EUROPEAN EQUITY UPDATE: Stocks struggle for direction as UK statement looms

Analysis details (09:30)

Stocks in Europe (Eurostoxx 50 +0.2%) are on a mixed footing after scaling back opening gains with no clear fundamental catalyst driving price action thus far. The session follows on from a mostly despondent APAC performance with Chinese equities hampered by mainland COVID cases rising at their fastest pace since April, whilst the situation in Japan is also of concern after reports stated that Tokyo is to increase its COVID alert level by one notch amid the recent increase in COVID cases. Stateside, US futures have similarly scaled back initial upside (ES +0.1%, NQ +0.2%, RTY -0.1%) with the ES back below the 4k mark after venturing as high as 4015.75 with the WTD peak at 4050.75. The US day sees weekly initial jobless claims data, housing starts and building permits for October, the Philly Fed regional manufacturing survey for November (recall, the Empire Fed equivalent was a positive surprise this week). The Fed speakers’ slate is busy, with voters Bullard, Bowman, Mester to speak, as well as 2023 voter Kashkari and 2024 voter Bostic. Sectors in Europe are mixed with modest outperformance seen in Real Estate and Food Beverage and Tobacco names, whilst Basic Resource names are weighed on by underlying prices. HSBC has released a slew of sector-wide/national ratings across Europe whereby it upgraded Technology to overweight from underweight, upgraded Financials to overweight from neutral, upgraded UK Travel & Leisure to overweight from underweight, downgraded UK to neutral from overweight, upgraded Germany to overweight from neutral. Siemens (+7.1%) is top of the Stoxx 600 and propping up the DAX (+0.4%) after the Co. reported stronger-than-expected earnings and a record backlog of earnings. Elsewhere, Thyssenkrupp (-0.8%) is marginally softer after noting that 2023 sales will “probably nosedive”, whilst Burberry shares are relatively flat post H1 earnings in which the Co. observed a trend of US customers taking advantage of the firmer USD by shopping in Europe.

17 Nov 2022 - 09:30- Research Sheet- Source: Newsquawk