EUROPEAN OPEN: Trump sends tariff letters; SSNLF sees profits halving in Q2; RIO LN CEO announcement could come in late July; DTG GY EUR 2bln buyback; XOM sees Q2 impact; P911 GY sales slip in H1, sees challenging H2; FLTR LN resumed with Buy at Jefferies

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  EUROPEAN OPEN: European equities have opened flat/mixed following the US trade developments, which traders say leaves room for negotiation before higher levies are imposed. APAC stocks made cautious gains as markets digested the US tariff letters to 14 countries, including Japan and South Korea, with rates of 25-40%. While President Trump issued the first of several letters threatening higher tariffs on key trading partners, he remains open to further talks and has delayed the increase until at least August 1st; more trade-related letters are expected for 12 countries. The ASX 200 was flat as tech strength offset defensives; the RBA held rates, surprising expectations (see below); the Nikkei 225 rose on yen weakness despite tariff concerns; Chinese markets gained on PBoC support for offshore bond access and Bond Connect expansion. On the data front, Germany's trade surplus widened to EUR 18.4bln in May (exp. 15.5bln, prev. 14.6bln), with imports falling by -3.8% M/M (exp. -0.9%), and exports declining by -1.4% M/M (exp. -0.2%); ING said the exports data disappointed, and shows that the reversal of the front-loading effect is still in full swing in the export sector.


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  STOCK SPECIFICS: Of note for tech names, Samsung Electronics (SSNLF) Q2 operating profit fell 56%, its first Y/Y decline since 2023, due to AI chip inventory write-downs linked to US export curbs to China; it reported preliminary Q2 operating profit of KRW 4.6tln (exp. 6.2tln), prelim Q2 revenue of KRW 74.0tln (exp. 75.8tln), and also announced a KRW 3.9tln share buyback. In materials, the next Rio Tinto (RIO LN) CEO is expected to consider big M&A deals and cost cuts, according to sources cited by Reuters; final candidates will present to the board in London this week, with an announcement possible by late July. In industrials, Daimler Truck (DTG GY) will repurchase EUR 2bln of its shares starting in H2 2025, with the buyback due to run over two years; the announcement came ahead of its capital markets day on Tuesday, where new medium-term targets are expected. The US FAA plans to mandate inspections of around 2,200 Boeing (BA) 737s and 757s, citing risks that improper maintenance could compromise main landing gear integrity, expanding on a February directive concerning 767s. In energy, Exxon Mobil (XOM) expects Q2 earnings to be negatively impacted by USD 0.8-1.2bln from lower liquids prices and USD 0.3-0.7bln from lower gas prices vs Q1; it said the estimates reflect market dynamics and were not a forecast of Q2 results. In autos, Porsche (P911 GY) H1 global sales fell 6% to 146,391 units; it cited challenging conditions and tariffs, and sees the environment remaining challenging in H2. In financials, UBS (UBSG SW) granted goodwill payments to some clients who suffered losses linked to recent Trump tariff-related market volatility, FT reports. Bper Banca (BPE IM) CEO predicts Q2 and H1 results will be very positive, and confirmed the bank's FY guidance; he added that he is confident the 50% take-up threshold will be attained in the Banca Popolare di Sondrio (BPSO IM) bid. Of note for European medical device manufacturers, a European business group in China criticised Beijing’s new restrictions on EU medical device makers, calling the measures retaliatory and escalating trade tensions, adding that it undermines hopes for resolving longstanding issues and deepening EU-China economic ties. Elsewhere, in healthcare, Novartis (NOVN SW) received approval for Coartem as the first malaria treatment specifically for newborns and young infants. In notable broker updates, Flutter (FLTR LN) was resumed with a Buy rating at Jefferies; Arkema (AKE FP) was downgraded at Barclays; Givaudan (GIVN SW) was upgraded at Barclays; Zealand Pharma (ZEAL DC) was initiated with an Overweight rating at Barclays; Accor (AC FP) was initiated with an Outperform rating at Santander; Glencore (GLEN LN) was upgraded at JPMorgan.

TODAY'S AGENDA:

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  DAY AHEAD: The US Day sees the release of the NFIB business optimism index for June, weekly RedBook. The NY Fed will release its latest Survey of Consumer Expectations; last month, median one-year ahead inflation expectations eased to 3.2% (prev. 3.6%), the three-year expectations fell to 3.0% (prev. 3.2%), while the five-year pared back to 2.6% (prev. 2.7%). In later trade, consumer credit stats for May are expected to fall to USD 10.50bln from USD 17.87bln in April. In energy, the EIA will release its monthly report. Afterhours, the API will publish its weekly inventory stats, where headline crude stocks are expected to draw down by a rate of -2.6mln bbls, distillates are seen drawing by -0.2mln bbls, and gasoline stocks are seen drawing by -1.7mln bbls. On today's speakers' slate, ECB's Nagel, and ECB VP de Guindos. In supply, the UK will sell GBP 900mln of 2049 linkers; Germany will sell EUR 5bln of 2030 Bobls; US will sell USD 58bln of 3yr notes.


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  RECAP - RBA POLICY ANNOUNCEMENT - Australia’s RBA held its key interest rate steady at 3.85%, surprising most economists and traders who expected a 25bps cut; the central bank signalled a wait-and-see stance amid global uncertainty from US tariff plans, balancing easing pressures with a tight labour market and weak productivity growth.

08 Jul 2025 - 08:10- EquitiesResearch Sheet- Source: Newsquawk