Newsquawk Daily European Equity Opening News - 27th August 2024

27th August 2024

ASIA

APAC stocks traded mostly lower following a mixed lead from Wall Street, which saw the tech sector lag ahead of NVIDIA earnings on Wednesday. News flow in APAC hours was quiet and catalysts light, with the overall tone of the market tentative. ASX 200 saw its early modest gains fade with the index trading flat throughout most of the APAC session, although BHP shares were lifted some 2% following earnings. Nikkei 225 opened in the red but gradually edged higher in tandem with the weakness in the JPY, with the index confined to a tight intraday range. Hang Seng and Shanghai Comp were both subdued for the entirety of the session, with the mainland overlooking an improvement in Industrial Profits, whilst Hong Kong saw its hefty losses in Alibaba and JD.com after Temu-owner PDD tumbled 28.5% after cautioning that its revenue growth will slow as competition continues to increase.

BHP (BHP AT) - FY (USD): Revenue USD 55.7bln (exp. 55.971bln). Underlying profit 13.66bln (exp. 13.49bln). Dividend 0.74, Co. expects volatility in global commodity market in the near term. GUIDANCE: Sees capital and exploration expenditure about USD 10bn for FY25. Comfortable to move above our net debt target temporarily to execute value accretive opportunities in the portfolio. Still expect lagged impact from inflation and some lingering labour market tightness to impact our cost base into FY25. Sees capital and exploration expenditure about USD 11bn for FY26. Sees FY25 Escondida copper unit costs of USD 1.30 – 1.60/lb. Sees FY25 WAIO unit costs of USD 18.00 -19.50/t. Sees medium-term Escondida copper unit costs of USD 1.50 – 1.80/lb. MARKET OUTLOOK: In the near term, "we expect volatility in global commodity markets, with China experiencing an uneven recovery among its end-use sectors". "We now expect CY24 to be in marginal surplus for copper, a reflection of softer demand expectations for China and higher supply". Continue to expect the lagged effect of inflation to flow into FY25. Labour market remains core inflationary concern, although believe now past peak and conditions should continue to ease. CHINA DEMAND: In the near term, slowing demand growth in China is expected to be partially offset by more positive trends in power grid spending. In the medium term, China's demand for iron ore is expected to be lower than it is today. (Newswires) Shares +1.6% in APAC trade

Chinese Industrial Data - Chinese Industrial Profits YY (Jul) 4.1% (Prev. 3.6%); YTD 3.6% (Prev. 3.5%)

EUROPEAN CLOSES

CLOSES: Euro Stoxx 50 -0.26% at 4,897, DAX -0.06% at 18,622, CAC 40 +0.18% at 7,590, SMI +0.10% at 12,359, FTSE MIB -0.13% at 33,605, IBEX 35 -0.11% at 11,266, PSI +0.26% at 6,716, AEX -0.12% at 907.

SECTORS: Energy 0.48%, Telecoms 0.23%, Materials 0.21%, Consumer Stpl 0.20%, Utilities 0.18%, Consumer Disc -0.04%, Healthcare -0.05%, Financials -0.07%, Industrials -0.08%, IT -1.37%

FTSE 100 - Including stories from Monday

Anglo American (AAL LN) - BHP (BHP AT) said it is not interested in bidding for Anglo American's coking assets. (Newswires)

Barclays (BARC LN) – Co. has increased its H1 bonus pool to GBP 675mln (prev. 665mln). (Newswires)

Melrose (MRO LN) - FT article titled "the great Melrose cashflow conundrum". The article focuses on a recent UBS note on the name, within which UBS set Melrose's price target at GBP 4.00/shr based on peer valuation metrics; on that, and concluding, the FT article says "...but it's a brave bet to say it can't go lower still". (FT) Melrose closed at GBP 4.80/shr on Friday.

