Apr 02 ,2024
Synopsis:
European equity markets closed mostly lower in the first trading session since indices closed for Easter holidays. Follows tenth consecutive weekly gain last week. Greece (2.0%), Denmark (1.4%) and Switzerland (1.2%) lead underperformers, whilst Norway +1.5%, Belgium +0.7% and Portugal +0.5% lead outperformers.
Early focus on US after pressure on Treasuries over European holiday period. Attention on largely in line core PCE, Powell comments and firmer-than-expected ISM manufacturing, which unexpectedly moved into expansion for first time in 16 months. Supportive for growth backdrop, yet also fits in with concerns about another premature dovish pivot, particularly with ~100 bp of easing already priced out from peak early in the year. Impetus for Europe this week to come from Eurozone inflation data, though unlikely to have much bearing on near-term ECB policy. No change in seen at next week's meeting and policymakers increasingly comfortable with June move, assuming disinflation progress continues.
On macro data front, final Eurozone manufacturing PMIs revised up after first Italian expansion in 12 months. German CPI eased, as expected. UK reading in expansionary territory after upward revision. BoE mortgage approval data jumps sharply, supporting expectations of a housing market recovery despite small dip in Nationwide March price data. UK BRC shop price inflation hit the lowest level in more than two years. ECB consumer expectations survey saw dip in near-term inflation outlook.
Amidst light corporate releases, of note out of DACHs, Siegfried Holding (SFZN.SW) announces Wolfgang Wienand is stepping down as CEO and will join Lonza (LONN.SW) in summer 2024. UBS Group (UBSN.SW) announces launch of new share repurchase program of up to $2B on 3-Apr whist Swiss Life Holding (SLHN.SW) completes CHF300M share buyback programme. In the UK, Frontier Developments (FDEV.LN) issues a trading update; says sales since publication of interim results are in-line with expectations; further, group sells publishing rights for Roller Coaster Tycoon 3 to Atari for $7M. Virgin Money UK (VMUK.LN) announced full cancellation of remaining Buyback Programme with immediate effect. Industry sources tell Sky News that AutoNation (AN) is at the early stages of exploring an offer for Inchcape's (INCH.LN) UK operations, which could be worth ~ £350M. France Retail Holdings S.à.r.l., an entity ultimately controlled by Daniel Křetínský, has acquired indirectly (via Casino Guichard-Perrachon S.A. (CO.FP)) 99.27% of voting rights in Cnova (CNV.FP).
Looking ahead to tomorrow's calendar (see - Europe Week Ahead: 1-Apr to 5-Apr attached), Hilton Food Group (HFG.LN), Bilendi (ALBLD.FP), Synergie (SGD.FP), Solutions 30 (S30.FP), Montana Aerospace (AERO.SW), Oberbank (OBS.AV) and Topps Tiles (TPT.LN) will be among other names to update investors, whilst the macro-calendar releases will includeEurozone Mar preliminary CPI, Feb unemployment rate, Sweden Mar services PMI, Italy Feb unemployment rate, Netherlands Mar preliminary CPI, Austria Mar preliminary CPI.
Digest:
Sectors - STOXX Europe 600:
Outperformers:
Energy+2.50%, Basic Resources +1.82%, Banks +0.14%, Chemicals +0.11%, Utilities (0.62%), Technology (0.68%), Insurance (0.73%),
Underperformers:
Real Estate (2.20%), Retail (2.19%), Travel & Leisure (2.12%), Media (2.00%), Construct & Mtls (1.74%), Health Care (1.65%), Personal Care Drug and Grocery Stores (1.50%), Consumer Products and Services (1.40%), Autos & Parts (1.21%), Ind Goods & Svcs (1.11%), Financial Svcs (0.94%), Telecom (0.92%),
Macro/Peripheral markets:
Geopolitics
Russian LNG Expansion Plan at Risk Due as US Sanctions Delay Exports - Bloomberg
Iran decides on response to Israeli strike that killed top commanders - The Guardian
Netanyahu speaks of "unintentional attack" on aid convoy in Gaza Strip - Handelsblatt
EU
UK
Britain is falling apart, yet Labour offers no answers - The telegraph
Rishi Sunak squirms over UK election date in local radio grilling - Politico
France
Proposals "by June": the Government relaunches work on the taxation of superprofits - BFMTV
Germany
The Real Reasons for Germany's Economic Weakness - Handelsblatt
Italy
Direct election of the premier, ok in the Senate committee - Ansa
Switzerland
SNB Flouts Global Practice by Promoting Insiders, Economists Say - Bloomberg
Portugal
Portugal's minority government to be sworn in, stability doubtful - Reuters
Ireland
Coveney stepping down from Cabinet, undecided on whether to run in next election - RTE
Company news:
Trading Higher:
+13.5% FDEV.LN (Frontier Developments £1.60, +0.19) -- trading update; sells publishing rights for RollerCoaster Tycoon 3 to Atari for $7M (15-Mar)
