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StreetAccount Summary - EU Market Recap: FTSE 100 +0.07% to 8426.12, DAX +0.33% to 18767.06, CAC40 +0.37% to 8197.54, STOXX 600 +0.19% to 523.91

May 20 ,2024

  • Synopsis:

    • European equity markets ended mostly higher with pan-European indices just below session highs.

    • Of note, markets in Denmark, Iceland, Norway and Switzerland were closed, with a Bank Holiday occurring in these, as well as other countries including France, Germany and the Netherlands.

    • Leading outperformers were Sweden +1.2% and Greece +0.8%, whilst joining Italy in leading underperformers were Belgium and the Spain, both little changed. Italy's performance was impacted by a large number of companies going ex-dividend.

    • Central bank narrative continued with comments leaning dovish with summer rate cuts likely. Hawkish ECB Governing Council member Vasle the latest to signal June as the appropriate time to begin lowering rates, while keeping an "open mind" on subsequent moves based on incoming data (Bloomberg). Vasle cited currently contained wage dynamics and inflation meeting expectations as supportive of a June cut. Also, Bloomberg reported that ECB hawk Kazaks stated that the pace of interest-rate cuts must align with the gradual slowdown of Eurozone inflation. He indicated that June is an appropriate time to start lowering borrowing costs, but subsequent decisions will depend on incoming data.

    • Meanwhile in the UK, BoE deputy governor Broadbent said possible Bank Rate could be cut in the summer if things evolve as it forecasts. He highlighted that whatever the priors of individual members of the MPC, it will continue to focus on incoming data. Still in the UK, data from property portal Rightmove showed cost of homes coming to the market hit a record high in May after an 0.8% increase on the month (Reuters). Note, pace of rise the weakest so far in 2024 and prices up just 0.6% compared with the same period a year ago. Rightmove said May typically a strong month for price growth with new records having been set in 12 of the previous 22 years, but not a sign of a return to strong demand (CityAM).

    • In corporate news, Ryanair Holdings (RYA.ID) reported FY earnings including net income attributable €1.92B vs FactSet €1.89B and said it expects to grow passenger traffic in FY25 if Boeing deliveries normalize. The airline also announced a €700M share buyback to be formally launched later this week. In the UK, Kainos Group (KNOS.LN) posted FY EPS 46.5p ex-items vs FactSet 44.8p and maintains a positive outlook as its key business segments are positioned for further growth in the near and medium-term.

    • On M&A front, Keywords Studios (KWS.LN) confirmed it is in advanced discussions with EQT regarding possible cash offer of 2,550p/share and Anglo American (AAL.LN) holders are reportedly seeking simpler offer from BHP. In Spain, Telefonica (TEF.SM) is among other suitors exploring a bid for Avatel Telecom, whilst Iberdrola (IBE.SM) agreed to acquire Avangrid (AGR) for $35.75/share. Also, Tubacex (TUB.SM) divested its 49% stake in tubular solutions business to Mubadala.

  • Digest:

    • Sectors - STOXX Europe 600:

      • Outperformers

        • Ind Goods & Svcs +0.96%, Technology +0.81%, Retail +0.69%, Basic Resources +0.61%, Travel & Leisure +0.57%, Chemicals +0.40%, Media +0.38%, Financial Svcs +0.34%

      • Underperformers

        • Autos & Parts (0.76%), Real Estate(0.43%), Utilities (0.38%), Insurance (0.22%), Persnl & HHold Goods (0.21%), Banks (0.19%), Food & Beverage (0.11%), Health Care (0.02%), Construct & Mtls +0.11%, Oil & Gas +0.12%, Telecom +0.18%

    • Macro/Peripheral markets:

      • EU

        • Steelmakers suggest lagging EU on carbon tax will see shipments 'diverted' to Britain - FT

      • G7

        • G7 warms to plan for Trump-proofing Ukraine aid - FT

      • Geopolitics

        • US, EU move closer to using Russian assets to help Ukraine - NYTimes

        • Iran president Ebrahim Raisi confirmed dead - The Times

      • ECB

        • ECB's Vasle indicated June likely appropriate for starting rate cuts, though future decisions remain open - Bloomberg

      • UK

        • UK set for slower inflation than Eurozone and US - FT

        • UK's post Brexit border arrangements to cost $6B - Reuters

        • Britain's Conservatives trail Labour by 18 points, says Opinium poll - Reuters

        • From NICE... to not so nice - speech by Ben Broadbent - BoE release

        • Bank of England on course for summer rate cut, suggests deputy governor - Telegraph

