EUROPEAN EQUITY UPDATE: Stocks soft but on track to see the week out near unch.

Analysis details (09:45)

• European equities (Stoxx 600 -0.8%) trade on the backfoot as the region catches up to the selling pressure on Wall St with the Stoxx 600 on track to close the week out pretty much where it started out in what has been a week characterised by a lack of incremental macro updates for the region. Equity sectors have a negative tilt with the Food, Beverage and Tobacco sector lagging peers after Diageo (-11.7%) cut its H1 FY24 revenue and profit guidance due to a weaker performance outlook in Latin America and the Caribbean; the likes of Remy Cointreau (-3.9%) and Pernod Ricard (-3.9%) are lower in sympathy. Elsewhere, the Consumer Products and Services names are also suffering following post-earnings declines in Richemont (-5.4%) with the Co. noting that slowing economic growth and geopolitical tensions have weighed on performance; Swatch (-4.9%) are lower in sympathy. In the Real Estate sector SBB (-4.9%) has drawn attention with the Co. Lower on the session after reports that it is facing a bond repayment demand from Fir Tree Partners. Other notable post-earnings movers include the likes of GN Store Nord (+10.7%) Leonardo (+2.5%), Allianz (+2.4%), BPost (+1.3%), Scor (-8.8%)


• APAC stocks traded lower across the board as the downbeat sentiment from Wall Street reverberated to the region following the poor 30-year US auction coupled with Powell’s hawkish lean. ASX 200 (-0.6%) initially saw the shallowest losses among the majors as the RBA’s SoMP suggested the economy had been a bit stronger than previously thought, while sectoral losses were led by Tech, Financials, and Energy although Metal and Mining bucked the trend. Nikkei 225 (-0.2%) was dragged lower by hefty post-earnings losses in Nissan, Sony, and Softbank, which were all lower by 3-6%, although the index later clambered off worst levels and rose back above 32,500. Hang Seng (-1.9%) and Shanghai Comp (-0.5%) conformed to the tone but Hong Kong was the regional underperformer with Tech and Financials, among the biggest losers.


• US equity futures (ES -0.1%, NQ -0.3%, RTY +0.2%) are trading slightly weaker, with the Russell modestly outperforming following significant losses in yesterday's session. The highlight of the session yesterday was Fed Chair Powell’s speech, who left the door open for future rate hikes (and climate activists) and overall leant hawkishly, sending the markets to spiral lower. Back to today, the docket is light, with the only notable release coming in the form of UoM Inflation Prelims, with the most recent 1-year ahead expectations jumping to 4.2% (prev. 3.8%). Additionally, markets will keep a keen eye out for Fed speak from Logan (2023 Voter, Hawk) and Bostic (2024 Voter, Dove).

10 Nov 2023 - 09:45- Research Sheet- Source: Newsquawk