EUROPEAN EQUITY UPDATE: Stocks slightly firmer, ES remains capped by 4k

Analysis details (09:35)

European equities (Eurostoxx 50 +0.2%) trade with modest gains in what has been a quiet start to the week from a macro perspective ahead of upcoming PMI releases on Tuesday. The handover from the APAC region was a limited one, with stocks firmer but gains capped amid mass closures for the Lunar New Year holidays. Stateside, US futures (ES -0.1%, NQ -0.1%, RTY -0.1%) are marginally softer with the ES currently unable to make a test of 4k to the upside. The Fed is now in its pre-meeting blackout window ahead of the February 1st confab, where money markets price a 25bps rate hike. With the Fed in the quiet period, focus should fall on large-cap earnings in the US. Bank of America notes that 14% of S&P 500 companies have published Q4 earnings numbers so far, and they have reported a 1% miss vs a historical 50bps beat post week one. The bank notes that this week will be the second busiest of this earnings season, with 25% of earnings due, with 30%+ of Industrials, Tech, and Materials earnings reports due to be published. Meanwhile, Morgan Stanley's strategist Michael Wilson on the weekend reiterated his view that while many investors are still fundamentally bearish and questioning whether negative fundamentals have already been priced into stocks, Morgan Stanley still thinks the path of US earnings will disappoint both consensus expectations and current valuations. Sectors in Europe have a slight positive bias with Tech stocks top of the leaderboard following the strong showing on Friday. Basic Resource names are also supported, whilst Chemicals and Travel & Leisure lag. Atos (+4.6%) is a strong performer in Europe following talk that Astek has notified the Co. of interest in Evidian, its cyber security unit. To the downside, Symrise (-3.6%) sits at the foot of the Stoxx 600 post-prelim. FY 22 results, whilst St James Place (-2.8%) have been hampered by a broker downgrade at HSBC.

23 Jan 2023 - 09:35- EquitiesData- Source: Newsquawk