Sep 04 ,2024
Synopsis:
European equity markets closed lower. Portugal +0.5% and Belgium +0.1% buck the lower trend and lead outperformers, whilst Denmark (1.7%), The Netherlands and Switzerland (1.4%) lead underperformers.
Market sentiment soured by by AI/tech rout. Comes after Nasdaq experienced worst session in a month yesterday. Nothing specific with strategists pointing to previous concerns about AI capex ramp and ROI, and lofty valuations. NVDA at center of concerns with regulatory scrutiny another overhang following Bloomberg report it was issued DOJ subpoena as part of antitrust investigation. Weaker-than-expected US ISM manufacturing heightened concerns about US growth outlook. Negative seasonality another bearish talking point with September typically one of the worst months of the year for equities. Positioning and sentiment indicators less attractive while election uncertainty mentioned as another overhang. Reports said OPEC+ discussing delay to oil output increase from October after prices fell to lowest level of the year.
In Europe, Final August Services PMI for Eurozone revised lower to 52.9, but confirmed seventh month of expansion. Final UK Services PMI revised higher at 53.7 confirming tenth month of expansion. ECB's Simkus said October rate cut after September "quite unlikely". Market now discounting only 34% of October rate cut. ECB's Nagel sees inflation on right track but urged vigilance. In UK, concerns continue to mount regarding Labour's tax hikes in October budget.
On a light reporting front, Barratt Developments (BDEV.LN) FY adj EPS beat, revenue miss; M&G Plc (MNG.LN) H1 adj operating profit beat, interim divi unch. y/y. In other corporate news, Telia Co. (TELIA.SS) announced a change program targeting annual savings of at least SEK 2.6B. In Syndicate, Deliveroo (ROO.LN) holder reportedly offering up to 28.5M shares. On the M&A newsflow, Segro (SGRO.LN) announced a recommended all-share offer for Tritax EuroBox (EBOX.LN), valuing Tritax EuroBox at ~£552M. In potential deals, German government to take first step towards selling 3-5% stake in Commerzbank (CBK.GR).
Looking ahead to tomorrow's calendar (see - Europe Week Ahead: 02-Sep to 06-Sep attached) Rubis (RUI.FP), Moltiply Group (MOL.IM), Sanlorenzo (SL.IM), Vistry (VTY.LN), International Public Partnerships Ltd. (INPP.LN), Genus (GNS.LN),Volvo Car (VOLCAR.B.SS), and SFS Group (SFSN.SW) will be among other names to update investors, whilst the macro-calendar releases will include Germany Jul factory orders, Aug construction PMI, Switzerland Aug unemployment rate, UK Aug construction PMI, Eurozone Jul retail sales, Ireland Q2 final GDP
Digest:
Sectors - STOXX Europe 600:
Outperformers:
Real Estate +0.84%, Telecom +0.50%, Utilities +0.05%, Personal Care Drug and Grocery Stores +0.01%, Chemicals (0.19%), Banks (0.26%), Food, Beverage and Tobacco (0.30%), Media (0.61%), Energy(0.70%), Financial Svcs (0.89%), Basic Resources (0.93%), Retail (0.93%), Ind Goods & Svcs (1.02%), Health Care (0.97%),
Underperformers:
Technology (3.24%), Consumer Products and Services (2.96%), Travel & Leisure (1.41%), Autos & Parts (1.22%), Construct & Mtls (1.16%),
Macro/Peripheral markets:
Geopolitics
UK
Starmer defends cutting winter fuel payments - BBC, The Guardian
Robert Jenrick on top in first round of Tory leadership race as Priti Patel eliminated - The Telegraph
France
Germany
"If we increase deterrence, then it is not an escalation" - Handelsblatt
German car market collapses in August - Handelsblatt
Greece
Greece to wrap up post-crisis bank privatizations with October stake sale - ekathimerini
Switzerland
Swiss investigate alleged referendum fraud - Reuters
Spain
Spain names minister José Luis Escrivá as central bank chief - FT
Norway
Norway's Home Prices Shrug Off Decline to Rebound in August - Bloomberg
Sweden
