Jul 15 ,2024
Synopsis:
European indices closed in negative territory, near the session's lows. France underperformed the region. The latest ECB survey on access to finance of enterprises in the Eurozone revealed cautiously optimistic outlook, with improved access to bank loans and fewer financing obstacles. While firms' need for bank loans stabilized due to high internal funds, there was a notable pickup in investment and moderation of profitability pressures. Salaries expected to rise 3.3% versus 3.8% three months ago. Yet, services sector anticipated larger increases in costs and prices compared to other sectors. Still, inflation expectations declined, with median expectations at 3% across various time horizons. Furthermore, Bloomberg sources said that the ECB is set to delay the outcome of a large investigation into leveraged loans until at least September after complaints from several banks. Article highlighted decision to delay findings is in response to an unusually high level of criticism into the way the investigation was carried out. Note that reports said last month that some banks perceived it as overly bureaucratic and not pragmatic enough when compared with US authorities.
Quiet macro calendar: ECB President Lagarde will be attending Eurogroup meeting today, though remarks likely to be limited ahead of Thursday's policy meeting. No change in policy seen and expected to maintain data-dependent approach. Meanwhile, UK economy has seen raft of upgrades after last week's GDP data beat expectations. This week's incoming inflation data and labor market update to influence August rate decision. Markets seen ~50% for a rate cut.
In corporate news, luxury names under the spotlight this morning, with shares in Swatch (UHR.SW) and Burberry Group (BRBY.LN) both trading sharply lower following their Q2/H1 updates, with the latter also suspending the divi and its CEO Jonathan Akeroyd stepping down. In France, ATOS SE (ATO.FP) announced the successful funding of its financial restructuring plan, with shares ending ~+24% higher; also, local press reported Airbus (AIR.FP) and Thales (HO.FP) are considering a merger of their space activities and GeNeuro (GNRO.FP) announced that it submitted a request for a debt moratorium to the Geneva court.
In the Nordics, Nordea Bank (NDA.SE.SS), Gjensidige Forsikring (GJF.NO), Mowi (MOWI.NO) and Orkla (ORK.NO) issued their latest earning numbers, whilst Ericsson (ERIC.B.SS) and OPPO signed a global patent cross license agreement.
Elsewhere, TomTom (TOM2.NA) posted its Q2 report and Nordex (NDX1.GR) published its H1 order intake; still in Germany, Evonik Industries (EVK.GR ) reported preliminary Q2 numbers and raised FY adj EBITDA guidance; BayWa (BYW6.GR) shares ended sharply lower after - on Friday after the close - the company announced restructuring opinion as its financial situation remains "strained"; also, Politico reported that the US's FTC is in early stages of an antitrust probe into DaVita and Fresenius Medical Care (FME.GR)
Looking ahead to tomorrow's calendars, Richemont (CFR.SW), Telekom Austria (TKA.AV), DKSH Holding (DKSH.SW), Elisa (ELISA.FH), Solstad Offshore (SOFF.NO), Aker Horizons (AKH.NO, Skandinaviska Enskilda Banken (SEB.A.SS), Swedbank (SWED.A.SS), Swedish Orphan Biovitrum (SOBI.SS), NCC (NCC.B.SS), Ocado Group (OCDO.LN), VINCI (DG.FP), Virbac (VIRP.FP), Intermediate Capital Group (ICG.LN), X5 Retail Group (FIVE.LN), B&M European Value Retail (BME.LN) and Aeroports de Paris ADP (ADP.FP) will be among few other names to update investors. Germany Jul ZEW survey, Italy Jun final CPI & May trade balance and Eurozone May trade balance are the main macro releases
Digest:
Sectors - STOXX Europe 600:
Outperformers: Travel & Leisure (0.20%), Media (0.35%), Insurance (0.41%), Financial Svcs (0.48%), Banks (0.53%), Autos & Parts (0.62%), Telecom (0.68%), Construct & Mtls (0.70%), Real Estate (0.77%), Oil & Gas (0.85%), Technology (0.87%), Ind Goods & Svcs (0.92%), Health Care (0.98%)
Underperformers: Persnl & HHold Goods (2.10%), Utilities (1.92%), Chemicals (1.72%), Basic Resources (1.55%), Food & Beverage (1.54%), Retail (1.30%)
Macro:
France's left-wing parties struggling to form govt, says leader of Socialists (F24)
French fiscal doubts strengthen ECB reluctance to repeat rate cut signal (FT)
Euro-Zone Firms See Wage Growth Easing in Latest ECB Survey (BBG)
EU to boycott Hungary's foreign affairs summit (Politico)
Ukraine's Zelenskiy eyes second summit in November, says Russia should attend (Reuters)
