Jul 31 ,2024
Synopsis:
European equity markets ended mostly higher and nearly unchanged from the open. Denmark and Netherlands both +1.4%, Norway +1.2%, FTSE100 +1.1% and Portugal +1.0% led the outperformers whilst Spain (1.1%), Italy (0.4%) and Belgium (0.3%) bucked the positive trend.
Main macro release in Europe was Eurozone CPI, which was higher than expected amid a rise in core reading. German unemployment a bit firmer than expected. Also, big drop in Swiss ZEW sentiment.
Meanwhile in the UK, Lloyds business barometer showed UK sentiment highest in eight years. Further in the UK, the government announced the budget for this year's renewable energy auction is being increased by £500M to over £1.5B. This includes £1.1B for offshore wind, an uplift of £300M. Also, the BBC cited UK Chancellor Reeves, who told the News Agents podcast on Tuesday the government will likely increase some taxes in October's budget after months of speculation over its stance. In France, caretaker finance minister Le Maire said the caretaker government will push ahead with steps needed to ensure parliament will have budget bills to vote on later this year.
Central bank commentary also in focus ahead of BOE interest rate decision tomorrow. The London Times shadow MPC has urged the BoE to leave policy unchanged this week after voting 7-2 for leaving the Bank Rate at 5.25%. While some London Times MPC members emphasized the decision was finally balanced, domestic price pressure is still thought to be resistant to restrictive policy with wages and services prices incompatible with the BoE target.
A busy day for European corporate earnings. Out of France, Airbus (AIR.FP) reported Q2 Adj. EBIT ahead of estimates while L'Oreal (OR.FP) H1 Adj. EPS missed, latter also announced a new €500M share buyback to launch during H2. Danone (BN.FP) reported better-than-expected H1; Safran (SAF.FP) also posted strong H1 but market participants are cautious of confirmed FY24 guidance . Schneider Electric (SU.FP) H1 results were better than forecast and group upgraded FY24 targets. Out of DACHs, Fresenius (FRE.GR) beat whilst Siemens Healthineers (SHL.GR) shares were down post Q3. Adidas (ADS.GR) confirmed prelim Q2 earnings and FY24 outlook as per 16-Jul update. Deutsche Lufthansa (LHA.GR) also reported final Q2 earnings. Out of the UK, GSK Plc (GSK.LN) reported better-than-expected Q2 numbers and raised FY24 guidance; Metro Bank Holdings (MTRO.LN) reported H1 and also upgraded its guidance. Rio Tinto (RIO.LN) and HSBC Holdings (HSBA.LN) also released latest numbers. In Spain, Banco Bilbao Vizcaya Argentaria (BBVA.SM) posted better- than-expected Q2 results and Telefonica (TEF.SM) posted Q2 EBITDA above estimates and reiterated 2024 guidance.
In M&A, Millicom (Tigo) announced potential acquisition of Telefonica's (TEF.SM) stake in Coltel for $400M in cash. Veolia Environnement (VIE.FP) announced sale of its sulfuric acid regeneration business in North America for $620M. In an interview, Covestro (1COV.GR) CFO saif company is still in concrete negotiations with Adnoc and making good progress. Elsewhere, ThyssenKrupp (TKA.GR) completed the sale of 20% stake by EPCG in thyssenkrupp's steel business.
