EUROPEAN EQUITY UPDATE: Stocks solid at the start of the week as NFP looms large

STOXX 600 +0.2%, DAX +0.1%, CAC +0.1%, FTSE 100 +0.5%, FTSE MIB -0.4%, IBEX 35 -0.1%, SMI +0.5%

• European bourses have kicked the week off on a mostly constructive footing aside from some softness in the periphery. Incremental macro drivers for the Eurozone are lacking and this may remain the case this week, unless Eurozone inflation prints markedly out of line vs. the consensus. As such, direction is likely to be gleaned by gyrations in the US equity market given the busy data docket stateside (see US section for details). For today's European agenda, ECB’s Muller, Kazaks, Schnabel and Lane are due to give remarks.

Sectors: Mostly firmer

• Basic Resource names stand top of the leaderboard amid strength in underlying metals prices. Other outperformers include Consumer Products & Services and Tech with the latter bolstered in a bounce back from Friday's selling pressure.


• To the downside, Banking names sit at the foot of leaderboard alongside the softer yield environment, whilst Energy names have been dragged lower by softness in underlying crude prices after Reuters sources reported that OPEC+ will likely raise oil production quotas by at least 137k bpd at its October 5th meeting.


• The Health Care sector has been aided by news that the White House will honour a 15% cap on pharmaceutical tariffs as part of trade deals with the EU and Japan, according to CNBC. However, some enthusiasm for UK names has been tempered by Reuters sources noting that Britain would face 100% tariffs on US pharmaceuticals under US President Trump’s latest plan. Note, it has been a very busy morning for pharma-specific updates (see below for details).

Individual News

• GSK (+3.1%) is the best performer in the FTSE 100 after news that Luke Miels has been appointed CEO designate and is to assume responsibilities from January.


• Ubisoft (+2.8%) is benefitting from the read across of news that Electronic Arts (EA) is nearing a circa USD 50bln deal to go private, WSJ.


• Deutsche Lufthansa (+1.8%) shares are higher after an update at its Capital Markets Day, which provided new medium-term financial targets for 2028-2030 and saw the Co. announce plans to reduce 4k administration jobs by 2030.


• AstraZeneca (+1.4%) are also higher after noting that it will harmonise its listing structure with a direct listing of shares on the NYSE in place of the existing US ADRs. Co. will continue to be listed, HQ and taxed within the UK.


• Novo Nordisk (-4%) shares have been hit after Morgan Stanley downgraded the Co. to Underweight from Equal Weight.


• Genmab (-2.9%) shares are on the back foot after news that it is to acquire Merus for USD 8bln.

US Equity Futures: ES +0.5%, NQ +0.6%, RTY +0.6%

• US equity futures are extending on Friday's upside heading into a week, packed with tier 1 US data points. This week's data docket will likely prove to be more pivotal for the USD given its focus on the labour market with JOLTS due tomorrow, ADP Wednesday, weekly claims on Thursday and NFP on Friday. Note, ISM manufacturing and services are also due this week. As it stands, markets assign an 89% chance of a 25bps cut next month with a total of 42bps of loosening seen by year-end.


• Fed speak is due today from Waller, Hammack, Musalem, Williams and Bostic but the market will likely be more focused on the aforementioned upcoming data prints. Note, on Capitol Hill, US President Trump will discuss the looming government shutdown with congressional leaders on Monday.


• In terms of notable newsflow, The Trump administration is weighing tariffs on foreign electronic devices based on chip count, potentially raising prices on items from laptops to toothbrushes, Reuters reports. Occidental (+1%) is in talks to sell its OxyChem unit in a deal valuing the business at a minimum of USD 10bln, FT reports. Goldman Sachs has raised price targets on Ford (F), GM (GM), Rivian (RIVN), Lear (LEA), BorgWarner (BWA), Magna (MGA), Gentex (GNTX), Visteon (VC), Sensata (ST), TE Connectivity (TEL), Amphenol (APH), Mobileye (MBLY), Vertiv (VRT); the bank’s analysts raised its 2025 US auto forecast to 16.2mln vehicles (prev. saw 15.75mln), and its 2026 view to 16.0mln units (prev. saw 15.5mln).

29 Sep 2025 - 10:05- EquitiesResearch Sheet- Source: Newsquawk