BoE should 'stop squeezing living standards' and cut rates, says policymaker (Guardian)
Pomp, plans and power - what to expect in Labour's King's Speech (BBC)
PM Meloni seeks to bring nuclear power back to Italy (FT)
Company news:
Notable Gainers
+23.6% ATO.FP (ATOS SE €1.32, +0.25) -- agrees €800M interim financing and Lock-Up clause with creditors
+17.7% SOLG.LN (SolGold £0.10, +0.02) -- agrees $750M financing package for the Cascabel Project
+5.7% VOLO.SS (Volati SEK114.20, +6.20) -- Q2 earnings
+5.3% ORK.NO (Orkla NOK89.85, +4.55) -- Q2 earnings; Jotun Q2 update
+5.2% POXEL.FP (Poxel €0.50, +0.03) -- financial position update
+4.7% ADXN.SW (Addex Therapeutics CHF0.06, -0.00) -- present positive results from GABAB PAM Cough Program at the thirteenth London International Cough Symposium
+3.9% ALIF.B.SS (AddLife SEK149.50, +5.60) -- Q2 earnings
+2.1% LEI.GR (Leifheit €16.95, +0.35) -- prelim H1
+2.0% SPM.IM (Saipem €2.40, +0.05) -- awarded two offshore projects worth ~$500M in saudi Arabia
+1.6% APTD.LN (Aptitude Software Group £3.79, +0.06) -- H1 trading update
+0.1% AIR.FP (Airbus SE €133.44, +0.08) -- considering a merger of their space activities with Thales
Notable Decliners
-31.4% BYW6.GR (BayWa €15.58, -7.12) -- restructuring
-28.9% GNRO.FP (GeNeuro €0.09, -0.03) -- debt moratorium
-15.9% BRBY.LN (Burberry £7.45, -1.41) -- profit warning, divi suspension; CEO steps down
-9.8% UHR.SW (Swatch Group CHF170.70, -18.50) -- H1 earnings
-8.4% TOM2.NA (TomTom €5.09, -0.47) -- Q2 earnings
-7.9% NOTE.SS (NOTE SEK145.90, -12.60) -- Q2 earnings
-7.8% SMCP.FP (SMCP €2.18, -0.19) -- English High Court has ruled in favour of GLAS
-7.4% GJF.NO (Gjensidige Forsikring NOK183.90, -14.60) -- Q2 earnings
-7.1% ATYM.LN (Atalaya Mining £4.02, -0.31) -- Q2 production update, lowers FY production guidance
-6.1% GRF.SM (Grifols €9.24, -0.60) -- Moodys withdraws rating
-4.7% SAGA.B.SS (Sagax SEK286.40, -14.20) -- earnings
-4.6% NDX1.GR (Nordex €12.92, -0.63) -- H1 order intake
-3.8% NDA.FI.FH (Nordea Bank €10.57, -0.42) -- Q2 earnings
-3.5% CFR.SW (Richemont CHF138.05, -4.95) -- sympathy to Swatch, Burberry earnings
-2.9% FME.GR (Fresenius Medical Care €35.75, -1.07) -- FTC is in early stages of an antitrust probe into DaVita and Fresenius Medical Care -- Politico
-2.0% BGO.LN (Bango £1.45, -0.03) -- H1 trading update
-1.8% RWA.LN (Robert Walters £3.75, -0.07) -- Q2 trading update
-1.4% BCG.LN (Baltic Classifieds Group £2.73, -0.04) -- holder Antler divests entire ~ 13% stake in the company
-1.4% EVK.GR (Evonik Industries €18.64, -0.27) -- prelim Q2 and raises FY adj EBITDA guidance
-1.1% MOWI.NO (Mowi NOK172.75, -1.85) -- Q2 earnings
-0.6% HO.FP (Thales €153.20, -0.95) -- considering a merger of their space activities with Airbus
EU companies reporting tomorrow:
DACHs: Telekom Austria (TKA.AV), DKSH Holding (DKSH.SW), Bastei Lubbe (BST.GR)
Finland: Elisa (ELISA.FH), Enento (ENENTO.FH), WithSecure Corp. (WITH.FH)
Norway: Solstad Offshore (SOFF.NO), Aker Horizons (AKH.NO)
Sweden: Skandinaviska Enskilda Banken (SEB.A.SS), Swedbank (SWED.A.SS), Fastighets AB Balder (BALD.B.SS), Swedish Orphan Biovitrum (SOBI.SS), Castellum (CAST.SS), Sweco (SWEC.B.SS), Camurus (CAMX.SS), AFRY (AFRY.SS), Peab (PEAB.B.SS), NCC (NCC.B.SS), Biotage (BIOT.SS), Hexatronic (HTRO.SS), Bergman & Beving (BERG.B.SS), Probi (PROB.SS), KlaraBo Sverige (KLARA.B.SS), Bactiguard (BACTI.B.SS), Nilarngruppen (NIL.B.SS)
UK: Ocado Group (OCDO.LN), Gateley (Holdings) (GTLY.LN), RM (RM.LN)
Trading Update:
France: VINCI (DG.FP), Virbac (VIRP.FP), Esker (ALESK.FP), Sidetrade (ALBFR.FP)
Switzerland: Richemont (CFR.SW)
UK: Intermediate Capital Group (ICG.LN), X5 Retail Group (FIVE.LN), B&M European Value Retail (BME.LN), Integrafin Holdings (IHP.LN), Petra Diamonds Ltd. (PDL.LN)
Traffic: Aeroports de Paris ADP (ADP.FP)
Data:
Economics:
Eurozone May Industrial Production (2.9%) y/y vs consensus (2.0%), prior revised (3.1%) from (3.0%)
Finland Jun CPI +1.3% y/y vs consensus +1.3%, prior +1.5%; 0.0% m/m vs consensus +0.2%, prior (0.1%)
Switzerland Jun PPI (1.9%) y/y vs consensus (1.7%), prior (1.8%); 0.0% m/m vs consensus +0.1%, prior (0.3%)
Markets:
WTI Crude (Aug 24): ($0.20) or (0.24%) to $82.01
€-$ +0.0019 or +0.17% to 1.0913
£-$ +0.0009 or +0.07% to 1.2982
€-£ +0.0010 to 0.8406
S&P 500 +0.70%
Performance year-to-date
FTSE 100: +5.80%
DAX: +11.03%
CAC: +1.14%
MIB: +13.31%
Stoxx 600: +8.31%
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