Jun 28 ,2024
Synopsis:
European equity markets closed mixed. Norway and Sweden both +0.5% lead outperformers ,whilst Portugal and France (0.7%) lead underperformers.
Largely in-line US May core PCE report the latest sign of continued disinflation traction, though consumer spending growth was weaker than expected. Lot of attention on Biden-Trump debate with press takeaways focused on Biden's underwhelming performance that heightened concerns about his age. Trump's election odds also shortened following debate. Nothing substantive from an economic standpoint with two candidates defending their own records and criticizing the other's.
In Europe, attention on first round of French elections on Sunday. Current polls show strong support for Le Pen's National Rally (35%), followed by the left-wing alliance (27%) and Macron's Renaissance party (20%). A second round on 7-July likely if no party secures over 50% of the votes. Investors worry about France's fiscal stability, with both far-right and left-wing parties proposing policies that could increase public debt or taxes.
On macro data front, final UK Q1 GDP revised up to 0.7% versus 0.6%. Lloyds business barometer fell back in June. Spanish inflation surprised on the upside, though eased from prior update. French inflation slowed by a larger-than-expected amount. German unemployment increase higher-than-expected, as slowdown in economy hits jobs. Swiss KOF leading indicator beat expectations.
In M&A news, Nokia (NOKIA.FH) acquired Infinera for $2.3B (INFN); Saudi Aramco looks set to acquire a ~10% stake in Renault & Geely Horse Powertrain JV; on the rumours front, Societe Generale (GLE.FP) wants to sell its private banking subsidiary in Switzerland, whilst Italgas (IG.IM) sees the 2i Rete Gas SpA acquisition to be finalised by H1 of 2025; in Spain, Criteria Caixa now holds a 9.99% stake in in Telefónica (TEF.SM); in the UK, Keywords Studios (KWS.LN) has received updated possible cash by EQT Group (EQT.SS) of 2,450p/sh and EQT (EQT.SS) sold a majority stake in real estate platform idealista in a €2.9B transaction. Furhter in the UK, Delivery Hero (DHER.GR) appointed an interim CFO; elsewhere, Philips (PHIA.NA) updated its instructions of use for BiPAP V30, BiPAP A30, BiPAP A40 stemming from interruptions and/or loss of therapy. In Sweden, Volvo Cars (VOLCAR.B.SS) issued a statement following Polestar FY23 results andicating that it will include non-material adjustment in its Q2 results.
Looking ahead to monday's calendar (see - Europe Week Ahead: 1-Jul to 5-Jul attached) Porvair (PRV.LN) will be among other names to update investors, whilst the macro-calendar releases will include Italy, Norway, Spain, Sweden Jun manufacturing PMIs and final reads for Eurozone, France, Germany and UK, Germany Jun. preliminary CPI, Switzerland May retail sales, UK May mortgage approvals, M4 money supply, Jun house price index - Nationwide, Greece May unemployment rate, Ireland Jun preliminary HICP, Netherlands May retail sales, Austria Jun unemployment rate, Portugal May unemployment rate
Digest:
Sectors - STOXX Europe 600:
Outperformers:
Technology +0.45%, Telecom +0.42%, Autos & Parts +0.26%, Basic Resources +0.19%, Energy+0.17%, Real Estate +0.13%, Financial Svcs +0.06%, Health Care (0.04%), Banks (0.20%), Travel & Leisure (0.22%),
Underperformers:
Consumer Products and Services (1.25%), Chemicals (1.10%), Media (0.99%), Personal Care Drug and Grocery Stores (0.81%), Food, Beverage and Tobacco (0.71%), Retail (0.68%), Utilities (0.57%), Construct & Mtls (0.55%), Ind Goods & Svcs (0.38%),
Macro/Peripheral markets:
Geopolitics
Biden will debate Trump in September, president's advisers say - The Telegraph
Russian defence minister wants action to counter 'provocations' from US drones in Black Sea - Reuters
Central banks
SNB Held Off on Interventions in First Quarter Amid Franc Slump - Bloomberg
EU
UK
Economic growth even better than 'gangbusters' in ray of hope for Sunak - The Telegraph
Starmer admits to 'old fashioned mistake' on pension tax policy - FT
Rishi Sunak condemns racist term used about him by Reform UK campaigner - BBC
Banks Press UK to Delay Basel Rules Again as US Process Drags On - Bloomberg
France
Germany
Import prices are barely falling - inflation expected to fall - Handelsblatt
Greece
Hatzidakis promises 'social exchange' housing program by year's end - ekathimerini
Italy
The oppositions open the table for the referendum on Autonomy - Ansa
Company news:
Trading Higher:
+12.0% ECR.SM (Ercros €3.91, +0.42) -- Esseco Industrial offers to acquire company for €3.84/share in cash
