EUROPEAN EQUITY UPDATE: Trump trade threats hit European stocks

STOXX 600: Stoxx 600 -0.6%

• European bourses are lower across the board with downside attributed to US President-elect Trump vowing to impose new tariffs on Mexico, Canada, and China on the first day of his Presidency, targeting illegal immigration and drug smuggling; Trump plans a 25% tariff on goods from Mexico and Canada, and a 10% tariff on China, depending on their actions to curb smuggling, particularly of fentanyl. Analysts fear the measures could escalate tensions with these trading partners and disrupt global supply chains.

Sectors: All negative

• All lower with Autos bottom of the pile - although Trump didn't mention the EU in his remarks, his robust stance on tariffs is indicative of a tough global trade environment, to which autos (Stellantis -4.6%) are particularly sensitive to. Retail names are also lower with H&M (-1.1%) a laggard within the group following a broker downgrade at RBC. Elsewhere, Basic Resource names are giving back some of yesterday's gains given concerns around China.

European Indices: DAX -0.6%; FTSE 100 -0.4%; CAC -0.7%, FTSE MIB -0.7%, IBEX 35 -0.8%

• Selling in Europe is relatively broad-based. In the FTSE 100, laggards include Compass Group (-0.8%) following its FY update, whilst Diageo (-2.6%) are lower given the trade-sensitivity of alcohol names.


• Banco BPM (+0.8%) is enduring another session of gains as the takeover interest from UniCredit continues to dominate. In terms of the latest, the bid has reportedly "upset" the Banco BPM HQ due to the "almost offensive" offer price. Furthermore, Credit Agricole has reportedly increased its stake to 19% (prev. 9.2%) in Banco BPM via equity swap agreements.


• Swiss-heavyweight Roche (-1.1%) is lower on the session after its phase III SKYSCRAPER-01 did not reach the primary endpoint of overall survival at the final analysis. Elsewhere for the Co. is to acquire Poseida Therapeutics for USD 9/shr or an equity value of c. USD 1.0bln.

US Equity Futures: ES U/C, NQ U/C, DJIA U/C, RTY -0.7%

• US equity futures retreated overnight as markets digested Trump's tariff comments but then gradually recovered and returned to flat territory. The US docket for the session ahead includes, FOMC minutes and US Consumer Confidence. In terms of stock specific updates, Qualcomm’s (+0.2% pre-market) interest in acquiring Intel (-0.8% pre-market) has cooled, likely derailing what could have been a historic tech deal, Bloomberg reports; elsewhere and more recently, the US has finalised the USD 7.8bln award for Intel. Apple (-0.2% pre-market) is facing significant hurdles in launching its own AI models in China, with a top Chinese official stating that foreign companies must partner with local entities to navigate the complex approval process, FT reports. Meta (-0.1%) will face a trial on April 14th over the FTC antitrust lawsuit aimed at breaking up the company.

26 Nov 2024 - 10:10- ForexResearch Sheet- Source: Newsquawk