Newsquawk Daily European Equity Opening News - 16th December 2024

ASIA

APAC stocks saw an uninspiring start to the week following the mixed session on Wall Street on Friday and ahead of this week's risk events including the final FOMC, BoJ, and BoE meetings of the year. ASX 200 saw gold miners pressured by the recent pullback of the yellow metal towards USD 2,650/oz levels, with sentiment also weighed on by the downticks in prelim. Aussie PMIs. Nikkei 225 swung between modest positive and negative territory throughout the session as the index oscillated the 39,500 level, whilst the Japanese Flash PMI highlighted "stubborn inflation" with "anecdotal evidence placing particular emphasis on the impact of the weakness of the yen in relation to inputs sourced from abroad." KOSPI conformed to the broader risk tone with little sustained move after South Korean MPs successfully voted to impeach President Yoon in their second attempt. Hang Seng and Shanghai Comp fluctuated between modest gains and losses with little initial reaction seen to the Chinese activity data, which saw a marked miss in Retail Sales whilst Industrial Output saw a modest surprise uptick. Furthermore, Chinese markets failed to garner much support from weekend reports that China has room to further cut the RRR, according to PBoC officials on Saturday via CCTV.

EUROPEAN CLOSES

CLOSES: FTSE 100 -0.14% at 8,300, CAC 40 -0.15% at 7,410, IBEX 35 -0.11% at 11,752, PSI -0.11% at 6,354, FTSE MIB +0.09% at 34,889, SMI -0.29% at 11,682, Euro Stoxx 50 +0.04% at 4,967, DAX -0.17% at 20,392

SECTORS: Financials 0.37%, Consumer Stpl 0.15%, IT 0.03%, Telecoms -0.21%, Consumer Disc -0.33%, Utilities -0.36%, Energy -0.54%, Industrials -0.59%, Materials -1.26%, Healthcare -1.74%5:14 AM

FTSE 100

Entain (ENT LN) - Co. has co-operated fully with Austrac throughout its investigation of money laundering claims; outcome is uncertain but may lead to a penalty, which could be material. (Newswires)

Rolls Royce (RR/ LN) - Holds a successful F130 engine critical design review for the US air force B-52J. (Newswires)

IDS (IDS LN) - Daniel Kretinsky's GBP 5.3bln bid for IDS is set to get the greenlight by the UK Government, according to the FT citing sources; the sources add that it is set to be announced on Monday morning. (FT)

Persimmon (PSN LN) - Co. hit by GBP 40mln in extra costs due to tax rises and cladding levy, which will add "billions" of expenses across the industry, according to Persimmon boss cited by The Times. (The Times)

UK Housing - UK Rightmove House Prices (Dec) M/M: -1.7% (Prev. –1.4%); Y/Y 1.4% (Prev. 1.2%). (Newswires)

OTHER UK COMPANIES

BROKER MOVES

Bunzl (BNZL LN) upgraded to Outperform from Sectorperform at RBC

DAX

Allianz (ALV GY) - Reportedly close to dropping SGD 2.2bln income insurance deal, according to Bloomberg sources; had trouble assuaging Government concerns on deal. (Newswires)

OTHER GERMAN COMPANIES

Porsche Automobil Holding (PAH3 GY) - Withdraws earnings forecast due to expected impairment and to lead to accounting loss for Porsche SE. Expects impairment of Volkswagen investment up to EUR 20bln. Expects impairment of Porsche AG investment up to EUR 2bln. Board expects that group result after tax of Porsche SE for FY24 will be significantly negative. Withdrawing current forecast for group result after tax of EUR 2.4-4.4bln for FY24. Expected impairment losses at level of Porsche SE or Porsche SE Group will not have a cash effect. (Newswires)

Vonovia (VNA GY) - Co. and Deutsche Wohnen (DWNI GY) agree on conclusion of domination and P/L transfer agreement and on exchange ratio for compensation and fixed annual payment between the companies. Agreed annual fixed annual payment in amount of EUR 1.22 per Deutsche Wohnen share for each full business year. (Newswires)

BROKER MOVES

CAC

French Stocks - Moody's cut France’s rating to "Aa3" from "Aa2", outlook stable, in an unscheduled rating revision, citing political fragmentation. Moody's said its view is that France's public finances will be substantially weakened over the coming years. The agency noted that France's political fragmentation is more likely to impede meaningful fiscal consolidation and said there is now a very low probability that the next French government will sustainably reduce the size of fiscal deficits beyond next year. However, France's local- and foreign-currency ceilings remain unchanged at AAA, according to Moody's.

OTHER FRENCH COMPANIES

JCDecaux (DEC FP) - Co. and JoJ Media House has decided not to pursue a merger of their OOH activities in Slovakia. (Newswires)

BROKER MOVES

PAN EUROPE

A2A (A2A IM) - Technical extension of exclusivity period; exclusive period has been agreed from December 15 to Dec 24 to allow parties to finalise discussions. (Newswires)

China-Exposed Stocks - China has room to further cut the reserve requirement ratio (RRR), according to PBoC officials on Saturday via CCTV. China's Central Financial and Economic Affairs Commission deputy director said the country's GDP is expected to grow by about 5% this year, with foreign exchange reserves remaining above USD 3.2tln. He added that China's contribution to global economic growth is expected to be close to 30% and that employment and prices in China are expected to remain stable, according to Reuters. Chinese Stats Bureau stated that China is on track to achieve key economic targets in 2024, but more efforts are needed to promote continued economic recovery in 2025. It added the trend of recovery in consumption remained unchanged and that more policies would be implemented to expand domestic demand. It noted that while new policies had gained more traction, the external situation had become more complex and severe. The Bureau expects further improvement in the property market, emphasises the need to stabilise employment and increase incomes to boost consumption capacity, and anticipates that China's CPI will maintain modest increases. It also noted that China's economy is generally stable in November and sees increasing positive changes, according to Reuters. (Newswires) Chinese Retail Sales YY (Nov) 3.0% vs. Exp. 4.6% (Prev. 4.8%); Chinese Urban Investment (YTD)YY (Nov) 3.3% vs. Exp. 3.4% (Prev. 3.4%); Chinese Industrial Output YY (Nov) 5.4% vs. Exp. 5.3% (Prev. 5.3%). (Newswires)

