Jul 25 ,2024
Synopsis:
European indices ended lower, but off worst levels. UK notable exception to the softer trend. Follows weaker close on Wednesday. Media, tech, autos and industrials the biggest decliners. Telecom a notable outperformer. Utilities and Personal/Household Goods also held up.
Wednesday US tech selloff still the big story. Risk off chalked up to lackluster Mag 7 earnings takeaways vs elevated expectations, select AI scrutiny, incremental consumer concerns and stretched positioning/sentiment. Sell-off not just confined to tech as raft of PMIs appeared to heighten concerns about global economic growth. Some signs of stabilization today with several higher-profile tech names posting better Q2 results, but Europe's Tech sector hit by downbeat earnings from STMicroelectronics (STMPA.FP) and BE Semiconductor Industries (BESI.NA).
On macro front, German Ifo business climate survey missed, sharp drop in French business confidence and expansion in Eurozone M3 money supply growth. BoE announced details of a new facility designed to provide cash for non-bank financial institutions to avoid repeat of bond market volatility seen two years ago.
Heavy earnings calendar to digest again in Europe. Several big names reported downbeat updates. Bloomberg noted more than a quarter of European firms had reported results through Wednesday, and less than half had beaten analysts' estimates. Recent update from LSEG I/B/E/S showed Q2 earnings expected to decrease 0.8% from a year earlier. To date for Q2 2024, 52.3% reported results exceeding analyst estimates versus 54% beats in a typical quarter.
On the reporting front, from the DACH region, Roche (ROG.SW), Nestle (NESN.SW), Siltronic (WAF.GR) and Julius Baer Group (BAER.SW) reported Q2/H1, whilst - in Southern Europe - Stellantis (STLAM.IM) also updated investors. In the UK, Vodafone (VOD.LN), Lloyds Banking Group (LLOY.LN), AstraZeneca (AZN.LN), Unilever (ULVR.LN), RELX (REL.LN), British American Tobacco (BATS.LN), Anglo American (AAL.LN) and Rentokil Initial (RTO.LN) issued earnings/trading updates. Out of France, Renault (RNO.FP), KERING (KER.FP), Sanofi (SAN.FP), Carrefour (CA.FP), JCDecaux (DEC.FP) and Nexans (NEX.FP) are amongst notable companies that released latest numbers.
Looking ahead to tomorrow's EU econ-calendar, notable releases will include, amongst others, UK Jul distributive trades survey - CBI, France Jul consumer confidence, Italy Jul business/consumer confidence and Spain Jun retail sales, Q2 unemployment rate.
Digest:
Sectors - STOXX Europe 600:
Outperformers
Telecom +0.90%, Utilities +0.21%, Personal Care Drug and Grocery Stores +0.20%, Health Care +0.19%, Basic Resources +0.02%, Insurance (0.05%), Real Estate (0.27%), Chemicals (0.39%), Food, Beverage and Tobacco (0.56%), Banks (0.63%)
Underperformers
Media (2.85%), Technology (2.70%), Autos & Parts (1.64%), Ind Goods & Svcs (1.50%), Consumer Products and Services (1.26%), Financial Svcs (1.03%), Construct & Mtls (0.95%), Travel & Leisure (0.75%), Retail (0.75%)
Macro:
Central banks:
EU:
Von der Leyen writes to EU leaders asking for Commission nominees -- Politico
UK:
