EUROPEAN EQUITY UPDATE: Stocks subdued amid trade tensions and poor Alphabet earnings

STOXX 600: -0.2%

• European bourses began the session with a clear downward bias, and have traded sideways at subdued levels throughout the morning.


• The European docket today has included EZ Final PMIs, which were overall mixed and did not deviate too much from the Flash metrics. The accompanying report for the EZ figure noted that, “Costs in the services sector rose at a faster rate in January…This isn't great news for the ECB, which is monitoring inflation in the service sector very closely, as it's proving to be very stubborn”.


• The ECB Wage Tracker was also released today; the 2025 Estimate was a little a higher than the prior estimate at 3.256% (prev. 3.2%).


• Ahead, ECB's Lane is due to speak.

Sectors: Negative

• European sectors began the session with a negative bias, and sentiment continues to remain downbeat.


• Healthcare tops the pile, lifted by post-earning strength in Novo Nordisk (+3.6%); the Co. shot higher at the open, rising as much as 6.5%, but has since pared some of the early upside. The Co. beat across its headline metrics, but its Wegovy sales fell a little short; other drugs saw strong growth. The co. also highlighted that it “sees intensifying competition and continued pricing pressures within diabetes and obesity care”. Elsewhere, GSK (+5%) also reported its FY results, delivering strong performance and launched a GBP 2bln share buyback, while also upgrading its forecasts.


• Banks find themselves in second play; buoyed by post-earning strength in Credit Agricole (+2.4%) and Santander (+5.8%). The former beat on headline metrics and raised its dividends, and the latter saw its profits exceed targets.


• On Energy; Equinor (-1%) slips a touch after its results; the energy giant missed on its top- and bottom lines; a new USD 5bln share buyback failed to boost sentiment. As for French oil giant TotalEnergies (-1.5%), the Co. reported a beat on its headline metrics and lifted its FY24 dividend by 7% Y/Y. The dip in shares could be attributed to the co. forecasting a smaller-than-expected Namibia project.


• Autos and Parts has parked itself right at the bottom of the pile, with losses driven by downside in Renault after it was reported overnight that the Nissan/Honda merger could collapse; recent sources suggest the deal has been scrapped. The French automaker holds a 17% stake in Nissan.

Majors: FTSE 100 -0.1%, IBEX 35 +1%, DAX 40 -0.4%

• The FTSE 100 is a little lower today, with losses to a slightly lesser magnitude vs peers. GSK tops the pile, post-earnings (discussed above); Fresnillio surges as gold continues to make fresh ATHs.


• IBEX 35 is the clear outperformer in Europe today, boosted by considerably strong results in Santander (discussed above).

US Equity Futures: ES -0.6%, NQ -1%, RTY U/C

• Futures are in the red, with clear underperformance in the tech-heavy NQ after Google’s (-7%) Q4 results; the Co. missed on Revenue expectations, as cloud growth slowed. Further for the index, AMD (-8.5%) tumbles; the Co. topped analyst expectations and highlighted strong AI-driven growth, but data centres sales missed.


• The US Day sees the release of ADP jobs data for January (expected at +150k vs the prior +122k); there will also be focus on the wages measure in December, the median change in annual pay for job-stayers eased to 4.6% from 4.8%, while for job-changers it eased to 7.1% from 7.2%. Elsewhere, US international trade stats for December, ISM Services (54.3 expected vs the prior 54.0). A few Fed speakers are also due.

05 Feb 2025 - 09:55- EquitiesData- Source: Newsquawk