EUROPEAN EQUITY UPDATE: Stocks tentative ahead of Trump-Xi phone call

STOXX 600: -0.3%

European bourses began the day mixed, and traded modestly on either side of the unchanged mark, despite a mostly positive APAC session.
Price action today has been very choppy, with sentiment initially slipping into the morning, before bouncing back to display a mixed picture in Europe.
The European docket has been light thus far, and the docket remains thin for the remainder of the day, aside from an appearance from ECB’s Villeroy.
Ahead, all eyes are on the Trump-Xi call (Time TBC). Traders will be eyeing the tone of the call alongside any future negotiations and updates on levies imposed by both sides.

Sectors: Negative

European sectors hold a slight negative bias, with only a handful of industries holding in the green.
Tech is outperforming today, as it pares back some of the significant Trump-induced losses seen in the prior day. The sector has been propped up by strength in Infineon (+10%), which soared at the open after it reported strong headline metrics and lifted its Q1 guidance above expectations. On the other hand, Siltronic (-15%) slipped at the open, after it cut dividends due to weak demand.
Financial Services underperforms today, weighed on by losses in UBS (-4.3%); the Swiss bank reported a Q4 profit beat and a USD 3bln share buyback. The stock did initially open higher, but succumbed to selling pressure soon after.

Majors: FTSE 100 -0.3%, CAC 40 U/C, DAX U/C

The FTSE 100 is on the backfoot, with losses to a larger magnitude vs peers. Vodafone (-6.2%) sits at the foot of the pile, despite reporting headline beats and reiterating its FY25 guidance; negative sentiment stems from the co. reporting a 6.4% decline in German sales; its CEO noted that recovery will take some time. Elsewhere, Diageo (-4%) slipped at the open after the co. reported strong results but withdrew its mid-term guidance citing macro/geopolitical uncertainty.
The CAC 40 trades around the unchanged mark; BNP Paribas (+2.7%) tops the pile after the co. topped analyst expectations and announced a EUR 1.08bln share buyback. Dassault Systemes (-0.5%) finds itself marginally lower after the co. reported in-line EPS but slightly lower Revenue figures; its Q1 guidance also missed consensus views. As for sectoral movers; STMicroelectronics (+2.3%) gains in tandem with Infineon, whilst Pernod Ricard (-2.4%) moves lower following Diageo results (discussed earlier).

US Equity Futures: ES -0.2%, NQ -0.1%, RTY -0.2%

Futures are modestly lower across the board, in tandem with the losses seen in Europe and in a continuation of the downside seen in the prior session. In terms of pre-market movers; Palantir’s earnings exceeded expectations on AI growth, seeing its stock rise over 17.5% in the pre-market. NXP Semiconductors (+2.3%) topped Q4 metrics, but offered soft guidance for Q1.
The US Day features US JOLTS job openings data, which are expected to print 8.0mln in December (prev. 8.098mln); there will also be attention on the quits rate (prev. 1.9%), and the vacancy rate (prev. 4.8%). US RCM/TIPP economic optimism data will be published. US factory orders are seen falling by -0.7% M/M in December (prev. -0.4%), while revisions to Durable Goods data for the month are also due. Fed’s Daly and Bostic also due.
Earnings include; AMD, Google, Snapchat, Chipotle, Amgen, Paypal, Spotify, Pfizer, Regeneron, PepsiCo, Merck, Estee Lauder, Marathon Petroleum.