Jul 17 ,2024
Synopsis:
European equity markets ended mixed. Switzerland +0.6% and Norway +0.5% led the outperformers. Denmark (4.1%) was the outlier to the downside and along with Netherlands (1.8%) and Sweden (0.3%) led the underperformers.
Today, the EU Council's reached an agreement on its position on the 2025 EU draft budget (release). In total, the Council's position for next year's budget amounts to €191.53B in commitments and €146.21B in payments. Also, EU nations signal support for provisional tariffs on China EVs in secret non-binding ballot, though several countries abstained, including Germany. UK government considering whether to follow move after talks with EU.
In political developments, official opening of UK parliament today, setting out legislative agenda for new government, including planning reforms, creation of a wealth fund and new powers for fiscal watchdog OBR. As expected, French PM and his government resigned on Tuesday but will stay on in a caretaker capacity until a new cabinet is appointed. Meanwhile, Reuters sources said the German cabinet passed its 2025 budget after months of wrangling. Details include a record €78B of investment, net borrowing of €43.8B and total budget size of €481B, within the constitutionally enshrined debt-brake.
From a macroeconomic calendar perspective, focus on UK inflation data which saw unchanged headline readings for core and services prices. UK CPI held at 2.0% y/y consensus 1.9% and prior 2.0%, while core at 3.5% versus 3.4% forecast and prior 3.5% and services prices at 5.7% versus 5.6% consensus and prior 5.7%. Largest upward contribution came from restaurants and hotels, while there was downward pressure from clothing and footwear. Eurozone final CPI confirmed at 2.5% y/y in June, while core at 2.9% and services prices at 4.1%. Breakdown showed biggest contribution to Eurozone inflation came from services.
In corporate news, Daimler Truck (DTG.GR), Telekom Austria (TKA.AV), Hypoport SE (HYQ.GR) and Adidas (ADS.GR) issued Q2 updates, with the latter raising FY operating income guidance. In France, Michelin (ML.FP) released global tyre market data for June, and VINCI (DG.FP) reported June traffic figures. Also in France, Fnac Darty (FNAC.FP), Virbac (VIRP.FP) and Ramsay Générale de Santé (GDS.FP) reported earnings.
In the Netherlands, ASML Holding (ASML.NA) reported Q2 earnings beating expectations, indicating that FY24/25 guidance is achievable despite an expected soft Q3. Out of the Nodics, Svenska Handelsbanken (SHB.A.SS), Demant (DEMANT.DC), Tele2 (TEL2.B.SS), Scandic Hotels Group (SHOT.SS), Kemira (KEMIRA.FH), Investor (INVE.B.SS), Assa Abloy (ASSA.B.SS), Demant (DEMANT.DC) issued Q2/H1 earnings.
In the UK, Babcock International Group (BAB.LN), Antofagasta (ANTO.LN) and BHP Group (BHP.LN) updated the market with their their latest numbers.
On M&A front, Radiocor 24 reported that Eni (ENI.IM) is in discussions with KKR, Blackstone, regarding a stake in biorefining unit Enilive, valued at €10B. In France, Fnac Darty (FNAC.FP) and Ruby Equity Investment announced the intention to acquire Unieuro (UNIR.IM) for €12/share in cash and shares.
Digest:
Sectors - STOXX Europe 600:
Outperformers
Construct & Mtls +1.00%, Banks +0.55%, Telecom +0.44%, Travel & Leisure +0.33%, Chemicals +0.17%, Financial Svcs (0.08%), Media (0.33%), Food & Beverage (0.16%), Retail (0.16%), Ind Goods & Svcs (0.31%)
Underperformers
Technology (4.67%), Basic Resources (2.84%), Utilities (1.89%), Real Estate(1.44%), Insurance (1.04%), Autos & Parts (0.94%), Persnl & HHold Goods (0.88%), Oil & Gas (0.74%), Health Care (0.61%)
Macro/Peripheral markets:
EU
EU may cut China EV import tariffs for Volkswagen and BMW - Reuters