Digest:
Sectors - STOXX Europe 600:
Outperformers
Technology +2.56%, Basic Resources +2.23%, Oil & Gas +1.82%, Ind Goods & Svcs +1.37%, Food & Beverage +0.90%
Underperformers
Retail (0.37%), Autos & Parts (0.36%), Telecom (0.18%), Banks (0.16%), Media (0.09%), Insurance (0.07%), Construct & Mtls (0.03%), Real Estate+0.11%, Travel & Leisure +0.24%, Utilities +0.26%, Persnl & HHold Goods +0.27%, Financial Svcs +0.64%, Chemicals +0.72%, Health Care +0.78%
Macro/Peripheral markets:
Europe
Will a heat wave in Eastern Europe upset global food supply? - DW
Central Banks
BoE urged to leave interest rates unchanged - London Times
Investors beef up bets on BoE interest rate cut- FT
BoE losses cost government £45B - London Times
SNB reports half-year profit as strong stocks offset franc gains - Bloomberg
Geopolitics
UK
Chancellor Reeves concedes taxes will have to rise - BBC
Which tax rises could the Labour government introduce in the autumn budget? - Sky
Lloyds Bank business barometer showed optimism among UK firms reached its highest level in more than seven years in July- Lloyds release
Deputy PM writes to metro mayors and local authorities about playing their parts in building the homes we need
Housing minister writes to stakeholders - gov.uk
Housing targets increased to get Britain building again - gov.uk
New independent New Towns Taskforce set up; aim to present a final shortlist of recommendations on appropriate locations to ministers within 12 months - gov.uk
France
Le Maire will push ahead with budget process - Bloomberg
Germany
Italy
PwC says Italian bad debt sales hit multi-year low in Q1 - Reuters
Ireland
Review calls for high-speed intercity trains - All-Island Strategic Rail Review
Greece
Household electricity bills subsidies set to be reduced - ekathimerini
Company news:
Notable Gainers
+29.9% MTRO.LN (Metro Bank Holdings £0.52, +0.12) -- reports H1 underlying EPS (3.9p) vs year-ago 7.8p; upgrades guidance
+16.1% DMYD.B.SS (Diamyd Medical SEK19.16, +2.66) -- positive interim analysis results for Phase 3 trial in Type 1 diabetes
+15.7% AG1.AV (Auto1 Group €7.91, +1.07) -- reports Q2 adjusted EBITDA €20.7M vs year-ago (€14.8M); raises FY outlook
+12.3% IPF.LN (International Personal Finance £1.55, +0.17) -- earnings; buyback
+12.2% TMV.GR (TeamViewer €12.37, +1.35) -- reports Q2 adjusted EPS €0.24 vs FactSet €0.19 [3 est, €0.15-0.23]; confirms FY outlook
+11.2% EAPI.FP (Euroapi €3.72, +0.37) -- reports H1 net income (€34.8M) vs year-ago €62.8M
+11.1% VRCI.LN (Verici Dx £0.08, +0.01) -- launch of PTRA Assay using Verici Dx's technology
+11.0% CNR.LN (Condor Gold Plc £0.23, +0.02) -- updates on sale of assets
+9.5% TEP.FP (Teleperformance €118.30, +10.30) -- reports H1 adjusted net income €432M, +26% vs year-ago €343M
+9.1% JDEP.NA (JDE Peet's €20.16, +1.69) -- reports Q2 underlying EPS €0.76 vs year-ago €0.85; raises FY outlook
+8.6% TKWY.NA (Just Eat Takeaway.com €11.81, +0.94) -- earnings; buyback
+7.5% POLX.LN (Polarean Imaging £0.02, -0.00) -- agreement
+6.5% FXPO.LN (Ferrexpo £0.59, +0.04) -- reports H1 EPS $9.26 vs year-ago $4.54
+6.4% KRZ.ID (Kerry Group €86.30, +5.20) -- reports H1 adj. EPS €1.94 vs consensus €1.92; upgrades FY constant currency adjusted EPS guidance to 7% to 10% (previously 5.5% to 8.5%).
+6.2% LR.FP (Legrand €99.58, +5.80) -- reports Q2 net income €301.7M vs consensus €287.1M; FY24 target unchanged
+6.0% RAT.LN (Rathbones Group £18.98, +1.08) -- reports H1 EPS 42.8p vs FactSet 78.1p [1 est]
