Newsquawk Daily European Equity Opening News - 9th January 2024

9th January 2024

ASIA

APAC stocks traded higher as the region took impetus from the gains on Wall Street where tech outperformed as risk appetite was fuelled by a lower yield environment and a drop in oil prices. ASX 200 climbed above 7,500 with the index led by tech and consumer-related sectors owing to softer yields.Nikkei 225 printed its highest since March 1990 and rallied to just shy of 34,000 where it hit resistance. KOSPI was clouded after disappointing preliminary quarterly earnings from Samsung Electronics. Hang Seng and Shanghai Comp initially benefitted amid the broad constructive mood and recent PBoC hints at tools to boost credit including RRR although the upside was reversed after the PBoC drained liquidity and with Chinese oil majors pressured by the recent fall in oil prices.

Samsung Electronics (005930 KS) - Q4 prelim. (KRW) oper. profit is likely 2.8tln (exp. 3.7tln), rev. is likely 67tln (exp. 71.4tln). (Newswires) Shares fell 2.8% in APAC trade

Panasonic Holdings (6752 JT) - Co. and Amazon (AMZN) are partnering to produce smart TVs that recommend content to consumers based on their viewing history, according to Nikkei. (Nikkei)

LG Energy Solution (373220 KS) - Q4 prelim. (KRW) 338.2bln (exp. 603.4bln), rev. 8.00tln (exp. 8.48tln). (Newswires)

EUROPEAN CLOSES

CLOSES: DAX +0.74% at 16,716.47, FTSE 100 +0.06% at 7,694.19, CAC 40: +0.40% at 7,450.24, Euro Stoxx 50: +0.46% at 4,484.05, IBEX 35 +0.44% at 10,209.00, FTSE MIB +0.42% at 30,569.92, SMI +0.43% at 11,233.50

SECTORS: IT 1.32%, Consumer Disc 0.95%, Industrials 0.65%, Financials 0.49%, Consumer Stpl 0.46%, Telecoms 0.35%, Healthcare 0.33%, Utilities 0.06%, Materials -0.01%, Energy -3.04%

FTSE 100

BAE Systems (BA/ LN) - Contracted to provide critical MK45 naval gun systems upgrade to Australian Navy freights. (Newswires)

Barclays (BARC LN) – The bank shed around 5,000 jobs in 2023 as part of cost-cutting measures. Investors are reportedly awaiting an update from the CEO in February which could see further cost reduction plans. The CEO is also expected to announce a restructuring of the bank alongside results in February, according to The Telegraph. (Telegraph) Note: FY23 results are due on February 20th 2024.

Retail Names - BRC Total Sales YY (Dec) 1.7% (Prev. 2.7%); below the 3-month average growth of 2.3% and below the 12-month average growth of 3.6%. “The festive period failed to make amends for a challenging year of sluggish retail sales growth, as weak consumer confidence continued to hold back spending". (BRC)

GSK (GSK LN) - CEO said the pharma giant was aiming for acquisitions in core areas—vaccines, speciality medicines, infectious diseases, respiratory, and oncology—to sustain momentum, Bloomberg reports. The move precedes patent losses, like a vital HIV treatment, prompting GSK's focus on pipeline expansion. (Newswires)

OTHER UK COMPANIES

YouGov (YOU LN) – Co. has boosted its presence in the US with the takeover of KnowledgeHound, terms undisclosed. The takeover will bolster YouGov’s client list as well as its platform Crunch. (Times)

BROKER MOVES

Reckitt Benckiser (RKT LN) upgraded to Neutral from Underperform at BNP Paribas (Newswires)

DAX

Merck (MRK GY) - Still forecasts FY net sales of EUR 20.5-21.9bln and still forecasts FY adj. EBITDA EUR 5.8-6.4bln; FY adj EBITDA view seen trending in the lower half of range and FY sales guidance trending slightly below mid-point. (Newswires)

OTHER GERMAN COMPANIES

Aurubis (NDA GY) - Legal probe into copper fraud is to finish this month, via Bloomberg. (Bloomberg)

Nordex (NDX1 GY) - Received orders from the UK for approx. 150 MW. (Newswires)

BROKER MOVES

BASF (BASF GY) downgraded to Underperform from Market Perform at Bernstein

DWS (DWS GY) upgraded to Buy from Neutral at Goldman Sachs

Wacker Neuson (WAC GY) downgraded to Hold from Buy at Jefferies

United Internet (UTDI GY) downgraded to Neutral from Buy at UBS; Shares seen -2.2% in pre-market trade.

