EUROPEAN EQUITY UPDATE: Stocks wane off highs ahead of FOMC Minutes and NVIDIA earnings

Analysis details (10:01)

• European equities (Eurostoxx 50 -0.1%) trade marginally lower, overall lacking a firm direction amid a catalyst-thin docket and light newsflow, though the FTSE100 (-0.5%) is the clear underperformer, which can be attributed to the stronger Pound and losses in oil majors. In terms of the day ahead, there are no notable data releases, though the markets will take note of the BoE’s Treasury Select Hearing for the November Policy Report ahead of the FOMC minutes after the European close. 


• European equity sectors are mixed with slight outperformance in Retail and Food Beverage and Tobacco, with the former propped up by broker upgrades at Deutsche Bank across several UK Retail names, including Asos (+2.1%) and Marks & Spencer (+0.6%). Analysts at the bank have noted that “the sector has been strong (+25% YTD) … and Christmas trading is likely to be robust”. To the downside, Telecommunications is at the foot of the sectors alongside Energy and Banks. In terms of stock specifics, the major story came out of German-listed MorphoSys (-24.6%) which slumped despite announcing that the Phase 3 study of Pelabresib in Myelofibrosis demonstrates statistically significant Improvement in spleen volume Reduction and a strong positive trend in symptom reduction. A conference call is to be held today at 12:00 GMT / 08:00 ET. To the upside, Sonova (+6.3%) is extending gains after the Co. beat on its earnings results and Rheinmetall (+4.1%) is benefitting from the announcement that a share buyback remains on the agenda.


• Asia-Pac stocks traded mostly higher following the tech-led gains in the US where Microsoft shares climbed to a record high in otherwise quiet trade and with Chinese markets underpinned by property sector support. ASX 200 (+0.3%) was kept afloat as strength in the mining and materials sectors atoned for the slack in tech and defensives but with gains limited after the hawkish undertones from the RBA Minutes. Nikkei 225 (-0.1%) lacked firm direction with price action choppy as headwinds from recent JPY strength were counterbalanced by a decline in JGB yields. Hang Seng (-0.2%) and Shanghai Comp. (Unch.) were initially underpinned by support-related optimism in which the Hong Kong benchmark was led by property stocks to briefly above the 18,000 level after reports that China is drafting a "whitelist" of 50 developers for a financing boost. Ultimately, this was not enough, and the markets faded gains later in the session.


• US equity futures (ES -0.1%, NQ -0.1%, RTY -0.3%) are teetering around the unchanged mark, though with a slight negative tilt, giving back some of the prior day gains. The docket for today includes US Philly Non-manufacturing Business Outlook Survey, US National Activity Index and traders will also be cognizant of Canadian CPI. Ultimately, markets will await the FOMC Minutes (November) due at 19:00 GMT / 14:00 ET. Away from the key event, equity traders will await earnings from Lowe's, NVIDIA Corp, Analog Devices, Best Buy Co, and Autodesk Inc.

21 Nov 2023 - 10:11- Fixed IncomeEU Research- Source: Newsquawk