+10.3% ANOT.SS (Anoto Group SEK0.16, +0.02) -- enters into convertible investment agreement raising $1.5M
+6.2% KWS.LN (Keywords Studios £23.12, +1.36) -- receives updated possible cash by EQT Group of 2,450p/sh; board would be minded to recommend to shareholders should a firm intention to make an offer is announced
+5.2% OHLA.SM (Obrascon Huarte Lain €0.35, +0.02) -- Obrascon Huarte Lain considering non-binding offers from two parties that together would cover previously disclosed share capital increase
+4.2% ALPHA.GA (Alpha Services & Holdings €1.52, +0.06) -- long-term senior unsecured debt rating upgraded to Baa3 from Ba2 at Moody's
+3.9% DEZ.GR (Deutz AG €6.04, +0.23) -- acquires genset manufacturer Blue Star Power Systems
+3.3% TYMN.LN (Tyman £3.62, +0.12) -- company and Quanex agree on a revised proposal for the transaction to increase the cash value received by company Shareholders in the form of a special interim dividend of 15p per share
+3.0% ALFEN.NA (Alfen €17.29, +0.51) -- resumed neutral at Bryan Garnier
+2.2% VIRI.FP (Viridien €0.48, +0.01) -- announces the implementation of the 1 for 100 reverse share split
+1.9% KIT.NO (Kitron NOK31.62, +0.60) -- Norne Securities downgrade
+1.6% XLM.LN (XLMedia £0.10, -0.00) -- AGM trading statement
Trading Lower:
-88.6% GNRO.FP (GeNeuro €0.20, -1.56) --
results of GNC-501 study in Post-Covid-19 Syndrome; patients had no clinically meaningful improvement compared to placebo on the primary endpoint
company to further reduce its operating costs
-26.8% MIRI.LN (Mirriad Advertising £0.01, -0.00) -- AGM statement
-15.1% ATO.FP (ATOS SE €0.98, -0.17) -- resignation of David Layani and Helen Lee-Bouygues from the board with a view to Onepoint's intention to withdraw from the company's share capital
-14.8% GMS.LN (Gulf Marine Services £0.17, -0.03) -- sells 51.1M ordinary shares of GMS equating to c.$11M
-10.8% ALDNE.FP (Don't Nod Entertainment €1.98, -0.24) -- decides to slightly postpone the release of Lost Records
-6.9% QTCOM.FH (Qt Group €77.45, -5.75) -- Inderes downgrade
-6.1% DBAN.GR (Deutsche Beteiligungs €25.30, -1.65) -- plans to issue €100M convertible bonds due 2030
-5.1% FORTUM.FH (Fortum €13.59, -0.73) -- Goldman Sachs downgrade
-5.0% JD.LN (JD Sports Fashion £1.20, -0.06) -- Nike (NKE) Q4 earnings sympathy
-2.6% PUM.GR (Puma €42.92, -1.14)
-4.3% RENX.LN (Renalytix £0.11, -0.01) -- submits hearing request to Nasdaq hearings panel in regard to staff delisting determination
-3.6% AF.FP (Air France-KLM €8.25, -0.31) -- Barclays downgrade
-3.6% VTU.LN (Vertu Motors £0.72, -0.03) -- Helen Forrester, the wife of Robert Forrester, CEO of the Company, had sold 2 million ordinary shares of 10p each in the Company
-3.2% OR.FP (L'Oreal €409.30, -13.45) -- L'Oreal expects slower growth for overall beauty market this year amid China weakness - Bloomberg
-2.2% DHER.GR (Delivery Hero €22.27, -0.49) -- appoints interim CFO
-2.1% BRNK.GR (Branicks Group €1.97, -0.04) -- announces further reduction of its loan liabilities by repaying partial amount of VIB bridge financing of €40M
-1.9% SAFE.LN (Safestore Holdings £7.65, -0.15) -- Morgan Stanley downgrade
EU companies reporting monday:
Earnings: Porvair (PRV.LN)
Data:
Economics:
Denmark
Q1 GDP (1.4%) q/q vs preliminary (1.8%)
May Unemployment Rate 2.5% vs consensus 2.5% and prior 2.5%
Norway May Retail Sales +3.2% m/m vs consensus +0.4% and prior (0.3%)
Sweden
May Trade Balance SEK11.9B vs consensus SEK7.1B and prior revised SEK7.2B from SEK7.9B
May Retail Sales +0.8% y/y vs consensus (0.3%) and prior revised +0.7% from +0.5%
UK Q1 GDP +0.3% y/y vs preliminary +0.2%
Ireland May Retail Sales (1.0%) y/y vs consensus (0.5%) and prior revised (0.2%) from (0.9%)
France
Jun Preliminary CPI +2.1% y/y vs consensus +2.5% and prior +2.3%
May Consumer Spending +1.5% m/m vs consensus +0.1% and prior revised (0.9%) from (0.8%)
May PPI (6.7%) y/y vs consensus (6.1%) and prior revised (6.7%) from (6.8%)
Greece
Apr Retail Sales (6.3%) y/y vs consensus +2.9% and prior revised +5.3% from +5.2%
May PPI (1.4%) y/y vs consensus (1.2%) and prior (1.0%)
Jun Preliminary CPI
Portugal +2.8% y/y vs prior +3.1%
Italy +0.8% y/y vs consensus +1.0% and prior +0.8%
Spain +3.4% y/y vs consensus +3.3% and prior +3.6%; +0.3% m/m vs consensus +0.2% and prior +0.3%
Switzerland Jun KOF Leading Indicators 102.7 vs consensus 101.0 and prior revised 102.2 from 100.3
Markets:
WTI Crude (Aug 24): ($0.48) or (0.59%) to $81.26
€-$ +0.0013 or +0.12% to 1.0717
£-$ +0.0004 or +0.03% to 1.2644
€-£ +0.0008 to 0.8478
S&P 500 +0.33%
Performance year-to-date
FTSE 100: +5.57%
DAX: +8.86%
CAC: (0.85%)
MIB: +9.10%
Stoxx 600: +6.77%
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