EU Stocks - EU reportedly presses for new powers to combat threat of Chinese import surge and amid fears Brussels will struggle to fight back in a global trade war, according to FT. (FT)

Ferrovial (FER SM) - To extend share repurchases to 30th May 2025; raises programme by EUR 300mln to EUR 600mln. (Newswires)

Obesity Rates - US obesity have decreased for the first time in a decade, with the rate dropping from 44.1% to 43.96% in 2023, Bloomberg reports. The change is partly attributed to the rise of weight-loss drugs like Novo Nordisk's Ozempic (NOVOB DC). (Bloomberg)

Stellantis (STLAM IM/STLAP FP) - Italy's Industry Minister said Italy must be a central part of the co's industrial plan. (Newswires)

Sabadell (SAB SM) - To proceed with total early redemption of EUR 1.50bln of mortgage bonds. (Newswires)

UniCredit (UCG IM) - Co. files document on Banco BPM (BAMI IM) with market regulator Consob; for each 1000 BPM shares tendered, 175 newly issued ordinary shares of the offeror will be offered in exchange. (Newswires)

BROKER MOVES

SMI

Holcim (HOLN SW) - Completed its share buyback program. Share capital to be reduced to CHF 1,133,751,026. (Newswires)

OTHER SWISS COMPANIES

Galderma (GALD SW) - Received US FDA approval for Nemluvio for patients with moderate to severe Atopic dermatitis. (Newswires)

BROKER MOVES

SCANDINAVIA

Catalent (CTLT), Novo Nordisk (NOVOB DC) - Novo Nordisk announced regulatory approval for Novo Holdings' acquisition of Catalent and its purchase of three Catalent manufacturing sites. The USD 11.7bln acquisition will slightly reduce its 2025 operating profit growth and free cash flow, but won't affect its 2024 share buyback programme, Novo said. (Novo Nordisk)

Kesko (KESKOB FH) - Sales +1.4% in November; comparable terms -2.4%.

BROKER MOVES

US

CLOSES: SPX unch. at 6,051, NDX +0.76% at 21,780, DJI -0.20% at 43,828, RUT -0.60% at 2,347.

SECTORS: Technology +0.54%, Consumer Discretionary +0.42%, Utilities +0.07%, Health UNCH, Consumer Staples -0.20%, Industrials -0.27%, Financials -0.28%, Real Estate -0.58%, Energy -0.63%, Materials -0.79%, Communication Services -1.12%

Barron's 2025 Picks - The newspaper notes that the stock market is experiencing strong growth as 2024 ends, and is expected to continue rising in 2025, potentially gaining 20%, adding that Wall Street’s forecasts are considered overly conservative. The rally is being driven by AI expansion and deregulation, though investors should be ready for volatility, it warns. In 2024, the Mag7 stocks dominated the market, but 2025 may see a shift. Barron's said investors are advised to diversify, considering value-oriented stocks beyond the tech giants for the upcoming year, with a focus on emerging opportunities outside the top performers. For its top 10 picks for 2025, it highlighted: ASML Holding (ASML NA), Alibaba (BABA), Berkshire Hathaway (BRK.B), Citigroup (C), Everest Group (EG), Alphabet (GOOG), LVMH (MC FP), Moderna (MRNA), SLB (SLB), Uber Technologies (UBER).

Capri Holdings (CPRI) - Capri Holdings is exploring the sale of its Versace and Jimmy Choo units, working with Barclays to find potential buyers, WWD reports. The brands may be sold separately or together. This move aligns with Capri's focus on revitalising Michael Kors, amid challenges such as declining luxury demand and a slowdown in China.

Super Micro Computer (SMCI) - Supermicro enlisted Evercore (EVR) to assist in raising capital, and is considering both equity and debt options to strengthen its finances, Bloomberg reports.

LNG Charter Rates - LNG freight rates have fallen sharply due to an oversupply of vessels, with rates down nearly 80% in the Atlantic, the FT reports. The oversupply stems from excessive ship production after the 2022 energy crisis, compounded by project delays and weaker European demand. Short-term rates are expected to remain low.

Tesla (TSLA) - Co. has raised the price of the Model S to USD 79,990 from USD 74,990 in the US and the price of the Model S Plaid to USD 94,990 from USD 89,990, according to its website. (Newswires)

Meta (META) - Co. has urged the California Attorney General to stop OpenAI (MSFT) from becoming for-profit, according to WSJ. (WSJ)

Nasdaq reshuffle - Nasdaq announced that Palantir Technologies (PLTR), MicroStrategy (MSTR), and Axon Enterprise (AXON) will be added to the index, while Illumina (ILMN), Super Micro Computer (SMCI), and Moderna (MRNA) will be removed as part of the annual reconstitution of the Nasdaq-100 Index, which will become effective prior to market open on Monday, December 23rd, according to Reuters. (Newswires)

Tech - US to empower companies like Google (GOOGL) and Microsoft (MSFT) to act as gatekeepers for access to AI chips, via Reuters citing sources. (Newswires)

16 Dec 2024 - 06:45- Exclusive- Source: Newsquawk