May 08 ,2024
Synopsis:
European equity markets closed higher. Food/Beverage, Insurance and Media led gainers. Basic Resources, Autos/Parts and Financial Services lagged. Follows positive session on Tuesday.
Note that Nordic and Swiss markets remain closed Thursday for a bank holiday.
Sentiment in Europe supported by strong earnings figures in energy and food/beverage sectors. No change in broader narrative.
In central banks, Riksbank cut rates by 25 bps, as expected. Statement said it sees two more rate cuts in second half of the year. German industrial production slightly better than forecast, yet still softer on the month. Follows unexpected drop in factory orders on Tuesday. Limited UK developments. Times shadow MPC said BoE should consider rate cut in June if inflation and wages continue to ease. Several reports discuss likelihood of Friday's GDP data confirming UK economy exited recession in first quarter.
On the macro front, Germany Industrial Production drops by (0.4%) m/m in March vs consensus (0.6%) and prior revised +1.7% from +2.1%. Was the first drop in production since last December. Less volatile three-month comparison showed production +0.1% higher in period from January to March 2024 than in previous three months. On a y/y basis, production fell (3.3%), slightly better than (3.6%) drop forecast and up on prior (5.3%) drop. Looking ahead, the German economist institute IW expects Germany's economy to continue to struggle in 2024 despite some signs of improvement at the start of the year, Reuters reports. Forecast 0% growth despite a 0.2% expansion in first quarter. Highlighted weakness in manufacturing and construction. Consumption the only bright spot, but not enough to generate a full upswing, which requires increase in business investment. Elsewhere, Italy Mar Retail Sales flat m/m vs consensus +0.2% and prior +0.1%.
Busy on the corporate front, DACH region companies kicked off the session, Fresenius (FRE.GR) Q1 EPS beats and raises FY organic revenue guidance to +4-7% vs prior guidance +3-6%, Siemens Energy (ENR.GR) Q1 EPS miss, revenue, profit before special items, orders all beat and raises FY24 outlook, Lanxess (LXS.GR) Q1 adj EPS, revenue, EBITDA beat; offered FY guidance, Aurubis (NDA.GR) Q2 operating net income ahead of estimates, Continental (CON.GR) Q1 net income drops y/y but confirms FY outlook, Bayerische Motoren Werke (BMW.GR) Q1 EPS and EBIT beat, revenue missed and reiterates FY guidance and expects to see slight growth in customer deliveries worldwide in 2024, Munich Re (MUV2.GR) confirms Q1 prelim net result, Knorr-Bremse (KBX.GR) Q1 operating EBIT, revenue, orders all beat; guidance reiterated, Verbund (VER.AV) Q1 net income a touch softer vs expectations. In France, Alstom (ALO.FP) FY adjusted net income miss by a wide margin, issues guidance for FY24/25, and details its €2B inorganic deleveraging plan. In Spain, Amadeus IT Group (AMS.SM) Q1 EPS in line, Endesa (ELE.SM) Q1 net income miss, and Logista Integral (LOG.SM) H1 net income increases y/y and guides sustained growth for FY24. In Benelux, Koninklijke Ahold Delhaize (AD.NA) Q1 Underlying EPS beats and confirms FY guidance while Anheuser-Busch InBev (ABI.BB) Q1 underlying EPS, revenue, aEBITDA all beat, reiterated guidance. Out of Nordic region, Securitas (SECU.B.SS) Q1 EPS beat, Skanska (SKA.B.SS) miss, Bavarian Nordic A/S (BAVA.DC) Q1 EBITDA miss. In the UK, boohoo Group (BOO.LN) FY EPS miss, Informa (INF.LN) said all businesses delivering ahead of or in line with 2024 targets and 2024 share buyback program increased by c.50% to £500M while JD Wetherspoon (JDW.LN) issues 13-week trading update to 28-Apr-24: like-for-like sales +5.2% y/y and expects profits in current financial year to be towards top of market expectations.
