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StreetAccount Summary - EU Market Recap: FTSE 100 +0.63% to 8433.76, DAX +0.46% to 18772.85, CAC40 +0.38% to 8219.14, STOXX 600 +0.77% to 520.76

May 10 ,2024

  • Synopsis:

    • European equity markets ended higher. Follows positive close on Thursday. Better risk sentiment attributed to renewed confidence in rate cuts. Retail, construction/materials, utilities and financials led gainers; chemicals, real estate and autos/parts main laggards.

    • On the macro front, attention on UK GDP data, which was much stronger than expected on a quarterly and monthly basis; confirming signals seen from PMIs since the start of the year. Takeaways from yesterday's BoE decision highlight potential for June rate cut if inflation and wage growth continue to ease in the interim. Governor Bailey also flagged possibility of more aggressive rate cuts data if data evolves in line with forecasts, which showed inflation below target in 2026 and 2027. More positive commentary on European equity markets amid expectations for European central banks to divergence from Fed policy in the summer.

    • In political news, Spain PM Sanchez is aiming to wrest control of wealthy Catalonia in 12-12-May vote from separatists who wield outsized influence over Spanish politics. Opinion polls forecast comfortable lead for Socialist candidate Illa, with separatist party ERC and hardline rival Junts neck and neck for second place.

    • On the reporting front, several Italian names posted their updates, including Pirelli & C. (PIRC.IM), Mediobanca (MB.IM), Salvatore Ferragamo (SFER.IM) Unipol Gruppo (UNI.IM) and Enel (ENEL.IM), with the latter also finalizing the sale of its generation assets in Peru. Elsewhere, EDP-Energias de Portugal (EDP.PL), Melia Hotels International (MEL.SM), REC Silicon (RECSI.NO) reported Q1.

    • In M&A news, FT reported that Anglo American (AAL.LN) South African shareholders, collectively holding more than 15% stake, are open to an improved takeover from BHP (BHP.AU) despite government concerns; in another deal, Fincantieri (FCT.IM) to acquire Leonardo (LDO.IM) underwater armaments systems business, with the transaction funded by a €500M capital increase; in Spain, Banco de Sabadell (SAB.SM) informed the CNMV that the documentation provided by BBVA (BBVA.SM) violate the tender offer rules and introduced incomplete information that may affect the market.

    • Looking ahead to next week EU econ-calendar, notable releases on Monday will include, amongst others, Switzerland Q2 consumer climate - SECO and Portugal Apr final CPI. Of note, Israel is closed for Memorial Day.

  • Digest:

    • Sectors - STOXX Europe 600:

      • Outperformers

        • Retail +1.52%, Construct & Mtls +1.50%, Utilities +1.46%, Financial Svcs +1.44%, Basic Resources +1.29%, Insurance +1.15%, Oil&Gas+1.07%, Ind Goods & Svcs +0.92%, Technology +0.86%

      • Underperformers

        • Chemicals (0.68%), Real Estate (0.62%), Autos & Parts (0.37%), Media +0.13%, Consumer Products and Services +0.24%, Telecom +0.28%, Personal Care Drug and Grocery Stores +0.54%, Food, Beverage and Tobacco +0.67%, Banks +0.69%, Health Care +0.72%

    • Macro:

      • Central Banks:

        • Some ECB Officials Saw Conditions for Rate Cut Met in April -- Bloomberg

        • BOE Chief Economist Warns on Being 'Seduced' by Inflation Data -- Bloomberg

      • EU:

        • Polish farmers march against 'green poison' EU climate change rules -- Reuters

      • UK:

        • UK exits recession with fastest growth in nearly three years -- Reuters

        • Sunak says it'll take time for people to feel better -- BBC

      • Germany:

        • The U.S. is now Germany's biggest trading partner - taking over from China -- CNBC

      • France:

        • French imports of Russian fertiliser surge since start of Ukraine war -- rfi

    • Company news:

      • Notable Gainers

        • +20.5% XBRANE.SS (Xbrane Biopharma SEK0.23, +0.04) -- partner with Valorum Biologics to commercialize ranibizumab biosimilar candidate in the US

        • +17.9% SFOR.LN (S4 Capital £0.53, +0.08) -- Q1 trading update, initiated hold at Deutsche Numis

        • +10.6% BELYS.BB (Belysse Group €0.89, +0.09) -- Q1 trading update

        • +7.3% FSM (Fluidra €23.24, +1.58) -- JPMorgan upgrade

        • +6.0% MSLH.LN (Marshalls £3.07, +0.18) -- initiated buy at Deutsche Numis

        • +5.2% CRH.LN (CRH plc £67.74, +3.36) -- Q1 earnings; continues share buyback with a further $300M program

        • +4.7% PEN.NO (Panoro Energy NOK31.15, +1.40) -- prelim Q1 revenue; production update

        • +4.0% EDP.PL (EDP-Energias de Portugal €3.83, +0.15) -- Q1 earnings

        • +3.8% ENEL.IM (Enel €6.71, +0.25) -- Q1 earnings

        • +3.7% AGAS.NO (Avance Gas Holding NOK173.40, +6.20) -- completes sale of sixth dual fuel VLGC newbuilding for $120M