Travel/leisure, basic resources, autos and insurance the biggest decliners whilst healthcare, personal care and telecom relative outperformers -- Gov.UK
Germany:
Germany's failure to lead the EU is becoming a problem -- Economist
France:
Macron Seeks to Reassure CEOs on France at Pre-Olympics Lunch -- Bloomberg
Comment: France has entered its 'deckchairs on the Titanic' moment -- The Connexion
Italy:
Italy to present hydrogen corridor plan in autumn, may involve Switzerland -- Euractiv
Company news:
Notable Gainers
+22.8% BYW6.GR (BayWa €12.30, +2.58) -- prelim. H1 earnings
+18.2% IDIA.SW (Idorsia CHF2.39, +0.42) -- Q2 earnings
+16.1% INDV.LN (Indivior £9.70, +1.34) -- Q2 earnings; announces $100M share repurchase program
+13.7% VAIAS.FH (Vaisala €43.30, +5.35) -- Q2 earnings
+10.6% ELCO.LN (Eleco £1.28, +0.13) -- H1 trading update
+7.5% WAF.GR (Siltronic €76.00, -0.00) -- Q2 earnings
+7.1% LONN.SW (Lonza Group CHF561.60, +37.20) -- H1 earnings
+6.7% IGG.LN (IG Group Holdings £8.64, +0.57) -- FY earnings
+6.4% PDX.SS (Paradox Interactive SEK150.80, +9.00) -- Q2 earnings
+6.2% ULVR.LN (Unilever £47.02, +2.74) -- H1 earnings; updates on Ice Cream separation
+5.3% BATS.LN (British American Tobacco £26.35, +1.37) -- H1 earnings; launches share buyback
+5.0% VOS.GR (Vossloh €48.30, +2.40) -- H1 earnings
+4.8% ML.FP (Cie Generale des Etablissements Michelin SA €35.45, +1.67) -- H1 earnings
+4.2% SAN.FP (Sanofi €97.03, +3.92) -- Q2 earnings
+3.6% GSJ.SM (Grupo Empresarial San Jose €4.35, +0.15) -- H1 earnings
+3.2% BREE.LN (Breedon Group £4.00, +0.13) -- UBS upgrade
+3.1% SUBC.NO (Subsea 7 NOK215.00, +6.40) -- Q2 earnings
+2.6% UCB.BB (UCB €149.20, +3.85) -- H1 earnings
+2.3% ELIS.FP (Elis €20.94, +0.46) -- H1 earnings
+1.9% LEON.SW (Leonteq CHF23.15, -0.00) -- H1 earnings
+1.8% PEBB.LN (The Pebble Group £0.56, +0.01) -- H1 trading update
+1.5% ROG.SW (Roche Holding CHF281.10, +4.00) -- H1 earnings
+1.4% YNGA.LN (Young & Co.'s Brewery £9.98, +0.14) -- AGM update
Notable Decliners
-17.9% JDG.LN (Judges Scientific £93.20, -20.20) -- H1 trading update
-16.6% JMT.PL (Jeronimo Martins €16.77, -3.24) -- Q2 earnings
-14.1% BESI.NA (BE Semiconductor Industries €120.90, -19.85) -- Q2 earnings
-13.7% STMPA.FP (STMicroelectronics €33.11, -5.08) -- Q2 earnings
-12.4% SECARE.SS (Swedencare SEK49.38, -6.60) -- Q2 earnings
-9.9% CNA.LN (Centrica £1.31, -0.14) -- H1 earnings; Chair to step down
-9.5% AALB.NA (Aalberts €36.60, -3.80) -- H1 earnings
-9.0% BAER.SW (Julius Baer Group CHF47.48, -4.70) -- H1 earnings
-8.7% STLAM.IM (Stellantis €16.71, -1.59) -- H1 earnings; UK Jun car manufacturing
-8.6% IPN.FP (Ipsen €104.80, -9.60) -- H1 earnings; exclusive ex-U.S. licensing agreement to commercialize tovorafenib for most common childhood brain tumor
-8.6% SK.FP (SEB €96.80, -8.75) -- H1 earnings
-8.6% IPS.FP (Ipsos €58.55, -5.35) -- H1 earnings
-8.3% S30.FP (Solutions 30 €1.52, -0.14) -- Q2 revenue
-7.8% MTG.SW (Meier Tobler Group CHF29.70, -2.55) -- H1 earnings
-7.7% CEY.LN (Centamin £1.18, -0.10) -- H1 earnings
-7.7% DEC.FP (JCDecaux €20.02, -1.57) -- H1 earnings
-7.5% RNO.FP (Renault €43.54, -3.56) -- H1 earnings; Nissan's contribution to Renault Group Q2; UK Jun car manufacturing