      • Ireland

        • Slowdown in supply of new homes to put upward pressure on rents on 2024 - Daft.ie report

        • Ireland's push to shore up share of ECB staff triggers call for nationality quotas - FT

      • Finland

        • Finland to present plan to push back migrants on Russian border - Euractiv

    • Company news:

      • Notable Gainers

        • +57.6% KWS.LN (Keywords Studios £23.16, +8.46) -- possible cash offer by EQT at 2,550p/share

        • +17.3% KNOS.LN (Kainos Group £12.46, +1.84) -- FY earnings

        • +11.0% KGH.LN (Knights Group Holdings £1.57, +0.16) -- FY trading update

        • +6.6% VAIAS.FH (Vaisala €41.70, +2.60) -- €25M order

        • +6.4% BITTI.FH (Bittium €6.98, +0.42) -- Inderes upgrade

        • +6.1% TUB.SM (Tubacex €3.38, +0.20) -- divest 49% in its tubular solutions business to Mubadala

        • +6.0% FARN.LN (Faron Pharmaceuticals £2.65, +0.15) -- initial data from Phase 2 of BEXMAB

        • +4.9% NEXN.LN (Nexxen International £2.36, +0.11) -- Q1 earnings

        • +4.3% UBI.FP (Ubisoft Entertainment €22.19, +0.91) -- Cantor Fitzgerald upgrade

        • +3.2% PRTC.LN (PureTech Health £2.27, +0.07) -- $100M tender offer at 250p per share

        • +2.5% VICO.SS (Vicore Pharma Holding SEK20.20, +0.50) -- final results from Buloxibutid phase 2a AIR trial in patients with idiopathic pulmonary fibrosis

        • +2.2% SDIP.B.SS (Sdiptech SEK314.60, +6.80) -- initiated buy at SEB

        • +1.2% AIR.FP (Airbus SE €160.96, +1.98) -- Saudia Group signs a firm order for an additional 105 Airbus A320neo Family aircraft

        • +0.6% ABVX.FP (Abivax €13.00, +0.08) -- initiated buy at BTIG

        • +0.5% NXR.LN (Norcros £2.16, +0.01) -- completes sale of Johnson Tiles UK

      • Notable Decliners

        • -4.3% BST.IM (Banca Sistema €1.60, -0.07) -- publishes 2024-26 Strategic Plan; Targets 2026 net income of €34M

        • -4.0% SCR.FP (SCOR SE €29.00, -1.22) -- HSBC downgrade

        • -2.3% AFM.LN (Alpha Financial Markets Consulting £4.25, -0.10) -- Peel Hunt downgrade

        • -0.9% RYA.ID (Ryanair Holdings €18.14, -0.16) -- FY earnings; €700M share buyback approved

        • -0.3% AML.LN (Aston Martin Lagonda Global Holdings £1.41, -0.00) -- HSBC upgrade

    • EU companies reporting tomorrow:

      • Earnings:

        • DACHs: CA Immobilien Anlagen (CAI.AV), Idorsia (IDIA.SW), Orascom Development Holding (ODHN.SW),

        • Nordics: Better Collective (BETCO.SS),

        • Southern Europe: Assicurazioni Generali (G.IM)

        • UK: Assura (AGR.LN), Avon Protection (AVON.LN), Cranswick (CWK.LN), Diaceutics (DXRX.LN), FD Technologies (FDP.LN), Greencore Group (GNC.LN), Pennon Group (PNN.LN), Shoe Zone (SHOE.LN), SSP Group (SSPG.LN), Topps Tiles (TPT.LN), Watkin Jones (WJG.LN)

  • Data:

    • Economics:

      • Portugal Apr PPI (0.8%) y/y vs consensus (0.6%) and prior revised (1.5%) from (1.4%)

    • Markets:

      • WTI Crude (Jun 24): ($0.20) or (0.25%) to $79.86

      • €-$ (0.0009) or (0.08%) to 1.0862

      • £-$ +0.0009 or +0.07% to 1.2706

      • €-£ (0.0014) to 0.8549

      • S&P 500 +0.40%

        • Performance year-to-date

        • FTSE 100: +8.96%

        • DAX: +12.03%

        • CAC: +8.67%

        • MIB: +14.72%

        • Stoxx 600: +9.38%

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