EUROPEAN EQUITY UPDATE: Stocks wane off best levels ahead of a busy CB speakers agenda

Analysis details (09:48)

Stocks in Europe are on a mostly firmer footing this morning with APAC also closing largely in the green as the global equities attempt to claw back losses seen across recent sessions, ahead of a busy central bank speakers docket. US equity futures are off highs but still trading with gains in excess of 1% across the board (at the time of writing) with the cyclically-led RTY (+1.6%) narrowly outperforming the ES (+1.3%), RTY (1.4%), and YM (+1.3%). In terms of house views, analysts at Goldman Sachs and BlackRock are turning more bearish on equities in the short-term, suggesting that markets have not yet priced in the risk of recession, whilst rising real yields remain a major headwind. GS cut equities to underweight in its global allocation over the next three months and remains overweight cash, whilst BlackRock recommends “shunning most stocks”, and leans towards credit in the short term. Back to the session, bourses are predominantly in the green but off best levels (Euro Stoxx 50 +0.8%; Stoxx 600 +0.8%) with the FTSE 100 (+0.2%) posting shallower gains amid a revival in the Pound, whilst the Italian FTSE MIB (-0.1%) underperforms following outperformance yesterday. Sectors are mostly positive with no overarching theme. Travel & Leisure, Tech and Basic Resources sit as the current winners, Tech amid a pullback in yields whilst Basic Resources cheer the Dollar-induced gains across base metals. On the downside, Real Estate sits as the laggard with UK homebuilders all towards the bottom of the FTSE 100 following reports Banks alongside building societies removed several mortgage deals from sale yesterday whilst homeowners attempted to secure fixed rates amid fears of rising rates. Utility names are also subdued whilst Nord Stream said it has detected damage at three lines of the Nord Stream gas pipeline system and added that damages are unprecedented and is impossible to estimate when gas transportation infrastructure will be restored. In terms of some individual movers, Akzo Nobel (-1.5%) is pressured after cutting its Q3 adj. operating guidance, although the firm said current demand trends are expected to be translated to Q4. Balfour Beatty (+1.0%) posts gains as it has been appointed as sole contractor to Scape Civil Engineering frameworks worth up to a combined value of GBP 4bln. In the retail space, Adidas (-1.0%), Kering (-1.3%), and Hugo Boss (-1.8%) post losses on the back of downgrades at Goldman Sachs, Barclays, and Deutsche Bank respectively. 

27 Sep 2022 - 09:51- Research Sheet- Source: Newsquawk