EUROPEAN EQUITY UPDATE: Upward tilt post-Fed and pre-ECB, alongisde a slew of earnings

STOXX 600: +0.5%

• European bourses are generally modestly firmer across the board, as sentiment improves from a mostly mixed APAC session; the AEX/IBEX 35 are the European outperformers.


• As it stands, indices generally reside just off session highs, and ultimately awaiting impetus from the ECB (exp. 25bps cut) and then President Lagarde thereafter.


• The EZ day has included French GDP, German Import Prices (topped expectations), Spanish CPI (beat, but core cooled from the prior), German GDP (missed expectations), EZ GDP (Q/Q 0.0% vs exp. 0.1%, missing expectations); metrics which have had little impact on the complex.

Sectors: Positive

• European sectors hold a strong positive bias; aside from the top performer, the breadth of the market is fairly narrow.


• Real Estate outperforms today, with the sector benefiting from the relatively lower yield environment in the aftermath of the FOMC. Industrial Goods & Services and Tech complete the top three.


• Telecoms is the marginal underperformer, pressured by losses in BT after its Q3 results.


• For Banking names, BBVA (+3.5%) gains after it beat estimates and announced a near EUR 1bln share buyback. Caixabank (-1%) slips a little lower after lending income came under pressure. Deutsche Bank (-4.5%) sinks after its results (details below).

Majors: FTSE 100 +0.2%, DAX 40 +0.3%, CAC 40 +0.4%, SMI +0.2%

• The FTSE 100 is a little firmer today, but ultimately underperforming vs peers. In terms of stock specifics, BT (-3.5%) sits at the foot of the index after the co. slightly missed on its Adj. Revenue figure and reconfirming its FY25 outlook. Index heavyweight Shell (+0.3%) reported weak headline metrics across the board; but did announce a USD 3.5bln buyback and raised its dividends. For airliners, Wizz Air (-12.1%) shares glide lower after it reported weak Q4 results and cut its FY25 annual net income forecast.


• The DAX 40 continues to rise and currently holds near the top end of the day’s range; Deutsche Bank (-4.5%) bottoms the index – headline metrics topped consensus marginally, but its pretax profit took a hit due to legal provisions/restructuring costs. The bank did announce a EUR 2.1bln share buyback, but has failed to lift sentiment. For shipping name Hapag Lloyd (+0.6%), shares gain after reporting positive earnings amid higher transport volumes. Poor German GDP figures spurred some very modest pressure in the index.


• The CAC 40 is firmer, with gains to a similar magnitude as peers. Sanofi (+1.3%) gains despite reported weak results, with considerable weakness in EPS; but positivity stems from a planned EUR 5bln share buyback and provided optimistic initial FY25 guidance. For semi-conductor name, STMicroelectronics (-7%) shares opened lower and have continued to slip after it reported a beat on headline metrics, but its Q1 rev. guidance fell short of analyst expectations.


• The SMI is posting modest gains; ABB (+2.4%) gains post-earnings, where it beat on headline metrics and announced a planned share buyback of USD 1.5bln. For Healthcare heavyweight, Roche; rev. was strong and noted that it sees FY25 sales increase in mid-single digit range. And important for the Luxury sector, Swatch (-5.4%) slips after its headline figures missed and noted that “demand in China will continue to be rather restrained”.

US Equity Futures: ES +0.4%, NQ +0.6%, RTY +1%

• Futures are entirely in the green, in the aftermath of the FOMC meeting and then the dovishly-viewed Powell press conference thereafter - as such, the economy-linked RTY outperforms.


• Big Tech earnings after-hours were varied; MSFT (-3.5%, strong Q4 but disappointing cloud outlook), Meta (+2.9%, earnings beat), Tesla (+4.1%, Q4 results missed but Musk promises autonomous robotaxi).


• The US Day sees the release of advanced GDP stats for Q4, where the headline is expected to rise by 2.6% (prev. 3.1%); there will also be attention on the Q4 inflation metrics, where core PCE is seen rising to 2.5% (prev. 2.2%) and the deflator is expected to rise to 2.4% (prev. 1.9%). Weekly initial jobless claims are seen at 220k in the 25/Jan week (does not coincide with the BLS survey window for the January jobs data), while continuing claims are expected at 1.89mln from 1.899mln (note: continuing claims data this week does coincide with the BLS survey window for the January jobs data).


• Today's corporate earnings slate is significant, with the likes of Apple (AAPL), Intel (INTC), Mobileye (MBLY), UPS (UPS), Caterpillar (CAT), Visa (V), Mastercard (MA), Blackstone (BX), Cigna (CI), US Steel (X) all due to publish numbers.

30 Jan 2025 - 10:15- EquitiesData- Source: Newsquawk