Digest:
Sectors - STOXX Europe 600:
Outperformers:
Food, Beverage and Tobacco +1.71%, Insurance +1.08%, Media +0.93%, Ind Goods & Svcs +0.92%, Construct & Mtls +0.63%, Personal Care Drug and Grocery Stores +0.53%, Health Care +0.49%
Underperformers:
Basic Resources (1.29%), Autos & Parts (1.19%), Financial Svcs (0.65%), Real Estate (0.62%), Telecom (0.37%), Technology (0.15%), Retail (0.13%), Banks (0.06%), Travel & Leisure (0.01%), Chemicals +0.04%, Consumer Products and Services +0.27%, Energy+0.27%
Macro:
Finland:
Will hold elections to the European Parliament on 9-Jun - release
Germany:
German economist institute IW expects Germany's economy to continue to struggle in 2024 despite some signs of improvement at the start of the year - Reuters
German industrial output down, but still beat expectations in March - Baha
German Chancellor Scholz assures planned pensions reform will proceed, refuting rumors of coalition tensions - Bloomberg
Ireland:
Increased labour costs hurting businesses in Ireland - KPMG Enterprise Barometer 2024
Sweden:
Reintroduces border controls at Sweden's internal border from and including 12-May to 11-Nov-24; cites serious security situation - release
UK:
BoE should consider June rate cut - London Times shadow MPC
Company news:
Notable Gainers
+36.2% MXCT.LN (MaxCyte £3.95, +1.05) -- earnings
+28.4% AG1.AV (Auto1 Group €6.83, +1.51) -- earnings
+27.1% PHC.LN (Plant Health Care £0.04, +0.01) -- trading update
+12.8% ENR.GR (Siemens Energy €22.56, +2.56) -- earnings; Siemens Energy initiates comprehensive measures for operational restructuring of Siemens Gamesa; exact impact of job cuts cannot yet be quantified
+12.7% IRLAB.A.SS (IRLAB Therapeutics SEK11.50, +1.30) -- earnings
+12.4% HEX.NO (Hexagon Composites NOK21.35, +2.35) -- earnings
+11.4% BIOPOR.DC (BioPorto DKK1.63, +0.17) -- earnings
+10.9% PUM.GR (Puma €50.14, +4.91) -- earnings
+10.0% LNZ.AV (Lenzing €34.15, +3.10) -- earnings
+9.8% ODF.NO (Odfjell NOK192.00, +17.20) -- earnings
+9.4% ALO.FP (Alstom €17.11, +1.47) -- earnings
+9.1% JEN.GR (Jenoptik €27.70, +2.32) -- earnings
+8.6% BUSER.SS (Bambuser SEK0.69, +0.05) -- earnings
+8.1% DIGIA.FH (Digia €5.62, +0.42) -- earnings
+7.8% CAMX.SS (Camurus SEK535.00, +38.80) -- earnings
+7.8% EURN.BB (Euronav €17.29, +1.25) -- earnings
+7.8% OCN.LN (Ocean Wilsons Holdings £14.55, +1.05) -- earnings
+7.3% RELAIS.FH (Relais Group €12.50, +0.85) -- earnings
+6.7% EAH.LN (Eco Animal Health Group £1.20, +0.08) -- updates on ECOVAXXIN MS
+6.4% DNO.NO (DNO ASA NOK11.17, +0.67) -- earnings
+6.3% BVB.GR (Borussia Dortmund €4.17, +0.25) -- earnings
+5.5% KBX.GR (Knorr-Bremse €73.45, +3.85) -- earnings
+5.5% IDEX.NO (IDEX Biometrics NOK1.84, +0.10) -- partnership to deploy smart cards across Asia and globally
+5.5% SFL.IM (Safilo Group €1.24, +0.06) -- earnings
+5.4% POST.AV (Oesterreichische Post €31.50, +1.60) -- earnings
+5.3% OSB.LN (OSB Group £4.52, +0.23) -- trading update
+4.6% COIC.SS (Concentric SEK206.00, +9.00) -- earnings
+4.5% MULTI.NO (Multiconsult NOK149.50, +6.50) -- earnings
+4.3% JDW.LN (JD Wetherspoon £7.59, +0.32) -- trading update
+4.0% ABI.BB (Anheuser-Busch InBev €58.78, +2.24) -- earnings
+3.5% COLUM.DC (Columbus DKK10.25, +0.35) -- earnings
Notable Decliners
-9.2% DOCM.SW (DocMorris CHF75.00, -7.60) -- CFO steps down
-8.3% APH.LN (Alliance Pharma £0.29, -0.03) -- Fy prelim not publsihed today; CEO steps down
-6.9% SFQ.GR (SAF-HOLLAND €17.22, -1.28) -- earnings
-6.7% S92.GR (SMA Solar Technology €46.62, -3.36) -- earnings