+5.5% ASML.NA (ASML Holding €850.40, +44.70) -- Reuters reports new US rule on foreign chip equipment exports to China to exempt some allies including Netherlands, Japan and South Korea
+5.3% LI.FP (Klepierre €26.62, +1.34) -- reports H1 CFPS €1.25 vs year-ago €1.21; raises FY CFPS guidance to €2.50-2.55 vs prior guidance €2.45-2.50
+5.3% MELE.BB (Melexis €81.05, +4.05) -- reports Q2 EPS €1.21 vs FactSet €1.25 [3 est, €1.20-1.30]
+4.8% AIR.FP (Airbus SE €140.04, +6.46) -- reports Q2 Adj. EBIT €814M vs consensus €699M; confirms FY guidance
+4.8% IQE.LN (IQE £0.31, +0.01) -- plans for IPO of Taiwan operating subsidiary on Taiwan Stock Exchange
+4.7% ASM.NA (ASM International €635.40, +28.80) -- Reuters reports new US rule on foreign chip equipment exports to China to exempt some allies including Netherlands, Japan and South Korea
+4.6% COTN.SW (COMET Holding CHF352.00, +15.50) -- reports H1 net income CHF4.1M vs FactSet CHF11.6M [3 est, CHF9-15.9M]; reaffirms FY guidance
+4.5% ENC.SM (ENCE Energia y Celulosa €3.25, +0.14) -- reports Q2 net income €23.1M vs FactSet €25.8M [4 est, €20-37.5M]
+4.0% HSBA.LN (HSBC Holdings £7.04, +0.27) -- reports Q2 EPS $0.35 vs consensus $0.32
+3.8% FRE.GR (Fresenius €33.11, +1.21) -- reports Q2 EPS €0.81 vs consensus €0.67
+3.7% DEEZR.FP (Deezer €1.80, +0.06) -- earnings; buyback
+3.7% VIRI.FP (Viridien €47.48, +1.68) -- reports Q2 operating income $26M vs FactSet $28.0M [1 est]
+3.7% SU.FP (Schneider Electric €224.00, +7.90) -- reports H1 Adj EPS €4.01 vs consensus €3.79; upgrades FY24 targets
+3.5% TPEIR.GA (Piraeus Financial Holdings €3.90, +0.13) -- reports Q2 net income attributable €330M ex-items vs FactSet €278.2M [7 est, €261.3-291.3M]; sees potential upside to FY EPS ex-items guidance
+3.4% ROVI.SM (Laboratorios Farmaceuticos Rovi, S.A. €89.15, +2.95) -- reports H1 net income attributable €44.3M vs FactSet €42M [1 est]
+3.0% VIS.SM (Viscofan €61.50, +1.80) -- reports Q2 net income €37.2M vs FactSet €36.2M [4 est, €34.7-37.1M]
+3.0% SUR.GR (Surteco Group €13.90, +0.40) -- earnings
+3.0% ONTEX.BB (Ontex Group €8.69, +0.25) -- reports Q2 operating income from continuing operations (€3.1M) vs year-ago €18.6M; revises upwards FY24 guidance
+2.8% SON.PL (Sonae SGPS €0.95, +0.03) -- reports Q2 net income attributable €50M vs FactSet €47M [1 est] (post EU close 30-Jul)
+2.6% NEM.GR (Nemetschek €88.35, +2.20) -- reports confirms prelim Q2 earnings and FY outlook as per 23-Jul update
+2.3% TKA.GR (ThyssenKrupp €3.54, +0.08) -- ThyssenKrupp completes sale of 20% stake by EPCG in thyssenkrupp's steel business
+2.2% BN.FP (Danone €60.14, +1.30) -- reports H1 recurring EPS €1.80 vs consensus €1.72; 2024 guidance confirmed
+2.2% COL.SM (Inmobiliaria Colonial SOCIMI €5.39, +0.12) -- reports H1 recurring net profit €92M, +6% vs year-ago €87M
+2.2% FDM.LN (FDM Group (Holdings) £4.22, +0.09) -- reports H1 EPS 11.7p ex-items vs year-ago 16.8p
Notable Decliners
-23.7% EBUS.NA (Ebusco Holding €1.17, -0.36) -- reports H1 net income (€64.7M) vs year-ago (€35.8M)
-9.7% COIC.SS (Concentric SEK164.80, -17.80) -- reports Q2 EPS SEK2.47 ex-items vs FactSet SEK1.67 [2 est, SEK0.73-2.61]; Q3 sales to be slightly weaker than Q2
-6.6% SHL.GR (Siemens Healthineers €49.69, -3.51) -- reports Q3 net income €445M vs consensus €445M; expectations for FY24 adj basic EPS unchanged at between €2.10 and €2.30 vs FactSet €2.20
-6.1% MTU.FP (Manitou BF €21.60, -1.40) -- reports H1 net income €81.8M, +31% vs year-ago €62.6M
