care, Drug & Grocery and Media names modestly outperform peers.


• Elsewhere, Remy Cointreau (-8.2%) sits at the foot of the Stoxx 600 after providing a soft outlook alongside earnings, whilst Numis (+67%) shares are flying after news that Deutsche Bank has agreed to acquire the Co. for GBP 3.50/shr vs. Thursday’s close of GBP 2.04/shr.

28 Apr 2023 - 09:40- EquitiesEU Research- Source: Newsquawk