Newsquawk Daily European Equity Opening News - 20th September 2024

ASIA

APAC stocks mostly gained following the rally stateside where the S&P 500 and the Dow surged to fresh record highs as the dust settled after the Fed over-delivered in its first rate cut in four years and US data topped forecasts. ASX 200 followed suit to its US counterparts as tech led the advances and the index printed a new all-time high. Nikkei 225 outperformed again and approached closer to the 38,000 level, while the BoJ policy announcement provided no major fireworks in which the central bank kept its short-term rates unchanged at 0.25%, as unanimously forecast. Hang Seng and Shanghai Comp were mixed with the former joining in on the optimism in the region owing to the recent central bank activity and with EV makers finding some encouragement from recent China-EU EV tariff talks. Conversely, the mainland lagged despite the recent pledge by the NDRC to roll out a batch of incremental measures and reports that China is mulling removing major homebuying curbs, while the PBoC also announced China's latest Loan Prime Rates which were unsurprisingly maintained at their current levels.

China - China weighs removing major homebuying curbs to boost demand, according to Bloomberg. (Bloomberg); Chinese Loan Prime Rate 5Y (Sep) 3.85% vs. Exp. 3.85% (Prev. 3.85%); Loan Prime Rate 1Y (Sep) 3.35% vs. Exp. 3.35% (Prev. 3.35%)

EUROPEAN CLOSES

CLOSES: DAX: +1.54% at 19,000, FTSE 100: +0.91% at 8,329, CAC 40: +2.29% at 7,615, Euro Stoxx 50: +2.24% at 4,944, AEX: +1.77% at 908, IBEX 35: +0.80% at 11,778, FTSE MIB: +1.16% at 34,045, SMI: +0.75% at 12,067, PSI: -0.51% at 6,720.

SECTORS: IT 3.59%, Industrials 2.24%, Consumer Disc 2.15%, Materials 2.10%, Energy 1.87%, Financials 1.44%, Healthcare 0.64%, Consumer Stpl 0.24%, Telecoms -0.69%, Utilities -1.79%

FTSE 100

Rolls Royce (RR/ LN) - Cathay engine fire may be linked to cleaning, according to Reuters citing sources. (Reuters)

UK Consumers - UK GfK Consumer Confidence (Sep) -20.0 vs. Exp. -13.0 (Prev. -13.0)

OTHER UK COMPANIES

BROKER MOVES

DAX

Commerzbank (CBK GY) - A German bank union has called for Germany to prevent UniCredit (UCG IM) from buying Commerzbank, warning of massive job losses. (Newswires)

Mercedes-Benz (MBG GY) - Adjusts FY24 guidance based on current market outlook; now expects adj. return on sales to be 7.5-8.5% (prev. 10-11%) and EBIT is expected to be significantly below prior-year level (prev. slightly below prior-year level). FCF of industrial business for Mercedes-Benz is now expected to be significantly below the prior-year level. Sales mix in H2 of 2024 is exp. to remain unchanged vs H1, therefore weaker than originally expected. (Newswires)

Volkswagen (VOW3 GY) - German Vice Chancellor Habeck says the Federal and State Governments are thinking about how they can support the course of restructuring for the Co. (Newswires)

OTHER GERMAN COMPANIES

Uniper (UN01 GY) - And ConocoPhillips (COP) extend long-term gas supply partnership in Northwest Europe; supply of up to 10bln cubic metres of nat gas over the next 10 years in key NW European markets. (Newswires)

BROKER MOVES

CAC

OTHER FRENCH COMPANIES

Atos (ATO FP) - Extension of accelerated safeguard proceedings period. Has obtained an additional two months initially planned for accelerated safeguard proceedings. (Newswires)

BROKER MOVES

PAN EUROPE

Autos - China and the EU both aim to resolve differences via consultations over the EU investigation into Chinese EVs, while China's Commerce Minister and EU's Trade Commissioner are to continue pushing forward negotiations on price commitments, according to Xinhua. China and Europe to spare no effort to reach a mutually acceptable solution through dialogue. (Xinhua)

Postal Names / DHL (DHL GY) - FedEx (FDX) shares tumbled by 11% in afterhours trading following misses on profits and revenue, downward revisisions to the top-end of its guidance range, and warned on macro trends. DHL shares are indicated -2.4% in pre-market trade

