EUROPEAN EQUTIES UPDATE: Indices mostly and modestly firmer, SHEL LN -1.5% after trimming Q4 prod. guidance

STOXX 600: +0.2%

• European bourses initially opened with a slight negative bias, taking impetus from a mostly negative APAC session.


• Soon after the cash open, sentiment improved in Europe, to currently display a modestly firmer picture, with only a couple of indices residing in the red.


• On the data front; German Retail Sales printed above expectations, whilst Industrial Orders considerably missed the consensus; although, there were some caveats in the accompanying release – “Excluding large orders, incoming orders were 0.2% higher than in the previous month”.

Sectors: Mixed

• European sectors are mixed, with no clear out/underperformer in the session thus far.


• Financial Services leads, followed closely by Banks; UK banks populate the top of the index, given the relatively high yield environment seen over the past couple of days – though yields are pulling back a touch in today's session.


• Energy is found at the foot of the pile, with losses fueled by Shell after it cut its Q4 production guidance (details below); this comes despite energy prices residing near session highs on the day.


• US President-elect Trump provided some interesting commentary in his press conference on Tuesday, which has impacted a few sectors today. Firstly, Defence names are broadly positive today after Trump proposed that NATO members spend 5% of their GDP on defense, a significant increase from the current 2% target. Secondly, renewable energy names such as Orsted (-5%) are lower today after Trump said he would like to see “no new windmills”, calling them “garbage”.

Majors: FTSE 100 +0.1%, CAC 40 -0.1%, DAX 40 +0.4%

• The FTSE 100 is slightly firmer, with gains to a similar magnitude as peers. In terms of stock specifics, Flutter (-2.8%) sits at the foot of the index after the Co. cut its FY24 rev. and adj. EBITDA guidance citing “very unfavourable” sports results in Nov-Dec. Elsewhere, energy giant Shell (-1.6%) cut its Integrated Gas Production and LNG Volumes guidance for Q4; it adds that Marketing and Chemicals earnings are expected to be lower in Q4 “reflecting seasonality”. Banking names such as Barclays (+2.4%) and NatWest (+2%), as yields remain at elevated levels – though has pulled back a touch from the prior session.


• The CAC 40 is incrementally in negative territory, largely weighed on by slight losses in the Luxury sector, after the latest press briefing from the NDRC underwhelmed traders; Kering (-0.3%), LVMH (-0.5%). Dassault Aviation (+2.5%) gains today after the Co. reported better-than-previous Rafale order intakes. STMicroelectronics (-1.5%) is on the back foot today after peer Samsung missed on its Q4 prelim expectations.

US Equity Futures: ES +0.2%, NQ +0.2%, RTY +0.3%

• Futures are modestly firmer across the board, in an attempt to recoup some of the hefty losses seen in the prior session, which were sparked by hotter-than-expected US ISM Services and JOLTS Job Openings figures.


• The US Day sees the release of ADP jobs data (exp. 140k vs the prior 146k). Weekly initial jobless claims will be released today given the National Day of Mourning on Thursday; the street expects initial claims for the week of January 4th to print 218k (prev. 211k), while continuing claims for the week of December 28th are seen rising to 1.867mln from 1.844mln (neither of these coincide with Friday's BLS jobs data for December). Fed’s Waller is due ahead of the FOMC's December meeting minutes.

08 Jan 2025 - 09:55- EquitiesData- Source: Newsquawk