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StreetAccount Summary - EU Market Recap: FTSE 100 +0.21% to 8204.89, DAX (0.45%) to 18354.76, CAC40 +0.21% to 7586.55, STOXX 600 (0.16%) to 514.01

Jul 18 ,2024

  • Synopsis:

    • European equity markets ended mixed Thursday in a session that was dominated by earnings newsflow (including NOVN.SW, NOKIA.FH, ABBN.SW, VOLV.B.SS), ECB decision, and UK jobs data. In the US, lots of moving pieces. TSM results/guidance seemingly unable to foster a tech bounce. Softer data not providing a tailwind for rates. Renewed pickup in speculation Biden will soon exit race, though also doubts whether that has much impact on the election calculus. Much of the focus remains on the massive rotational moves seen over last week or so on the back of disinflation/soft-landing/Trump traction. Big debate about the sustainability of this trend.

    • Back in Europe, there was an uneventful ECB policy update. Left three key rates unchanged, including its deposit rate at 3.75%, after cutting rates by 25 bps in June. Reiterated it will continue to follow a data-dependent, meeting-by-meeting approach and was not pre-committing to a particular rate path. Highlighted that while some measures of underlying inflation picked up in in May owing to one-off factors, most measures were either stable or edged lower in June. Added that in line with expectations, inflationary impact of high wage growth has been buffered by profits. Noted domestic price pressures still high, services inflation elevated and headline inflation to remain above target well into next year. However, majority of economists anticipate another rate cut in September. President Lagarde has said it needed to be more certain before it can ease policy again with the labor market more resilient than it expected. Lagarde may be reluctant to provide any pre-emptive signal for September amid reports that hawkish officials were critical after the president signaled a June cut in April.

    • Official UK data showed an easing in the labor market. June claimant count at +32.3K versus consensus +23.4K and prior +51.9K revised from +50.4%. ILO unemployment rate unchanged at 4.4% at the highest level since 2021, as expected. Number of vacancies continued to drop with fall of 30K on the quarter to 889K. Now down for 24th consecutive period, yet still above pre-Covid levels. On pay growth, average weekly earnings at 5.7% versus consensus 5.7% and prior 5.9%, while excluding bonus at 5.7% versus 5.7% forecast and prior 6.0%. A cooling labor market when taken together with yesterday's faster-than-expected inflation reading complicates the BoE's August policy decision. Policymakers may judge the stickiness in services prices due to temporary factors if other forward-looking metrics and updated forecasts point to further disinflation (London Times). Some sell-side economists pushed back their calls for the first BoE cut until at least September and financial markets see less than 50% chance for an August cut (Guardian). Was the catalyst for sterling hitting a 12-month high versus the dollar above 1.3000.

    • Among stocks on the move today, Nokia (NOKIA.FH) underlying results underwhelmed sending its shares down (5%). ABB (ABBN.SW) results with some negative takeaways including misses for orders and sales. Shares fell (5.6%). Novartis (NOVN.SW) shares also lower today despite Q2 earnings beat and raised guidance. Among names that moved higher on back of earnings/updates were Volvo Car (VOLCAR.B.SS) (sharp improvement in BEV gross margin to 20%), Volvo (VOLV.B.SS), Telia (TELIA.SS), Getinge (GETI.B.SS), Frasers Group (FRAS.LN), Rockwool (ROCK.B.DC), and Essity (ESSITY.B.SS)

  • Digest:

    • Sectors - STOXX Europe 600:

      • Outperformers:

        • Personal Care Drug and Grocery Stores +1.37%, Autos & Parts +1.23%, Energy+1.07%, Food, Beverage and Tobacco +0.85%, Construct & Mtls +0.75%, Utilities +0.74%, Media +0.70%, Banks +0.49%, Chemicals +0.47%, Insurance +0.26%, Retail +0.19%, Consumer Products and Services +0.14%, Real Estate +0.08%

      • Underperformers:

        • Technology (1.80%), Travel & Leisure (1.60%), Basic Resources (1.06%), Ind Goods & Svcs (0.93%), Health Care (0.93%), Financial Svcs (0.30%)

    • Macro:

      • Central Banks

        • ECB won't debate inflation target, dot plot in upcoming review - Reuters

        • ECB Governing Council keeps the three key ECB interest rates unchanged - link

      • EU

        • Parliament re-elects Ursula von der Leyen as Commission President - link

      • France

        • Hung parliament votes on new National Assembly president - France24

      • UK

        • UK says budget scrutiny rule will only apply to measures worth at least 1% of GDP - Reuters

        • Starmer promises to repair ties with European countries - Guardian

        • Profit warnings falling amid improving economy but scars remain - CITY AM

    • Company news:

      • Notable Gainers

        • +26.2% MIPS.SS (MIPS SEK520.00, +107.80) -- Q2 earnings

        • +18.6% VVY.NA (Vivoryon Therapeutics €2.46, +0.39) -- new data showing unique treatment effects of Varoglutamstat on kidney function in patients with diabetes