BROKER MOVES

ASML (ASML NA) downgraded to Equal Weight from Overweight at Morgan Stanley

SMI

Holcim (HOLN SW) - Co's USD 30bln spinoff of its North American business has come under fire from an environmental group, saying it does not tackle climate change enough. (Newswires)

OTHER SWISS COMPANIES

Kuehne und Nagel (KNIN SW) - Has officially opened its new Adidas distribution centre in Northern Italy. (Newswires)

BROKER MOVES

Swatch (UHR SW) downgraded to Underperform from Hold at Jefferies

SCANDINAVIA

Novo Nordisk (NOVOB DC) - Says Wegovy recommended by the European regulatory authorities for label update to reflect reduced heart failure symptoms and improved physical function. (Newswires)

BROKER MOVES

US

CLOSES: SPX +1.70% at 5,714, NDX +2.56% at 19,840, DJIA +1.26% at 42,025, RUT +2.10% at 2,253.

SECTORS: Technology +3.08%, Consumer Discretionary +2.2%, Communication Services +1.88%, Industrials +1.75%, Materials +1.49%, Energy +1.22%, Financials +1.17%, Health +0.35%, Real Estate -0.23%, Utilities -0.57%, Consumer Staples -0.58%.

Bank of America (BAC), Berkshire Hathaway (BRK.B) - Berkshire sold 22.27mln of Bank of America shares between September 17-19th, for over USD 896mln. Buffett's recent share sales in Bank of America Corp. have now enabled him to recover the full cost of his investment, leaving a remaining stake valued at over USD 34bln as pure profit, Bloomberg gushed. Berkshire's total proceeds from share disposals and dividends since 2011 have exceeded the USD 14.6bln initially spent on the investment.

FedEx Corp (FDX) - Shares tumbled by 11% in afterhours trading following misses on profits and revenue, downward revisisions to the top-end of its guidance range, and warned on macro trends. It reported Q1 adj. EPS 3.60 (exp. 4.76), Q1 revenue USD 21.6bln (exp. 21.93bln). Exec said it remains focused on network transformation and cost reduction; noted that Q1 demand environment was weaker than expected, with the weakness in industrial economy pressuring deliveries in the US. Lowered the top-end of its FY adj. EPS guidance range to between USD 20.00-21.00 (from USD 20.00-22.00); sees FY25 revenue growth in the low single-digits Y/Y; maintains FY25 capex forecast at USD 5.20bln (exp, 5.26bln). Exec said the revised outlook shows confidence in executing DRIVE initiatives and pricing actions to offset weak demand, while maintaining prudent capital management and a commitment to returning USD 3.8bln billion to stockholders this fiscal year; expects to repurchase USD 1.5bln of common stock during FY25. Elsewhere, management said that the magnitude of the Fed rate cuts this week signals the weakness of the current environment.

Johnson & Johnson (JNJ) - Johnson & Johnson has increased its settlement offer for lawsuits, which allege that its baby powder caused cancer, to over USD 8.2bln, up from USD 6.5bln, according to Bloomberg. The new proposal indicates the company may need to allocate an additional USD 1.7bln to resolve the claims, offering larger payouts and covering USD 650mln in legal fees.

Nike (NKE) - Shares rose 7.6% in afterhours trading on news that CEO John Donahoe will retire on October 13th, with company veteran Elliott Hill returning to replace him. Donahoe will remain as an advisor until January. Hill worked at Nike for 32 years, and takes over amid restructuring efforts; Nike is due to report Q1 earnings on October 1st.

Lennar Corp (LEN) - Q3 2024 (USD): EPS 4.26 (exp. 3.63), Revenue 9.40bln (exp. 9.16bln)

Warner Music Group (WMG) - Warner Music Group is restructuring Atlantic Music Group, resulting in layoffs as Elliot Grainge prepares to take over as CEO. Sources cited by Billboard indicated 150-175 employees may be affected, including several high-ranking executives across various departments. The job cuts brings total headcount reductions this year to 750, or approximately 13% of its workforce, Reuters said; the restructuring aims to save about USD 260mln by FY25, up from a previous estimate of USD 200mln.

20 Sep 2024 - 06:55- Research Sheet- Source: Newsquawk