Sweden Foreign Minister Tobias Billstrom Resigns - Bloomberg
Finland
Government's 2025 budget proposal - release
Company news:
Trading Higher:
+20.9% ACE.SS (Ascelia Pharma SEK2.69, +0.46) -- outcome of rights issue
+6.6% INTRUM.SS (Intrum SEK47.05, +2.93) -- new CFO
+6.2% KAMBI.SS (Kambi Group SEK121.40, +7.10) -- Genius Sports provides comments on media speculation regarding potential acquisition of company
+5.9% YOU.LN (YouGov £5.00, +0.28) -- HSBC upgrade
+4.2% ECOR.LN (Ecora Resources £0.60, +0.02) -- H1 earnings
+4.1% ECEL.LN (Eurocell £1.51, +0.06) -- H1 earnings
+3.1% FFARM.NA (ForFarmers €3.13, +0.10) -- feed business combination with team agrar in Germany
+3.0% AFK.NO (Arendals Fossekompani NOK170.00, +5.00) -- updates on acceptances of Edison Bidco offer
+2.4% SPM.IM (Saipem €1.92, +0.05) -- awarded two offshore contracts in Saudi Arabia valued at ~$1B
+1.8% COA.LN (Coats Group £0.98, +0.02) -- final de-risking of UK pension scheme
Trading Lower:
-13.2% STX.LN (Shield Therapeutics £0.05, -0.01) -- H1 earnings
-11.9% CRTA.LN (Cirata £0.37, -0.05) -- H1 earnings
-8.3% IIA.AV (Immofinanz €26.35, -2.40) -- sets cash compensation for S IMMO AG's minority shareholders at €22.05/sh
-5.9% ASML.NA (ASML Holding €736.00, -46.50) -- UBS downgrade
-5.8% AAF.LN (Airtel Africa £1.10, -0.07) -- JPMorgan downgrade
-5.2% EQLS.LN (Equals Group £1.14, -0.06) -- further strategic review update and extension of PUSU deadline
-4.6% DHG.ID (Dalata Hotel Group €4.16, -0.20) -- H1 earnings
-4.3% BDEV.LN (Barratt Developments £4.99, -0.23) -- FY earnings
-3.5% CTEC.LN (ConvaTec Group £2.29, -0.08) -- BofA downgrade
-2.8% METSO.FH (Metso Corp. €8.69, -0.25) -- €255M one off expense for waste-to-energy business termination
-2.7% HFG.LN (Hilton Food Group £9.45, -0.26) -- H1 earnings
-2.4% CBK.GR (Commerzbank €12.77, -0.32) -- German government looking at selling 3-5% stake in Commerzbank - Bloomberg, citing people familiar with the matter
-2.1% CNA.LN (Centrica £1.24, -0.03) -- HSBC downgrade
-2.1% ABBN.SW (ABB Limited CHF47.29, -1.00) -- initiated underweight at Barclays
-1.9% CLAS.B.SS (Clas Ohlson SEK156.80, -3.00) -- Q1 earnings
EU companies reporting tomorrow:
Earnings:
Benelux: CVC Capital Partners (CVC.NA)
DACHs: Helvetia (HELN.SW), Zumtobel (ZAG.AV), 2G Energy (2GB.GR), MPH Health Care (93MI.GR)
France: Rubis (RUI.FP), STEF (STF.FP), Voltalia (VLTSA.FP)
Nordics: The Kingfish Company (KING.NO)
Southern Europe: Moltiply Group (MOL.IM), Sanlorenzo (SL.IM), IVS Group (IVS.IM), Sabaf (SAB.IM), Eurotech (ETH.IM)
UK/Ireland: Vistry (VTY.LN), International Public Partnerships Ltd. (INPP.LN), Genus (GNS.LN), Ashmore (ASHM.LN), Glenveagh Properties (GVR.ID), Alfa Financial Software (ALFA.LN), W.A.G. Payment Solutions (WPS.LN), Funding Circle (FCH.LN), Churchill China (CHH.LN)
Trading Update: Safestore (SAFE.LN)
Traffic: Norwegian Air Shuttle (NAS.NO)
CMD/events: Volvo Car (VOLCAR.B.SS), SFS Group (SFSN.SW), Kendrion (KENDR.NA), CompuGroup Medical (COP.GR), Tomra Systems (TOM.NO), UPM-Kymmene (UPM.FH)
Data:
Economics:
Services PMI Aug
Sweden 52.9 vs consensus 53.7 and prior 53.8
Spain 54.6 vs consensus 54.5 and prior 53.9
Italy 51.4 vs consensus 52.6 and prior 51.7
France 55.0 vs preliminary 55.0
Germany 51.2 vs preliminary 51.4
Eurozone 52.9 vs preliminary 53.3
UK 53.7 vs preliminary 53.3
Eurozone Jul PPI (2.1%) y/y vs consensus (2.5%) and prior revised (3.3%) from (3.2%); +0.8% m/m vs consensus +0.3% and prior revised +0.6% from +0.5%
Ireland Aug Unemployment Rate 4.3% vs consensus 4.7% and prior 4.7%
Markets:
WTI Crude (Oct 24): ($0.34) or (0.48%) to $70.00
€-$ +0.0037 or +0.33% to 1.1083
£-$ +0.0033 or +0.25% to 1.3147
€-£ +0.0008 to 0.8430
S&P 500 +0.02%
Performance year-to-date
FTSE 100: +6.94%
DAX: +10.99%
CAC: (0.56%)
MIB: +10.95%
Stoxx 600: +7.48%
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