        • +16.8% ALU.LN (Alumasc Group £2.26, +0.33) -- trading update

        • +13.5% HEM.SS (Hemnet Group SEK397.80, +47.40) -- Q2 earnings

        • +13.1% AVCT.LN (Avacta Group £0.74, +0.09) -- trading update

        • +11.5% SIVE.SS (Sivers Semiconductors SEK4.68, +0.48) -- Q2 earnings

        • +11.0% VOLCAR.B.SS (Volvo Car SEK35.66, +3.53) -- Q2 earnings

        • +10.7% GETI.B.SS (Getinge SEK207.30, +20.00) -- Q2 earnings

        • +10.6% DMYD.B.SS (Diamyd Medical SEK13.60, +1.30) -- receives second US FDA Fast Track designation for Diamyd for the prevention of Type 1 Diabetes

        • +9.4% FRAS.LN (Frasers Group £8.99, +0.78) -- FY earnings

        • +8.6% CRAD.B.SS (C-RAD SEK48.85, +3.85) -- Q2 earnings

        • +7.3% DNLM.LN (Dunelm Group £11.87, +0.81) -- trading update

        • +7.0% TELIA.SS (Telia Co. SEK30.63, +2.00) -- Q2 earnings

        • +7.0% YOYO.DC (OrderYOYO DKK8.40, +0.55) -- H1 earnings

        • +6.8% ICP1V.FH (Incap Oyj €12.69, +0.81) -- Q2 earnings

        • +6.5% EMBELL.SS (Embellence Group SEK35.90, +2.20) -- Q2 earnings

        • +6.2% AJB.LN (AJ Bell £4.22, +0.25) -- trading update

        • +5.9% VOLV.B.SS (Volvo SEK287.20, +16.00) -- Q2 earnings

        • +5.6% DOM.SS (Dometic Group SEK74.30, +3.95) -- Q2 earnings

        • +5.5% IVA.FP (Inventiva €2.49, +0.13) -- €20.1M issuance of royalty certificates

        • +5.5% SRV1V.FH (SRV Group €5.20, +0.27) -- Q2 earnings

        • +5.3% CSH.GR (CENIT €11.90, +0.60) -- acquires 60% of Analysis Prime LLC

        • +4.7% ESSITY.B.SS (Essity SEK295.90, +13.30) -- Q2 earnings

        • +4.7% TGS.NO (TGS-NOPEC Geophysical Co. NOK137.10, +6.10) -- extension to its ocean bottom node acquisition campaign in West Africa

        • +4.7% SDR.LN (Schroders £3.94, +0.18) -- Morgan Stanley upgrade

        • +4.6% BKT.SM (Bankinter €8.18, +0.36) -- Q2 earnings

        • +4.2% ENEA.SS (Enea AB SEK86.50, +3.50) -- Q2 earnings

        • +3.8% MAU.FP (Maurel et Prom €6.38, +0.24) -- H1 production

        • +3.4% PUB.FP (Publicis Groupe €100.55, +3.35) -- H1 earnings

        • +3.2% TEP.FP (Teleperformance €107.20, +3.30) -- traded off highs; comments from The Bear Cave cited

        • +2.7% FSECURE.FH (F-Secure €1.97, +0.05) -- Q2 earnings

        • +2.4% TATE.LN (Tate & Lyle £6.49, +0.16) -- Rosebank Industries had Tate & Lyle on their acquisition targets list but not currently on agenda, according to Mark Kleinman blog

        • +2.3% EL.FP (EssilorLuxottica €194.25, +4.40) -- Meta explores acquiring a small stake in EssilorLuxottica -- FT

        • +2.1% ROCK.B.DC (Rockwool DKK2,976.00, +60.00) -- preliminary Q2 earnings; raises FY24 EBIT margin guidance

      • Notable Decliners

        • -20.1% BHG.SS (Lightshop SEK15.20, -3.83) -- Q2 earnings

        • -16.9% ENZY.SS (Enzymatica SEK2.06, -0.42) -- new rights issue of ~ SEK130M (gross); postpones EBIT target of ~SEK170M until 2027 from prior "at the end of 2026"

        • -16.7% HNSA.SS (Hansa Biopharma SEK38.80, -7.76) -- Q2 earnings

        • -13.2% HUSQ.B.SS (Husqvarna SEK79.88, -12.10) -- Q2 earnings

        • -13.1% EVOK.LN (Evoke Plc £0.75, -0.11) -- trading update

        • -9.7% RIEN.SW (Rieter Holding CHF107.80, -11.60) -- H1 earnings

        • -9.4% VACN.SW (VAT Group CHF452.90, -46.90) -- H1 earnings

        • -9.2% VNV.SS (VNV Global SEK24.02, -2.44) -- Q2 earnings

        • -7.2% RATO.B.SS (Ratos SEK35.90, -2.80) -- Q2 earnings

        • -6.4% MEDX.SW (medmix CHF13.50, -0.92) -- H1 earnings

        • -5.6% ABBN.SW (ABB Limited CHF48.30, -2.88) -- Q2 earnings

        • -5.3% CORE.A.SS (Corem Property Group SEK9.66, -0.54) -- to carry out a directed issue of ~100M ordinary shares