-5.9% KGX.GR (Kion Group €36.90, -2.30) -- reports Q2 net income €70.7M vs preliminary ~€69M; narrows FY revenue and adj. EBIT guidance
-5.9% AENA.SM (Aena S.M.E. €175.60, -11.10) -- reports H1 net income €808.6M vs FactSet €828M [1 est]; approves a proposal of five cents per passenger
-4.7% FER.SM (Ferrovial €36.90, -1.84) -- reports H1 net income €414M vs year-ago €114M
-4.0% BBVA.SM (Banco Bilbao Vizcaya Argentaria €9.77, -0.41) -- earnings
-3.7% DBV.FP (DBV Technologies €0.92, -0.03) -- reports Q2 EPS ($0.34) vs FactSet ($0.45) [3 est, ($0.62)-(0.20)]
-3.3% MAIRE.IM (MAIRE €7.41, -0.25) -- H1 earnings
-3.3% TKO.FP (Tikehau Capital €23.40, -0.80) -- reports H1 net income group share €57.5M vs FactSet €112.2M [1 est]
-3.0% ADS.GR (Adidas €229.40, -7.20) -- confirms prelim Q2 earnings and FY24 outlook as per 16-Jul update
-2.9% RECAF (Reconnaissance Energy Africa $0.76, -0.02) -- enters definitive farm down agreement with BW Energy for sale of 20% working interest in PEL 73
-2.7% GGP.LN (Greatland Gold £0.07, -0.00) -- operational update
-2.5% LDO.IM (Leonardo €22.08, -0.56) -- reports Q2 EBITA €321M vs consensus €313.0M; confirms FY24 guidance
-2.4% AED.BB (Aedifica €58.90, -1.45) -- reports H1 EPRA EPS €2.50 vs year-ago €2.76; improves outlook for 2024
-2.2% KSB.GR (KSB €660.00, -15.00) -- reports H1 EBIT €116.3M vs year-ago €112.1M; reaffirms FY outlook
-2.0% GSK.LN (GSK Plc £15.12, -0.31) -- reports Q2 core EPS 43.4p vs consensus 38.9p; raises FY24 guidance
-1.9% KRN.GR (Krones €125.80, -2.40) -- reports Q2 EPS €2.19 vs FactSet €1.59 [4 est, €0.00-2.14]
-1.7% WKL.NA (Wolters Kluwer €154.90, -2.70) -- earnings
-1.4% VOS.GR (Vossloh €49.30, -0.70) -- to acquire Sateba Group for €450M
-1.4% LHA.GR (Deutsche Lufthansa €5.81, -0.08) -- reports final Q2 earnings: EPS €0.39 vs FactSet €0.44 [5 est, €0.24-0.70]
-1.2% DATA.LN (GlobalData £2.15, -0.02) -- reports H1 adjusted EPS 3.8p vs year-ago 3.4p; remains on track to deliver results in line with its expectations for FY24
-1.2% SOLB.BB (Solvay €32.78, -0.40) -- reports Q2 Underlying net income €116M vs consensus €105M; now guides FY organic growth of underlying EBITDA to -10-15% vs prior guidance -10-20%
-1.2% SAF.FP (Safran €202.50, -2.50) -- reports H1 EPS €3.27 vs consensus €3.26; confirms FY24 outlook
-1.2% ISP.IM (Intesa Sanpaolo €3.75, -0.05) -- considers acquisition of domestic rival unlikely due to its market share - Reuters (30-Jul, 16:22 CET)
-1.2% IFCN.SW (Inficon Holding CHF1,306.00, -16.00) -- reports Q2 Operating income $33.7M vs FactSet $35.2M [3 est, $31.4-40.3M]; narrows targeted sales range
-1.1% HER.IM (Hera €3.39, -0.04) -- H1 earnings
EU companies reporting tomorrow:
Earnings:
Benelux: Allfunds Group (ALLFG.NA), DSM-Firmenich (DSFIR.NA)
DACHs: Covestro (1COV.GR), Heidelberg Materials (HEI.GR), Fresenius Medical Care (FME.GR), FUCHS (FPE.GR), Biotest (BIO.GR), Redcare Pharmacy (RDC.GR), Clariant (CLN.SW), Avolta (AVOL.SW), Kardex Holding (KARN.SW), SIG Group (SIGN.SW), Sika (SIKA.SW), Raiffeisen Bank International (RBI.AV)
France: Airbus (AIR.FP), L'Oreal (OR.FP), Casino, Guichard-Perrachon (CO.FP), Bollore (BOL.FP), Rexel (RXL.FP), SCOR (SCR.FP), Manitou BF (MTU.FP), Tikehau Capital (TKO.FP), NRJ Group (NRJ.FP), Altarea (ALRA.FP), EUROAPI (EAPI.FP), Deezer (DEEZR.FP), Teleperformance (TEP.FP), Viridien (VIRI.FP)