+11.5% IMM.LN (ImmuPharma £0.02, -0.00) -- initiated new intellectual property strategy to significantly enhance patent life and commercial value for its P140 technology platform
+10.4% VLTSA.FP (Voltalia €7.24, +0.68) -- FY earnings; initiated market perform at Bernstein
+9.4% NOLA.B.SS (Nolato SEK52.35, +4.51) -- signs long-term cooperation agreement with a major existing customer
+8.7% VPLAY.A.SS (Viaplay Group SEK2.00, +0.16) -- enter linear TV partnership in the Netherlands with Talpa Network
+8.0% EQS.FP (Equasens Group €55.40, +4.10) -- FY earnings
+5.7% DHER.GR (Delivery Hero €28.03, +1.52) -- initiated outperform at Bernstein
+5.7% HNSA.SS (Hansa Biopharma SEK30.76, +1.66) -- prelim Q1 revenue
+4.9% BAVA.DC (Bavarian Nordic A/S DKK162.50, +7.55) -- Commercial Launch of Mpox Vaccine in the U.S
+4.7% ZAL.NO (Zalaris NOK71.20, +3.20) -- to initiate a strategic review process
+4.2% SOI.FP (SOITEC €99.90, +4.00) -- initiated outperform at Bernstein
+3.9% TTE.FP (TotalEnergies €65.95, +2.49) -- initiated market perform at Bernstein
+3.8% BIOPOR.DC (BioPorto DKK1.36, +0.05) -- appoints interim CEO as permanent CEO
+3.7% KRN.GR (Krones €127.20, +4.50) -- Berenberg upgrade
+3.2% SUBC.NO (Subsea 7 NOK178.10, +5.55) -- initiated outperform at Bernstein
+3.1% CNV.FP (Cnova €1.49, +0.04) -- France Retail Holdings S.à.r.l. has acquired indirectly 99.27% of voting rights in company
+2.7% ENI.IM (Eni €15.05, +0.40) -- initiated outperform at Bernstein
+2.7% BP.LN (BP £5.09, +0.13) -- initiated outperform at Bernstein
+2.5% WINE.LN (Naked Wines £0.58, +0.01) -- confirms appointment of new CEO
+2.2% HOC.LN (Hochschild Mining £1.30, +0.03) -- completes of its Crespo project in southern Peru to Kina Mining Peru SAC
+2.0% BESI.NA (BE Semiconductor Industries €144.75, +2.85) -- Barclays upgrade
Trading Lower:
-66.2% REDX.LN (Redx Pharma £0.06, -0.12) -- proposes delisting from AIM
-53.5% SDRY.LN (Superdry £0.13, -0.15) -- notes update on appointment of interim CFO
-24.6% SHLF.NO (Shelf Drilling NOK19.15, -6.25) -- receives notice suspending operations of 4 jack-up rigs from Middle East customer; expects to impact financial guidance
-10.3% NODL.NO (Northern Drilling NOK0.35, -0.04) -- ruling of Technology and Construction Court regarding company's applications for leave to appeal the Awards on points of law have been refused
-6.2% SSAB.A.SS (SSAB SEK74.14, -4.86) -- to build fossil-free mini-mill in Sweden
-6.1% SFZN.SW (Siegfried Holding CHF865.00, -56.00) -- CEO steps down
-5.2% MTRS.SS (Munters Group SEK182.20, -9.90) -- Berenberg downgrade
-5.1% BIOA.B.SS (BioArctic SEK204.40, -11.00) -- Eisai submits sBLA for LEQEMBI (lecanemab-irmb) for IV maintenance dosing for treatment of early Alzheimer's disease to FDA
-4.6% SALM.NO (Salmar NOK682.50, -32.90) -- DnB Markets downgrade
-4.5% TEG.GR (TAG Immobilien €12.11, -0.57) -- initiated market perform at Bernstein
-2.3% DXRX.LN (Diaceutics £1.05, -0.03) -- co-founder and Executive Director cumulatively sold 1.5M ordinary shares in Diaceutics at 102p/sh on 28-Mar
EU companies reporting tomorrow:
Earnings: Hilton Food Group (HFG.LN), Bilendi (ALBLD.FP), Synergie (SGD.FP), Solutions 30 (S30.FP), Montana Aerospace (AERO.SW), Oberbank (OBS.AV)
Trading Update: Topps Tiles (TPT.LN)
Data:
Economics:
Feb Retail Sales
Netherlands +3.0% y/y vs consensus +1.6% and prior revised +2.5% from +1.8%
Switzerland (0.2%) y/y vs consensus +0.4% and prior +0.3%
UK
Nationwide House Prices +1.6% y/y vs consensus +2.4% and prior +1.2%
Shop price index +1.3% vs consensus +2.2% and prior +2.5% - BRC
Feb M4 Money Supply +0.5% m/m vs consensus +0.2% and prior (0.1%)
Mar Mortgage Approvals 60.38K vs consensus 56.5K and prior revised 56.09K from 55.23K
Mar Manufacturing PMI
Sweden 50.0 vs consensus 48.9 and prior revised 49.2 from 49.0
Spain 51.4 vs consensus 51.0 and prior 51.5
Switzerland 45.2 vs consensus 44.9 and prior 44.0
Norway 50.8 vs consensus 52.1 and prior revised 52.0 from 51.9
Italy 50.4 vs consensus 48.8 and prior 48.7
France 46.2 vs preliminary 45.8
Eurozone 46.1 vs preliminary 45.7
Germany 41.9 vs preliminary 41.6
UK 50.3 vs preliminary 49.9
Mar Unemployment
Spain Change (33.4K) vs consensus +10.0K and prior (7.5K)
Austria Rate 6.9% vs consensus 7.5% and prior 7.6%
Mar
Germany Preliminary CPI +2.2% y/y vs consensus +2.2% and prior +2.5%
Ireland Preliminary HICP +1.7% y/y vs consensus +2.3% and prior +2.3%
Greece business expectations in industry 111.9 vs prior 101.6 and year-ago 109.2 - IOBE
Markets:
WTI Crude (May 24): +$1.30 or +1.55% to $85.01
€-$ +0.0022 or +0.21% to 1.0768
£-$ +0.0021 or +0.17% to 1.2572
€-£ +0.0004 to 0.8565
S&P 500 (0.89%)
Performance year-to-date
FTSE 100: +2.61%
DAX: +9.14%
CAC: +7.78%
MIB: +13.19%
Stoxx 600: +6.18%
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