CAC

Airbus (AIR FP) - Co. is nearing a significant widebody order from Delta (DAL), according to sources cited by Reuters. (Reuters)

OTHER FRENCH COMPANIES

BROKER MOVES

Danone (BN FP) upgraded to Neutral from Underperform at BNP Paribas

Nexans (NEX FP) initiated with Buy at Berenberg

PAN EUROPE

ArcelorMittal (MT NA) – The Italian government plans to take a majority stake in Italy’s largest steelmaker Acciaierie d’Italia following a clash with ArcelorMittal – the current majority shareholder – over how to recapitalise Acciaierie d’Italia. The Italian government has agreed to raise its stake in the Italian steelmaker to 66% from 38% and inject EUR 320mln in fresh capital, according to a statement. ArcelorMittal reportedly turned down a request to contribute with new funds, according to Bloomberg. (Bloomberg)

Brunello Cucinelli (BCU IM) - FY23 (EUR): Net sales 1.1395bln (exp. 1.128bln, prev. 919.5mln Y/Y), +26% at constant exchange rates; confirms 2024 revenue growth guidance at around 10%. (Newswires)

Ryanair (RYA ID) - CEO O’Leary has called on Boeing (BA) to improve quality control; “… airfares, particularly peak summer, are going to be higher as there’s going to be less short-haul capacity around Europe”. Believes they will be 5-10 aircraft short for the peak summer season, delivery delays which will cause the next period's FY passenger numbers to drop to 200mln (prev. 205mln). (FT)

Pirelli (PIRC IM) - Former CEO Tronchetti Provera’s investment vehicle is increasing its stake to 20% (current 14%). (Newswires)

BROKER MOVES

CaixaBank (CABK SM) downgraded to Reduce from Hold at Kepler Cheuvreux

bpost (BPOST BB) downgraded to Underperform from Hold at Jefferies

JD Peet's (JDEP NA) downgraded to Underperform from Neutral at BNP Paribas

Lotus Bakeries (LOTB BB) downgraded to Underperform from Neutral at BNP Paribas

SNAM Rete Gas (SRG IM) upgraded to Buy from Hold at SocGen

SMI

Novartis (NOVN SW) - Reportedly in advanced talks to buy Cytokinetics (CYTK), a deal could be announced as soon as this week, according to WSJ citing sources. The deal could value the Cytokinetics at "well over USD 10bln", according to Reuters sources. (WSJ) CYTK shares spiked higher on the news, rising from 87.46 to 108.45 over 15 minutes and closed +15.3% at 108.06.

OTHER SWISS COMPANIES

BROKER MOVES

Givaudan (GIVN SW) upgraded to Market Perform from Underperform at Bernstein

Nestle (NESN SW) downgraded to Underperform from Neutral at BNP Paribas

SCANDINAVIA

Baloise (BALN SW) - Investor zCapital has outlined a proposal to lift existing restrictions on shareholder voting rights. (Newswires)

Vestas Wind Systems (VWS DC) - CEO says Co. is to hire more staff in the US after a series of new contracts wins in Q4'23. (Newswires)

BROKER MOVES

Jyske Bank (JYSK DC) initiated with Overweight at Barclays

US

CLOSES: SPX +1.41% at 4,764, NDX +2.11% at 16,650, DJIA +0.58% at 37,683, RUT +1.94% at 1,989.

SECTORS: Technology +2.75%, Consumer Discretionary +1.77%, Communication Services +1.74%, Real Estate +1.43%, Health +0.84%, Utilities +0.72%, Consumer Staples +0.71%, Financials +0.6%, Industrials +0.58%, Materials +0.41%, Energy -1.16%.

Alaska Airlines (AAL) - Said it found loose hardware on some Boeing (BA) 737 MAX 9 planes, according to AFP News Agency. (AFP)

Jefferies (JEF) - Fell over 2% afterhours following Q4 results. Q4 EPS 0.29 (exp. 0.34), Q4 revenue USD 1.2bln (exp. 1.24bln). Raises buyback authorisation to USD 250mln. Investment Banking net revenues were USD 2.3bln. Equities and Fixed Income revenues USD 2.2bln. Asset Management and Other net revenues USD 200mln. Exec said 2023 was a transition year for the economy and in capital markets. Exec said they were at the bottom of the cycle in 2023. Said the pain of this transition was felt in Investment Banking, where curtailed new capital markets issuance was compounded by a dampening of merger and acquisition activity among our corporate and sponsor clients. Exec said Equities, Fixed Income and Asset Management businesses performed well despite uncertainty, hopeful that 2023's results represent a trough. (Newswires)

Microchip Technology (MCHP) - Sees preliminary revenue indication for December 2023 quarter down sequentially by about 22% vs. guidance of a decline of about 15%-20% citing weakening economic environment customers face. (Newswires)

United Airlines (UAL) - Found loose bolts so far on close to 10 Boeing (BA) 737 MAX aircraft during inspection with the loose bolts all in the same location, according to a source cited by Reuters. (Reuters)

09 Jan 2024 - 06:55- Fixed IncomeResearch Sheet- Source: Newsquawk