        • +3.5% PBB.GR (Deutsche Pfandbriefbank €5.04, +0.17) -- citi upgrade

        • +3.4% CRST.LN (Crest Nicholson Holdings £2.06, +0.07) -- initiated buy at Deutsche Numis

        • +3.3% ZAL.GR (Zalando €25.06, +0.81) -- Berenberg upgrade

        • +3.1% MEL.SM (Melia Hotels International €7.78, +0.24) -- Q1 earnings

        • +3.1% MUV2.GR (Munich Re €454.50, +13.80) -- BofA upgrade

        • +3.0% LDO.IM (Leonardo €22.83, +0.66) -- disposal of underwater business "Underwater Armaments Systems" to Fincantieri

        • +2.8% LR.FP (Legrand €103.65, +2.85) -- Citi upgrade

        • +2.4% MB.IM (Mediobanca €14.51, +0.34) -- Q3 earnings

        • +2.3% BWY.LN (Bellway £27.16, +0.62) -- initiated buy at Deutsche Numis

        • +2.3% CRN.LN (Cairn Homes £1.45, +0.03) -- AGM trading update; initiated buy at Deutsche Numis

        • +1.4% AAL.LN (Anglo American £27.76, +0.38) -- Anglo American's South African shareholders, collectively holding more than 15% stake, open to improved takeover from BHP despite government concerns - FT

      • Notable Decliners

        • -26.3% BFF.IM (Banca Farmafactoring €8.08, -2.88) -- Q1 earnings; BNP Paribas Exane, Mediobanca and Equita downgrades

        • -19.4% MTC.LN (Mothercare £0.05, -0.01) -- FY trading update

        • -8.9% GETI.B.SS (Getinge SEK211.40, -20.60) -- FDA alerts health care providers about safety, quality concerns with company cardiovascular devices; Kepler Cheuvreux and Nordea downgrade

        • -6.5% TTG.LN (TT Electronics £1.61, -0.11) -- AGM trading update

        • -5.5% RMV.LN (Rightmove £5.46, -0.32) -- FY trading update

        • -3.5% RECSI.NO (REC Silicon NOK9.97, -0.37) -- Q1 earnings

        • -1.7% RENE.PL (Redes Energeticas Nacionais SGPS €2.34, -0.04) -- Q1 earnings

    • EU companies reporting tomorrow:

      • Earnings:

        • DACHs: K+S (SDF.GR), Hochtief (HOT.GR), Salzgitter (SZG.GR), Energiekontor (EKT.GR), adesso (ADN1.GR), ProCredit Holding (PCZ.GR), JDC Group (JDC.GR) Oberbank (OBS.AV)

        • Nordics: Bure Equity (BURE.SS)

        • Southern Europe: Ferrovial (FER.SM), Almirall (ALM.SM), NH Hotel Group (NHH.SM), Sanlorenzo (SL.IM), EuroGroup Laminations (EGL.IM), Pharmanutra (PHN.IM), SECO (IOT.IM), RCS MediaGroup (RCS.IM), Acinque (AC5.IM), Fiera Milano (FM.IM), Newlat Food (NWL.IM), Esprinet (PRT.IM)

        • UK: Diploma (DPLM.LN), Burford Capital (BUR.LN), Victrex (VCT.LN), Cerillion (CER.LN), Team Internet Group (TIG.LN)

  • Data:

    • Economics:

      • UK

        • March

          • Construction Output y/y (2.2%) vs consensus (1.2%) and prior revised to (2.0%) from (2.0%)

          • Industrial Production y/y +0.5% vs consensus +0.3% and prior revised to +1.0% from +1.4%

          • Manufacturing Production +2.3%% y/y vs consensus +1.8% and prior revised +2.6% from +2.7%

          • Visible Trade Balance (£13.97B) vs consensus (£14.4B) and prior revised to (£14.13B) from (£14.21B)

        • Apr NIESR monthly GDP tracker +0.7% vs consensus +0.3% and prior revised +0.6% from +0.4% (earlier, 8:00 ET)

        • Q1 Preliminary GDP+0.2% y/y vs consensus 0.0% and prior (0.2%)

      • Italy March Industrial Production y/y (wda) (3.5%) vs consensus (1.4%) and prior (3.1%)

      • Greece Mar Industrial Production (0.6%) y/y vs prior +1.6%

    • Markets:

      • WTI Crude (24-Jun): ($0.09) or (0.11%) to $79.17

      • €-$ (0.0013) or (0.12%) to 1.0769

      • £-$ (0.0009) or (0.07%) to 1.2515

      • €-£ (0.0006) to 0.8606

      • S&P 500 (0.01%)

      • Performance year-to-date:

        • FTSE 100: +9.06%

        • DAX: +12.07%

        • CAC: +8.96%

        • MIB: +14.19%

        • Stoxx 600: +8.72%

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