Meloni's fury threatens 2nd term for von der Leyen - Politico
Strict EU sustainable finance rules deter emerging market investment, banks say - FT
EU-UK ties and Russian sanction circumvention likely to dominate big summit of European leaders - Euronews
ECB
ECB's inflation target hinges on uncertain productivity boost - Bloomberg
UK
Key points in King's Speech at a glance - BBC
UK inflation holds at BOE's 2% target - Bloomberg
Chancellor Reeves could boost fiscal headroom by excluding impact of Asset Purchase Facility on Treasury debt target - FT
Five big problems the Starmer government has to fix - BBC
Starmer pledges to 'take the brakes off' planning rules to build 1.5m homes - The Telegraph
France
French PM Attal resigns, caretaker government to manage affairs amid political uncertainty - Reuters
Spain
Spain absent full governor at ECB meeting amid political deadlock - FT
Germany
German cabinet passes 2025 budget, mid-term financial plan - Reuters citing sources
Company news:
Notable Gainers
+40.3% UNIR.IM (UniEuro €11.56, +3.32) -- Fnac Darty and Ruby Equity Investment announce intention to acquire Unieuro for €12/share in cash and shares
+35.7% EGTX.SS (Egetis Therapeutics SEK6.96, +1.83) -- drug approval
+26.9% VITR.SS (Vitrolife SEK229.20, +48.60) -- Q2 earnings
+22.4% MTRS.SS (Munters Group SEK244.00, +44.60) -- Q2 earnings; acquisition
+17.0% LXS.GR (Lanxess €26.14, +3.79) -- prelim Q2 earnings
+9.8% BAR.BB (Barco €11.89, +1.06) -- H1 earnings
+9.2% ACLN.SW (Accelleron Industries CHF42.58, +3.60) -- prelim H1 earnings; raises FY guidance
+7.7% DORO.SS (Doro SEK23.70, +1.70) -- Q2 earnings
+7.0% SHB.A.SS (Svenska Handelsbanken SEK109.20, +7.15) -- Q2 earnings
+6.1% PIHLIS.FH (Pihlajalinna €9.40, +0.54) -- prelim Q2 earnings
+5.8% ROG.SW (Roche Holding CHF274.00, +15.10) -- positive Phase I results for CT-996 for people with obesity, without type 2 diabetes; Relay Therapeutics discloses Genentech/Roche's termination of RLY-1971 collaboration agreement - 8-K
+5.6% OKEA.NO (Okea NOK23.76, +1.26) -- Q2 earnings
+4.5% HVO.LN (hVIVO plc £0.29, +0.01) -- trading update
+4.2% SCR.FP (SCOR SE €20.48, +0.82) -- Mediobanca upgrade
+4.1% TGS.NO (TGS-NOPEC Geophysical Co. NOK131.00, +5.20) -- global four-year agreement to license the TGS Imaging AnyWare software suite; Ocean Bottom Node six-month-plus data acquisition contract in North America
+3.8% THULE.SS (Thule Group SEK308.00, +11.40) -- Q2 earnings
+3.4% 247.SS (24SevenOffice Group SEK21.50, +0.70) -- strategic partnership with Lyvia Group AB
+3.3% KENDR.NA (Kendrion €13.00, +0.42) -- initiated outperform at Oddo
+2.4% WAGA.FP (Waga Energy €15.52, +0.36) -- commission a renewable natural gas production unit in Cowansville, Quebec
+2.1% HEN.GR (Henkel €74.05, +1.55) -- H1 earnings; raises FY24 outlook
+2.0% ADS.GR (Adidas €233.30, +4.60) -- prelim Q2 earnings; Bryan Garnier and Telsey Advisory Group upgrades
+2.0% ARISE.SS (Arise SEK52.10, +1.00) -- Q2 earnings
+1.9% CHRT.LN (Cohort £8.42, +0.16) -- FY earnings
+1.8% B3.SS (B3 Consulting Group SEK85.00, +1.50) -- Q2 earnings
+1.3% ALO.FP (Alstom €17.65, +0.22) -- CIC Market Solutions upgrade
Notable Decliners
-15.7% ORX.SS (Orexo SEK17.54, -3.26) -- Q2 earnings; complete response letter (CRL) from the FDA regarding the New Drug Application (NDA) for OX124 submitted to the FDA on 18-Sep-23
-14.8% DEMANT.DC (Demant DKK254.40, -44.20) -- prelim H1 earnings; Oddo and Nordea downgrades
-12.0% KTA.GR (Knaus Tabbert €32.90, -4.50) -- lowers FY guidance; temporarily reduces production output
-11.9% KEMIRA.FH (Kemira €20.62, -2.78) -- Q2 earnings
-11.0% ASML.NA (ASML Holding €869.80, -108.00) -- Q2 earnings
-10.7% GNS.LN (Genus £17.00, -2.04) -- trading update; warns on FY25