-7.5% KER.FP (Kering €278.05, -22.45) -- H1 earnings; UBS downgrade
-7.0% AAF.LN (Airtel Africa £1.04, -0.08) -- Q1 earnings
-6.0% MCOV.B.SS (Medicover SEK202.50, -12.00) -- Q2 earnings
-5.9% PEUG.FP (Peugeot Invest €87.10, -5.30) -- new CEO
-5.8% VRLA.FP (Verallia €27.54, -1.66) -- H1 earnings
-5.8% DLAR.LN (De La Rue £0.94, -0.06) -- H1 earnings
-5.5% FPE3.GR (FUCHS SE €38.10, -2.16) -- BofA downgrade
-5.1% NESN.SW (Nestle CHF90.22, -4.74) -- H1 earnings
-4.9% RF.FP (Eurazeo €74.30, -3.75) -- H1 earnings
-4.8% CA.FP (Carrefour €13.98, -0.70) -- H1 earnings
-4.6% BUCN.SW (Bucher Industries CHF351.00, -17.00) -- H1 earnings
-4.4% VCP.LN (Victoria £1.60, -0.07) -- AGM statement
-4.4% WAVE.FP (Wavestone €54.90, -2.50) -- prelim. H1 earnings
-4.3% KSC.GR (KPS AG €0.90, -0.04) -- Q3 earnings
-3.9% ITV.LN (ITV £0.80, -0.03) -- H1 earnings
-3.7% HWDN.LN (Howden Joinery Group £9.16, -0.36) -- H1 earnings
-3.3% VANTI.FP (Vantiva €0.11, -0.00) -- H1 earnings
-2.6% AIXA.GR (Aixtron €19.28, -0.53) -- Q2 earnings
-2.4% CCC.SS (Cavotec SEK21.30, -0.50) -- Q2 earnings
-1.4% RTO.LN (Rentokil Initial £4.45, -0.07) -- H1 earnings
-1.3% AZN.LN (AstraZeneca £119.16, -1.54) -- Q2 earnings
-1.3% NEX.FP (Nexans €112.40, -1.50) -- BofA downgrade
EU companies reporting tomorrow:
Earnings:
Austria: Palfinger (PAL.AV)
Benelux: Warehouses De Pauw (WDP.BB), Umicore (UMI.BB), Proximus (PROX.BB), Cofinimmo (COFB.BB), Bekaert (BEKB.BB), Royal Vopak (VPK.NA), Signify (LIGHT.NA), Basic-Fit (BFIT.NA), Koninklijke Heijmans (HEIJM.NA)
France: Air Liquide (AI.FP), Capgemini (CAP.FP), Amundi (AMUN.FP), Bouygues (EN.FP), Bureau Veritas (BVI.FP), SPIE (SPIE.FP), Vallourec (VK.FP)
Germany: Mercedes-Benz Group (MBG.GR), BASF (BAS.GR), TRATON (8TRA.GR), Wacker Chemie (WCH.GR), HENSOLDT (HAG.GR)
Nordics: Hexagon (HEXA.B.SS), Svenska Cellulosa (SCA.B.SS), Konecranes (KCR.FH)
Southern Europe: Eni (ENI.IM), TERNA Rete Elettrica Nazionale (TRN.IM), Mapfre (MAP.SM), Semapa (SEM.PL), Sonaecom (SNC.PL)
Switzerland: Holcim Ltd. (HOLN.SW), Vontobel Holding (VONN.SW), BB Biotech (BION.SW), LEM Holding (LEHN.SW), Forbo Holding (FORN.SW), ams-OSRAM (AMS.SW)
UK: NatWest Group (NWG.LN), SEGRO (SGRO.LN), IMI (IMI.LN), Rightmove (RMV.LN), Man Group (EMG.LN), Babcock International Group (BAB.LN), Drax Group (DRX.LN)
Data:
Economics:
Eurozone Jun M3 Money Supply+2.2% y/y vs consensus +1.8% and prior +1.6%
UK
Q3 CBI Business Optimism Index (9) vs consensus 15 and prior 9
Jul CBI Industrial Trends Orders (32) vs consensus (19) and prior (18)
France Jul
Manufacturing Business Climate 94 vs consensus 98 and prior 99
Business Survey 95 vs consensus 99 and prior 98.8
Germany Jul IFO Business Climate 87.0 vs consensus 88.9 and prior 88.6
Current Conditions 87.1 vs consensus 88.5 and prior 88.3
Expectations 86.9 vs consensus 89.0 vs prior revised 88.8 from 89.0
Markets:
WTI Crude (24-Sep): +$0.09 or +0.12% to $77.68
€-$ +0.0018 or +0.17% to 1.0860
£-$ (0.0028) or (0.22%) to 1.2879
€-£ +0.0035 to 0.8434
S&P 500 +0.35%
Performance year-to-date:
FTSE 100: +5.86%
DAX: +9.24%
CAC: (1.54%)
MIB: +11.27%
Stoxx 600: +6.19%
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