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.

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