-6.7% ETX.LN (e-Therapeutics £0.09, -0.01) -- last day of trading in its ordinary shares on AIM
-6.5% IOS.GR (IONOS Group €23.80, -1.65) -- earnings
-6.1% MAIRE.IM (Maire Tecnimont €7.19, -0.47) -- placing; Mediobanca downgrade
-5.9% AZT.NO (ArcticZymes Technologies NOK23.75, -1.50) -- earnings
-5.8% AFX.GR (Carl Zeiss Meditec €93.90, -5.75) -- earnings
-5.8% VAR1.GR (VARTA €11.41, -0.70) -- RENK Group (R3NK.GR) will replace Varta AG (VAR1.GR) in the SDAX, effective 9-May
-5.6% GFT.GR (GFT Technologies €27.00, -1.60) -- earnings
-5.4% B4B.GR (METRO €4.88, -0.28) -- earnings
-5.2% FG.SS (Fasadgruppen Group SEK64.40, -3.50) -- earnings
-5.0% FYB.GR (Formycon €42.60, -2.25) -- earnings
-4.9% A28890.GR (CompuGroup Medical €27.72, -1.42) -- earnings
-4.8% HOFI.SS (Hoist Finance SEK57.10, -2.90) -- earnings
-4.7% PRS.NO (Prosafe NOK36.65, -1.80) -- earnings
-4.7% VLA.FP (Valneva €3.25, -0.16) -- earnings
EU companies reporting tomorrow:
Earnings:
Benelux: CTP (CTPNV.NA), Titan Cement International (TITC.BB)
Italy: Enel (ENEL.IM), Prysmian (PRY.IM), Recordati (REC.IM), UnipolSai Assicurazioni (US.IM), Unipol Gruppo (UNI.IM), Pirelli & C. (PIRC.IM), Banca Generali (BGN.IM), Brembo (BRE.IM), Acea (ACE.IM), Azimut Holding (AZM.IM), BFF Bank (BFF.IM), Carel Industries (CRL.IM), Cementir Holding (CEM.IM), Banca IFIS (IF.IM), Piaggio & C (PIA.IM), Banco di Desio e della Brianza (BDB.IM), Ascopiave (ASC.IM), illimity Bank (ILTY.IM), Toscana Aeroporti (TYA.IM)
Portugal: EDP-Energias de Portugal (EDP.PL), EDP Renovaveis (EDPR.PL), Redes Energeticas Nacionais (RENE.PL)
Spain: Telefonica (TEF.SM), Ferrovial (FER.SM), Gestamp Automocion (GEST.SM), Melia Hotels International (MEL.SM), Construcciones y Auxiliar de Ferrocarriles (CAF.SM)
UK: 3i Group (III.LN), Airtel Africa (AAF.LN)
Trading Update: Flutter Entertainment (FLTR.LN), IMI (IMI.LN), ITV (ITV.LN), Derwent London (DLN.LN), Harbour Energy (HBR.LN), Balfour Beatty (BBY.LN), Rathbones Group (RAT.LN), John Wood Group (WG.LN), Synthomer (SYNT.LN), Salvatore Ferragamo (SFER.IM), Buzzi (BZU.IM), Technogym (TGYM.IM)
Data:
Economics:
Italy Mar Retail Sales +2.0% y/y vs consensus (0.4%) and prior +2.4%; 0.0% m/m vs consensus +0.2% and prior +0.1%
Germany Mar Industrial Production (0.4%) m/m vs consensus (0.6%) and prior revised +1.7% from +2.1%
Netherlands Mar Manufacturing Production (1.5%) m/m vs consensus (0.4%) and prior revised +1.1% from +1.4%
Denmark Mar Trade Balance DKK15.9B vs consensus DKK30.0B and prior revised DKK23.7B from DKK26.3B
Norway Mar Manufacturing Production +5.4% m/m vs consensus (0.4%) and prior (1.1%)
Markets:
WTI Crude (Jun 24): +$0.41 or +0.52% to $78.79
€-$ (0.0004) or (0.04%) to 1.0752
£-$ (0.0013) or (0.10%) to 1.2497
€-£ +0.0002 to 0.8602
S&P 500 (0.06%)
Performance year-to-date
FTSE 100: +8.03%
DAX: +10.43%
CAC: +7.80%
MIB: +12.52%
Stoxx 600: +7.68%
This information and data is provided for general informational purposes only. The Bank of New York Mellon and our information suppliers do not warrant or guarantee the accuracy, timeliness or completeness of this information or data. We provide no advice nor recommendation or endorsement with respect to any company or securities. We do not undertake any obligation to update or amend this information or data. Nothing herein shall be deemed to constitute an offer to sell or a solicitation of an offer to buy securities.
Please refer to "Terms Of Use".
DEPOSITARY RECEIPTS:
NOT FDIC, STATE OR FEDERAL AGENCY INSURED
MAY LOSE VALUE
NO BANK, STATE OR FEDERAL AGENCY GUARANTEE