EUROPEAN EQUITY UPDATE: Stocks steady as summer trading persists

Analysis details (09:50)

Stocks in Europe (Eurostoxx 50 -0.1%) are trading mixed/flat with little in the way of fresh incremental newsflow to provide equities with any impetus during the ongoing “summer lull”. Stocks in the region have been unable to benefit from the positivity observed overnight in the APAC region with focus remaining on newsflow out of China following the PBoC rate cut earlier in the week whilst reports overnight noted that Chinese Premier Li told top provincial officials that they must have a sense of urgency to consolidate the economic recovery and reiterated the nation is to step up macro policies. Stateside, futures are trading on the backfoot (ES -0.3%, NQ -0.4%, RTY -0.2%) following a mixed close yesterday which saw technicals in focus after the E-mini S&P briefly eclipsed its 200DMA (4317) for the first time since April although failed to hold above the key level (currently 4296). From a macro perspective, today’s docket sees US retail sales and FOMC minutes with the latter expected to detail the Fed's break away from forward guidance whilst traders will be eyeing any potential clues on the rate path and terminal rate. The pre-market earnings pipeline sees further reports from retailers, this time from Lowe’s (LOW), Target (TGT) and TJX Companies (TJX) with Analog Devices (ADI) also due on the docket. Sectors in Europe are a mixed bag with Food Beverage and Tobacco the notable outperformer following post-earnings gains in Carlsberg (+3.5%) after the Co. reported better-than-expected earnings despite rising costs. To the downside, Real Estate names lag with Persimmon (-1.9%) a notable laggard in the sector post-H1 earnings. Elsewhere, the Health Care sector has been in the spotlight following the voluntary dismissal of the claim in the first scheduled Zantac trial which saw GSK (-1.3%) pay nothing in return for the dismissal. Despite the outcome being a positive for the Co., it remains to be seen whether this is indicative of future lawsuits which will inevitably arise. This is of note for the likes of Haleon (-2.8%) and Sanofi (-4.8%) with the latter also hampered by news that the Co. has ended trials for one of its key cancer therapies. Finally, Uniper (-7.5%) sits at the bottom of the Stoxx 600 following a woeful H1 earnings release which saw the Co. Report an IFRS net loss in excess of EUR 12bln and forecast negative earnings for FY23.

17 Aug 2022 - 09:50- - Source: Newsquawk