Jul 04 ,2024
Synopsis
European equity markets are set to open higher whilst Asian equities mixed Thursday. Japan TOPIX hit record high amid strength in autos. China markets erased gains with mainland indexes turning negative. Semis driving Taiwan's outperformance. Shares in Japan, Australia, and EM Asia also among gainers. S&P 500 futures flat (US markets closed Thursday for Independence Day). Dollar a touch lower against yen, Aussie and kiwi. Gold steady near one-month high. Crude pulling back from overnight highs. Bitcoin also swinging lower.
UK general election in focus today with recent polls setting Labour for victory (BBC poll tacker). New government faces economic challenges, balancing public investment against high debt and fiscal constraints. Labour expected to maintain fiscal caution but may face pressure to improve public services. Meanwhile in France, legislative election tv debate scheduled on France 2.
Further on today's agenda, EU's Borrell addresses the ECFR Annual Council Meeting whilst EU's Gentiloni speech at the global conf. on measuring new forms of employment and EU's Reynders participates in Jacques Delors Agora event.
In central banks, ECB MPC minutes and ECB's Lane lecture at 11:00CET at the Univ. of Naples Federico II and McCaul panellist at 11:35CET at Annual Economist Government Roundtable. ECB's Cipollone speech at 16:15CET the National Statistics Conf. International Conf. on Payments and Securities Settlement (through Fri), speakers include Bundesbank's Balz at 17:30CET.
Macroeconomic updates include: Switzerland Jun CPI, unemployment rate, Germany May factory orders, Jun construction PMI, UK Jun construction PMI. Also, Germany and UK Jun new car registrations are due to be released.
In corporate news, Telefonaktiebolaget LM Ericsson (ERIC.B.SS) announced yesterday after the close to record non-cash impairment charge of SEK11.4B in Q2 mainly related to Vonage. Still in the Nordics, Bang & Olufsen (BO.DC) posted Q4 earnings and sets medium-term financial ambitions; to launch capital increase of up 20%. From the DACH region, Continental (CON.GR) ADRs ended ~+4% higher overnight following after Conti's pre-close call after the close last night. Krones (KRN.GR) targets consolidated revenue to increase to €7B by 2028.
Companies expected to update the market with their respective earnings/trading updates include: FastPartner (FPAR.A.SS), Eastnine (EAST.SS) and Victrex (VCT.LN).
On M&A front, Adecco Group (ADEN.SW) is reportedly exploring sale of technology consulting unit Akkodis.
IGD SIIIQ (IGD.IM) and Expert.ai (EXAI.IM) CMD/events are due.
Macro/Politics
EU's high energy costs to persist in net zero plans, lobby says - Bloomberg
European central bankers warn of risks to region's economy - FT
Macron's gamble creates major fiscal headaches for the EU - Politico
Le Pen Rivals Land Blow in Bid to Keep Far Right From Power - Bloomberg
Labour will win biggest majority since 1832, final MRP poll predicts - The Times
I'm not leaving, Biden says, as pressure to drop out grows - BBC
Top company news
Earnings/updates
ERIC.B.SS (Telefonaktiebolaget LM Ericsson) -- to record non-cash impairment charge of SEK11.4B in Q2 mainly related to Vonage
RDC.GR (Redcare Pharmacy) -- reports prelimiary Q2 sales €560M vs FactSet €555.8M [1 est]
KRN.GR (Krones) -- targets consolidated revenue to increase to €7B by 2028
PLX.FP (Pluxee) -- reports Q3 revenue €297M vs year-ago €261M; FY24 organic revenue growth objective upgraded to ~+18% from prior 15%-17%
BCP.PL (Banco Comercial Portugues) -- informs about Bank Millennium's estimated level of provisions against legal risk related to FX mortgage loans portfolio in Q2 2024.
BO.DC (Bang & Olufsen) -- reports Q4 EPS (DKK0.30) vs FactSet (DKK0.19) [2 est, (DKK0.20)-(0.17)]
sets medium-term financial ambitions; to launch capital increase of up 20%
M&A
ADEN.SW (Adecco Group) -- exploring sale of technology consulting unit Akkodis - Bloomberg
ELLAKTOR.GA (Ellaktor) -- signs agreement for the sale of Helector to Motor Oil's Manetial (post EU close 3-Jul)
WG.LN (John Wood Group) -- announces extension to put up or shut up deadline in connection with Sidara's offer
NHOA.FP (NHOA SA) -- Italy looking at TCC Group's offer to buy remainder of NHOA - Reuters
Healthcare
ROG.SW (Roche Holding) -- SKYSCRAPER-06 study of Genentech's Tecentriq does not meet primary endpoints
OSE.FP (OSE Immunotherapeutics) -- OSE Immunotherapeutics and Boehringer Ingelheim advance clinical development of first-in-class SIRP cancer immunology treatment BI 770371
Other
TIGO.SS (Millicom International Cellular) -- SEC filing: SC 13D/A (Filed by Atlas Investissement)
IAG.LN (International Consolidated Airlines Group) -- IAG CEO says European airlines will be forced to raise prices to fund the switch to SAF and cutting carbon emissions, which will impact passenger demand - FT
COL.SM (Inmobiliaria Colonial SOCIMI) -- Criteria Caixa's previously subscribed for new shares of Inmobiliaria Colonial SOCIMI will be admitted to trading in the next few days (post EU close 3-Jul)
SBB.B.SS (Samhällsbyggnadsbolaget i Norden) -- SBB postpones interest payments on hybrid bonds
TPEIR.GA (Piraeus Financial Holdings) -- shareholders to vote at AGM on 24-Jul to increase the maximum number of shares that could be repurchased in any future buyback to up to 70M (post EU close 3-Jul)
Key rating changes
Upgrades
BNZL.LN (Bunzl) -- to buy from hold at HSBC
HM.B.SS (H&M Hennes & Mauritz) -- to buy from hold at HSBC
SFER.IM (Salvatore Ferragamo) -- to neutral from sell at Goldman Sachs
Downgrades
AKRBP.NO (Aker BP) -- to hold from buy at DnB Markets
TOP.DC (Topdanmark) -- to hold from buy at Danske Bank
GALP.PL (Galp Energia SGPS) -- to neutral from buy at JB Capital Markets
VWS.DC (Vestas Wind Systems) -- to neutral from outperform at Santander
Initiations
LSEG.LN (London Stock Exchange Group) -- neutral at Oddo
AAK.SS (AarhusKarlshamn) -- buy at Carnegie Securities
IBST.LN (Ibstock) -- outperform at RBC Capital Markets
CARD.LN (Card Factory) -- buy at Berenberg
Data
Nikkei +0.89% to 40940.46
Hang Seng +0.00% to 17978.43
Shanghai Composite (0.57%) to 2965.30
S&P futures (0.5) vs prior close of 5590.3
€-$ (0.0002) or (0.02%) to 1.0791
$-¥ (0.14) or (0.09%) to 161.47
€-¥ (0.19) or (0.11%) to 174.22
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