-9.7% ALLIGO.B.SS (Alligo SEK140.00, -15.00) -- Q2 earnings
-7.7% FTON.SW (Feintool International Holding CHF17.35, -1.45) -- significant y/y declines in H1 earnings, sales
-7.7% TEP.FP (Teleperformance €103.65, -8.70) -- Teleperformance shares trading lower: move attributed to Salesforce (CRM) announcing new AI chatbot
-7.0% NEL.NO (NEL ASA NOK6.31, -0.48) -- Q2 earnings
-5.8% ANTO.LN (Antofagasta £20.05, -1.23) -- Q2 production; total FY production expected towards lower end of guidance
-5.7% SHOT.SS (Scandic Hotels Group SEK63.00, -3.80) -- Q2 earnings
-4.6% CRTA.LN (Cirata £0.54, -0.03) -- places 10.1M new shares at 55p/each to raise $7.2M (£5.6M)
-4.6% BOAT.SS (Nimbus Group SEK22.90, -1.10) -- Q2 earnings
-4.6% NKT.DC (NKT A/S DKK584.50, -28.50) -- Goldman Sachs downgrade
-4.5% EL.FP (EssilorLuxottica €189.80, -8.90) -- to acquire the Supreme brand from VF Corporation for $1.5B in cash; to acquire an 80% stake in Heidelberg Engineering
-4.1% 0TX.GR (VEF AB €0.18, -0.01) -- Q2 earnings
-4.0% EGL.PL (Mota-Engil SGPS €3.55, -0.15) -- contract
-4.0% TM17.LN (Team17 Group £2.98, -0.13) -- trading update
-4.0% SCST.SS (Scandi Standard SEK73.60, -3.10) -- Q2 earnings
-3.2% MRX.GR (Mister Spex €2.76, -0.09) -- CEO to step down
-3.0% PRFO.SS (Profoto Holding SEK58.00, -1.80) -- Q2 earnings
-2.2% SOBI.SS (Swedish Orphan Biovitrum SEK271.80, -6.20) -- Deutsche Bank downgrade
-2.0% DTG.GR (Daimler Truck Holding $37.08, -0.74) -- prelim Q2 earnings
-2.0% KCR.FH (Konecranes €54.60, -1.10) -- Kepler Cheuvreux downgrade
-1.5% LGEN.LN (Legal & General Group £2.27, -0.03) -- RBC Capital Markets downgrade
-1.0% MMGR.B.SS (Momentum Group SEK182.00, -1.80) -- Q2 earnings
EU companies reporting tomorrow:
Earnings:
Benelux: Sligro Food Group (SLIGR.NA), Nedap (NEDAP.NA)
DACHs: Novartis (NOVN.SW), ABB Ltd. (ABBN.SW), VAT Group (VACN.SW), Georg Fischer (GF.SW), SFS Group (SFSN.SW), Bossard (BOSN.SW), medmix (MEDX.SW), Rieter Holding (RIEN.SW), CPH Chemie + Papier (CPHN.SW), Mensch und Maschine Software (MUM.GR), BAWAG Group (BG.AV)
Finland: Nokia (NOKIA.FH), Fiskars (FSKRS.FH), Alma Media (ALMA.FH), F-Secure (FESECURE.FH), Atria (ATRAV.FH), Oriola Corp. (OKDBV.FH), Verkkokauppa.com (VERK.FH)
France: Publicis Groupe (PUB.FP)
Norway: Telenor (TEL.NO), Schibsted (SCHB.NO), TGS (TGS.NO), PGS (PGS.NO), Hexagon Purus (HPUR.NO), Komplett (KOMP.NO)
Sweden: Atlas Copco (ATCO.A.SS), Volvo (VOLV.B.SS), EQT (EQT.SS), Essity (ESSITY.B.SS), Telia Co. (TELIA.SS), Indutrade (INDT.SS), SKF (SKF.B.SS), Volvo Car (VOLCAR.B.SS), Trelleborg (TREL.B.SS), AAK (AAK.SS), Getinge (GETI.B.SS), Husqvarna (HUSQ.B.SS), Lagercrantz (LAGR.B.SS), Hemnet (HEM.SS), Dometic (DOM.SS), Nolato (NOLA.B.SS), Bilia (BILI.A.SS), Ratos (RATO.B.SS), Alimak (ALIG.SS), Modern Times Group MTG (MTG.B.SS), Mips (MIPS.SS), Resurs (RESURS.SS), Viaplay Group (VPLAY.B.SS), Intrum (INTRUM.SS), VNV Global (VNV.SS), Hansa Biopharma (HNSA.SS), BHG Group (BHG.SS), Net Insight (NETI.B.SS), Pricer (PRIC.B.SS), Enea (ENEA.SS), Solid Försäkring (SFAB.SS), PowerCell Sweden (PCELL.SS), Midsona (MSON.B.SS), C-RAD (CRAD.B.SS)
Southern Europe: Bankinter (BKT.SM), NOS (NOS.PL)
Data:
Economics:
UK Jun
CPI +2.0% y/y vs consensus +1.9% and prior +2.0%; +0.1% m/m vs consensus +0.1% and prior +0.3%
Output PPI +1.4% y/y vs consensus +1.8% and prior +1.7%; (0.3%) m/m vs consensus +0.1% and prior (0.1%)
Eurozone Jun Final CPI +2.5% y/y vs preliminary +2.5%; +0.2% m/m vs preliminary +0.2%
Markets:
WTI Crude (Aug 24): ($0.20) or (0.24%) to $82.42
€-$ +0.0033 or +0.30% to 1.0931
£-$ +0.0027 or +0.21% to 1.3002
€-£ +0.0005 to 0.8406
S&P 500 +0.31%
Performance year-to-date
FTSE 100: +5.92%
DAX: +10.06%
CAC: +0.43%
MIB: +13.32%
Stoxx 600: +7.49%
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