Italy: Intesa Sanpaolo (ISP.IM), Davide Campari-Milano (CPR.IM), Leonardo (LDO.IM), Recordati (REC.IM), A2A (A2A.IM), FinecoBank (FBK.IM), Poste Italiane (PST.IM), Fincantieri (FCT.IM), Ascopiave (ASC.IM), Biesse (BSS.IM), Elica (ELC.IM), Banco di Desio e della Brianza (BDB.IM), Industrie De Nora (DNR.IM), Brembo (BRE.IM), Amplifon (AMP.IM)
Nordics: Securitas (SECU.B.SS), Musti Group (MUSTI.FH), Storytel (STORY.B.SS)
Portugal: EDP-Energias de Portugal (EDP.PL), Sonae (SON.PL)
Spain: Prosegur (PSG.SM), Applus Services (APPS.SM), Ferrovial (FER.SM), Laboratorio Reig Jofre (RJF.SM), Viscofan (VIS.SM), Unicaja Banco (UNI.SM), Grifols (GRF.SM), ACS Actividades de Construccion y Servicios (ACS.SM), Fomento de Construcciones y Contratas (FCC.SM), ENCE Energia y Celulosa (ENC.SM)
UK: bp (BP.LN), Diageo (DGE.LN), Standard Chartered (STAN.LN), Rio Tinto (RIO.LN), Greggs (GRG.LN), The Weir Group (WEIR.LN), Games Workshop Group (GAW.LN), Filtronic (FTC.LN), Bodycote (BOY.LN), SDI Group (SDI.LN), NWF Group (NWF.LN), St. James's Place (STJ.LN), Inchcape (INCH.LN), Foxtons Group (FOXT.LN), Croda International (CRDA.LN), Convatec Group (CTEC.LN), Essentra (ESNT.LN), Spectris (SXS.LN), Sabre Insurance Group (SBRE.LN), Staffline Group (STAF.LN), Pod Point Group Holdings (PODP.LN)
Data:
Economics:
Eurozone Jul Prelim CPI +2.6% y/y vs cons +2.4% and prior +2.5%; 0.0% m/m vs cons (0.3%) and prior +0.2%
Core CPI +2.9% y/y vs consensus +2.8% and prior +2.9%
Germany Jul Unemployment Change +18K vs cons +15K and prior +19K
Unemployment Rate 6.0% vs cons 6.0% and prior 6.0%
France
Jul Prelim CPI +2.3% y/y vs cons +2.4% and prior +2.2%; +0.1% m/m vs cons +0.3% and prior +0.1%
EU Harmonised: +2.6% y/y vs cons +2.7% and prior +2.5%; +0.1% m/m vs cons +0.3% and prior +0.2%
Jun PPI (6.0%) y/y vs cons +2.2% and prior (6.7%); (0.3%) m/m vs cons +0.4% and prior revised (1.6%) from (1.4%)
Italy Jul Prelim CPI +1.3% y/y vs cons +1.2% and prior +0.8%; +0.5% m/m vs cons +0.2% and prior +0.1%
EU Harmonised: +1.7% y/y vs cons +1.2% and prior +0.9%; (0.8%) m/m vs cons (1.1%) and prior +0.2%
Switzerland Jul ZEW Expectations 9.4 vs cons 18.0 and prior 17.5
Portugal Jul Preliminary CPI +2.5% y/y vs cons +2.9% and prior +2.8%; (0.6%) m/m vs cons +0.1% and prior 0.0%
Greece
Jun Unemployment Rate 9.6% vs cons 10.7% and prior revised 10.3% from 10.6%
May Retail Sales +10.5% y/y vs prior revised (6.2%) from (6.3%)
Austria Jul preliminary CPI +2.9% y/y vs prior +3.0%
Netherlands Jul Preliminary CPI +3.7% y/y vs cons +2.8% and prior +3.2%
Denmark Jun Unemployment Rate 2.5% vs cons 2.6% and prior 2.5%
Markets:
WTI Crude (Sep 24): +$2.32 or +3.10% to
$77.05 €-$ +0.0013 or +0.12% to 1.0828
£-$ +0.0007 or +0.05% to 1.2843
€-£ +0.0006 to 0.8432
S&P 500 +1.69%
Performance year-to-date
FTSE 100: +8.21%
DAX: +10.49%
CAC: (0.15%)
MIB: +11.24%
Stoxx 600: +8.18%
This information and data is provided for general informational purposes only. The Bank of New York Mellon and our information suppliers do not warrant or guarantee the accuracy, timeliness or completeness of this information or data. We provide no advice nor recommendation or endorsement with respect to any company or securities. We do not undertake any obligation to update or amend this information or data. Nothing herein shall be deemed to constitute an offer to sell or a solicitation of an offer to buy securities.
Please refer to "Terms Of Use".
DEPOSITARY RECEIPTS:
NOT FDIC, STATE OR FEDERAL AGENCY INSURED
MAY LOSE VALUE
NO BANK, STATE OR FEDERAL AGENCY GUARANTEE