M&S (MKS LN) - Co. is considering opening a range of clothing-only boutiques, via Telegraph; to open one in Battersea Power Station before trailing potential further openings. (Telegraph)

Shell (SHEL LN) - Plans to shut in different portions of the Zydeco pipeline from Houston-Houma Port Neches for three to four days starting September 24th for maintenance. (Newswires)

Unilever (ULVR LN) - Co. is looking to dispose of brands Kate Somerville and REN, via Sky News citing sources; the valuation of the units is unclear. (Sky News)

UK Retail - UK BRC Shop Price Index (Aug) Y/Y -0.3% (Prev. +0.2%); BRC CEO said "Shop prices fell into deflation for the first time in nearly three years. This was driven by non-food deflation, with retailers discounting heavily to shift their summer stock, particularly for fashion and household goods". (Newswires)

OTHER UK COMPANIES

BROKER MOVES

DAX

BMW (BMW GY) and Toyota (7203 JT) - To form an alliance in fuel cell vehicle manufacturing, according to Nikkei; official MoU announcement expected September 5th. (Newswires)

Volkswagen (VOW3 GY) - US announced a successful resolution of the remediation course for worker rights protection at the Volkswagen plant in Mexico. (Newswires)

OTHER GERMAN COMPANIES

BROKER MOVES

Continental (CON GY) upgraded to Buy from Neutral at UBS Shares +2.8% pre-market

Daimler Truck (DTG GY) downgraded to Neutral from Buy at Goldman Sachs; GS writes that decelerating pricing and near-peak level of inventories could be downside risks for the Co. Shares -1.8% pre-market

CAC

French Firms – President Macron has, after two days of meetings with political leaders, reaffirmed his stance that the NFP alliance alone cannot form the next government i.e. rejecting the NFP PM candidate Castets. Calling for a coalition of “republican forces” to form a government. In response, PCF leader Roussel called for popular protests. (Newswires)

OTHER FRENCH COMPANIES

Eiffage (FGR FP) - Won a contract worth close to EUR 700mln. To build an office on behalf of the French Ministry of the Interior. (Newswires)

Technip Energies (TE FP) - To design a groundbreaking low-carbon hydrogen facility for BP (BP/ LN) in the UK. (Newswires)

BROKER MOVES

PAN EUROPE

EDP Renovaveis (EDPR PL) - Signed a power purchase agreement for a solar project in Singapore. (Newswires)

Ryanair (RYA ID) - Co. has lost its appeal against an Italian ban on airlines charging extra for seat reservations for travellers who need to sit next to children with disabilities. (Newswires)

Warsaw, Poland – The Warsaw Stock Exchange CEO is optimistic that the domestic stock market can recover from a period of time where it has lagged the performance of the economy as a whole. (FT)

BROKER MOVES

SMI

Roche (ROG SW) - Roche's PiaSky (crovalimab) has received EU approval as the first monthly subcutaneous treatment for paroxysmal nocturnal haemoglobinuria (PNH) in adults and adolescents. PiaSky is a novel recycling monoclonal antibody that inhibits the complement protein C5, offering a more flexible treatment option compared to current intravenous infusions. PiaSky can be self-administered, potentially reducing treatment burden. Approval based on COMMODORE 2 study, showing equivalence to intravenous eculizumab. Innovative recycling technology enables monthly subcutaneous administration. Demonstrated non-inferiority and comparable safety to eculizumab. Already approved in the US and Japan. (Roche)

Sonova (SOON SW) - Confirmed its outlook for FY24/25 at its Investor Day. (Newswires)

OTHER SWISS COMPANIES

Flughafen Zuerich (FHZN SW) - H1 (CHF): EBITDA 346.8mln, +7% Y/Y. Expects 31mln passengers in 2024. Outlook: Aviation revenue will slightly outperform passenger volumes. (Newswires)

BROKER MOVES

Schindler (SCHP SW) downgraded to Sell from Neutral at Goldman Sachs

SCANDINAVIA

Stora Enso (STERV FH) - Co. suspended logging after damage to River Pearl mussels. (Newswires)

BROKER MOVES

US

CLOSES: SPX -0.31% at 5,616, NDX -1.04% at 19,516, DJIA +0.16% at 41,240, RUT +0.16% at 2,222.

SECTORS: Technology -1.12%, Consumer Discretionary -0.81%, Industrials -0.13%, Health -0.12%, Real Estate -0.12%, Communication Services -0.02%, Financials +0.31%, Materials +0.39%, Utilities +0.61%, Consumer Staples +0.72%, Energy +1.11%.

Apple (AAPL) - Announced Kevan Parekh as new CFO; to succeed Luca Maestri effective January 1st 2025. Co. also announced iPhone event for September 9th, via CNBC.

Microsoft (MSFT) - CEO Satya Nadella reports open market sale of 14,398 shares of Microsoft at average price of USD 417.412/shr on Aug 23rd (vs Monday close of USD 413.49/shr), according to an SEC filing.

27 Aug 2024 - 06:49- Research Sheet- Source: Newsquawk

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