        • -5.2% EQT.SS (EQT AB SEK325.40, -17.70) -- H1 earnings

        • -5.2% PCELL.SS (PowerCell Sweden SEK28.98, -1.60) -- Q2 earnings; order

        • -5.1% MTG.B.SS (Modern Times Group MTG SEK82.40, -4.40) -- Q2 earnings

        • -5.0% NOKIA.FH (Nokia €3.40, -0.18) -- Q2 earnings

        • -4.7% SVED.B.SS (Svedbergs Group SEK46.30, -2.30) -- Q2 earnings

        • -4.6% BILI.A.SS (Bilia SEK143.20, -6.90) -- Q2 earnings

        • -4.3% DBAN.GR (Deutsche Beteiligungs €24.45, -1.10) -- guidance

        • -4.1% SKF.B.SS (SKF SEK206.30, -8.80) -- Q2 earnings

        • -3.4% ALIG.SS (Alimak Group SEK113.60, -4.00) -- Q2 earnings

        • -3.1% SLIGR.NA (Sligro Food Group €12.50, -0.40) -- H1 earnings

        • -2.8% AAK.SS (AarhusKarlshamn SEK296.00, -8.60) -- Q2 earnings

        • -2.2% EMBRAC.B.SS (Embracer Group SEK24.65, -0.55) -- short-term recommendation transferred hold at Handelsbanken

        • -2.2% BAB.LN (Babcock International Group £5.06, -0.12) -- Berenberg downgrade

        • -2.1% VERK.FH (Verkkokauppa.com €1.87, -0.04) -- Q2 earnings

        • -1.8% FSKRS.FH (Fiskars €16.70, -0.30) -- Q2 earnings

        • -1.5% BITTI.FH (Bittium €8.12, -0.12) -- Inderes downgrade

        • -1.0% DPLM.LN (Diploma £42.34, -0.42) -- trading update

    • EU companies reporting tomorrow:

      • Earnings:

        • Benelux: Orange Belgium (OBEL.BB)

        • DACHs: Schindler (SCHN.SW), Bystronic (BYS.SW), Mikron (MIKN.SW)

        • Denmark: Danske Bank (DANSKE.DC),

        • Finland: Kone (KNEBV.FH), Wartsila (WRT1V.FH), Finnair (FIA1S.FH), Nokian Renkaat (TYRES.FH), Lindex Group (LINDEX.FH), Talenom (TNOM.FH)

        • France: Sartorius Stedim Biotech (DIM.FP)

        • Norway: Yara International (YAR.NO), Tomra Systems (TOM.NO), Pareto Bank (PARB.NO)

        • Sweden: Sandvik (SAND.SS), Boliden (BOL.SS). Epiroc (EPI.A.SS), Evolution (EVO.SS), Saab (SAAB.B.SS), Beijer Ref (BEIJ.B.SS), Skanska (SKA.B.SS), Billerud (BILL.SS), Electrolux (ELUX.B.SS), Sinch (SINCH.SS), Electrolux Professional (EPRO.B.SS), Alleima (ALLEI.SS), Lindab International (LIAB.SS), Beijer Alma (BEIA.B.SS), Fagerhult (FAG.SS), Sdiptech (SDIP.B.SS), VBG Group (VBG.B.SS), Truecaller (TRUE.B.SS), INVISIO (IVSO.SS), Attendo (ATT.SS), CellaVision (CEVI.SS), Knowit (KNOW.SS), CTT Systems (CTT.SS), Nordic Paper Holding (NPAPER.SS), Bonava (BONAV.B.SS), Ework (EWRK.SS), Cint (CINT.SS), Prevas (PREV.B.SS), Humana (HUM.SS)

      • Trading Update: Hargreaves Lansdown (HL.LN), Burberry Group (BRBY.LN)

  • Data:

    • Economics:

      • Netherlands Jun Unemployment Rate 3.6% vs consensus 3.8% and prior 3.6%

      • UK Jun Claimant Count Change +32.3K vs consensus +23.4K and prior revised +51.9K from +50.4K

      • Switzerland Jun Trade Balance CHF6.18B vs consensus CHF5.0B and prior revised CHF5.79B from CHF5.81B

        • Jun Swiss Watch Exports (7.2%) to CHF 2.27B

    • Markets:

      • WTI Crude (Aug 24): ($0.03) or (0.04%) to $82.82

      • €-$ (0.0033) or (0.30%) to 1.0908

      • £-$ (0.0037) or (0.29%) to 1.2972

      • €-£ (0.0001) to 0.8409

      • S&P 500 (0.55%)

      • Performance year-to-date

        • FTSE 100: +6.10%

        • DAX: +9.57%

        • CAC: +0.57%

        • MIB: +13.76%

        • Stoxx 600: +7.31%

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