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StreetAccount Summary - EU Market Recap: FTSE 100 (0.13%) to 8195.42, DAX +0.34% to 18327.57, CAC40 (0.12%) to 7399.00, STOXX 600 +0.01% to 508.00

Sep 11 ,2024

  • Synopsis:

    • European equity markets ended mixed to lower with pan-European indices reversing earlier gains in the last couple of hours of trading. Denmark +1.5%, Portugal +1.1%, Norway +0.4% lead the outperformers whilst Finland (1.0%), Greece (0.9%) and Sweden (0.5%) led the underperformers.

    • Market attention turns to US August CPI data, with core CPI increasing 0.3% m/m, above consensus 0.2% and July's gain of 0.2%. Annualized core of 3.2% in line with consensus. Headline CPI rose 0.2% m/m, in line with consensus and prior reading of 0.2%. CPI has taken on less significance from a Fed perspective given focus on labor market, though may still shape expectations surrounding size of upcoming Fed rate cuts. Rate pricing volatile lately with 25 bp September rate cut base case expectation. However, futures still pricing in at least two 50 bp rate cuts by end of Jan-2025.

    • Meanwhile in Europe, focus was on UK monthly activity data, which stalled in July and followed flat reading in June, fitting in with expectations for moderation in Q3 growth after decent expansion in first half of the year. In politics, Reuters cited UK employment minister McGovern, who said government will revive active job market policies to help boost employment and reduce inactivity rate. It noted that at the end of last year Britain was the only G7 economy to report lower employment rate and higher inactivity rate since Covid. Government wants to raise employment rate to 80% from under 75%, something that has never happened in records back to the 1970s.

    • In corporate news flow this morning, big rally in Commerzbank (CBK.GR) shares after UniCredit (UCG.IM) said it acquired about 9% of the German bank's shares. UniCredit purchased 4.49% from the German government, which aimed to reduce its stake in Commerzbank, with the remainder bought through market transactions. UniCredit now seeks regulator's approval to further increase its holding in Commerzbank. Further in Germany, Covestro (1COV.GR) was in the spotlight as ADNOC confirmed €14.4B bid. Also in notable M&A developments, overnight REA Group (REA.AU) confirmed non-binding indicative proposal for Rightmove (RMV.LN) at implied 705p/sh; this morning the board of Rightmove issued a press release and said it had carefully considered the proposal, together with its financial advisers, and concluded that it was wholly opportunistic and fundamentally undervalued Rightmove and its future prospects. Accordingly, the board unanimously rejected the proposal on 10-Sep.

    • In earnings and trading updates, out of the UK, WH Smith (SMWH.LN) released a pre-close trading update with group revenue up 7% for the year and announced £50M share buyback. Rentokil (RTO.LN) issued a profit warning for its North American operations with organic growth and operating margins revised lower for H2. Further amidst decliners following a profit warning, Husqvarna (HUSQ.B.SS) warned challenging market conditions continued to impact financial performance in Q3. Neste (NESTE.FH) also lowered its FY24 guidance for Renewable Products.

  • Digest:

    • Sectors - STOXX Europe 600:

      • Outperformers

        • Retail +1.38%, Technology +1.21%, Chemicals +0.41%, Basic Resources +0.38%, Autos & Parts +0.30%, Telecom +0.18%, Insurance +0.07%, Oil & Gas +0.06%, Travel & Leisure +0.05%

      • Underperformers

        • Real Estate(0.85%), Persnl & HHold Goods (0.42%), Ind Goods & Svcs (0.40%), Construct & Mtls (0.34%), Food & Beverage (0.27%), Utilities (0.10%), Health Care (0.09%), Media (0.06%), Financial Svcs (0.05%), Banks (0.01%)

    • Macro/Peripheral markets:

      • EU

        • Von der Leyen delays Commissioner appointments amid left-wing pressure and candidate controversies - FT

        • Suppliers spooked by Draghi's call to decouple price of green electricity from gas - Euronews

      • Geopolitics

        • Spain PM Sanchez urges EU to reconsider China EV tariffs, warns against trade war - Bloomberg, Reuters

      • UK

        • Starmer secures winter fuel cut victory, but faces growing opposition on multiple fronts - FT

        • Research shows UK savers sitting on £430B in cash- CityAM, FT

        • UK economy stagnates as GDP flatlines for second month in a row - The Times

        • The UK is backing away from oil - Politico

      • France

        • French central bank sees Q3 Olympic growth boost - Reuters

      • Germany

        • Germany upsets its neighbours with border clampdown - FT

        • Olaf Scholz stresses Germany's need for immigrants - DW

      • Greece

    • Company news:

      • Notable Gainers

        • +16.3% CBK.GR (Commerzbank €14.68, +2.06) -- German government sells around 4.5% stake in Commerzbank to Unicredit (UCG.IM) for €13.20 per share

        • +14.7% ANP.LN (Anpario £3.13, +0.40) -- earnings

        • +13.8% PIG.FP (Haulotte Group €3.05, +0.37) -- reports H1 net income €15M vs year-ago €1M

        • +11.4% TRST.LN (Trustpilot Group £2.16, +0.22) -- reports H1 EPS $1.70 vs FactSet $0.01 [1 est]; launches £20M share buyback; now expects adjusted EBITDA to be towards the top end of market expectations

        • +10.7% SMWH.LN (WH Smith £13.58, +1.31) -- pre-close trading update; group revenue up 7% for the year; announces £50M share buyback

        • +9.6% IBAB.BB (Ion Beam Applications €11.84, +1.04) -- financing

        • +9.6% GYM.LN (Gym Group £1.58, +0.14) -- earnings

        • +8.0% ARCH.NO (Archer NOK21.40, +1.59) -- contract

        • +4.5% ITX.SM (Inditex €48.36, +2.08) -- reports H1 net income €2.78B vs FactSet €2.78B; Autumn/Winter collections have been very well received by customers

        • +3.6% NHY.NO (Norsk Hydro NOK57.42, +1.98) -- initiation of share buyback program for up to 100M shares

        • +1.9% BT.A.LN (BT Group £1.43, +0.03) -- Telecom Italia among suitors for residual BT business in Italy -- Reuters, citing sources (10-Sep, post European close)

        • +1.2% BWO.NO (BW Offshore NOK25.85, +0.30) -- releases presentation material in connection with Pareto Securities' Energy Conference; confirms FY 2024 EBITDA outlook in range of $305-315M vs FactSet $303.67M

        • +1.1% ENOG.LN (Energean £8.96, +0.10) -- reports H1 net income $116M vs year-ago $27M; now guides FY group production guidance 155 - 165 kboed vs prior guidance 155-175 kboed

        • +1.0% ULTI.NO (Ultimovacs NOK0.00, +0.02) -- announces patient recruitment discontinuation in LUNGVAC trial

        • +1.0% 1COV.GR (Covestro €55.84, +0.54) -- Adnoc to make formal €14.4B offer for Covestro this year - FT

      • Notable Decliners

        • -40.5% CHAR.LN (Chariot £0.04, -0.03) -- well update

        • -27.3% GGP.LN (Greatland Gold £0.05, -0.02) -- enters agreement with Newmont Corporation to acquire interest in Havieron gold-copper project, Telfer gold-copper mine, and other related interests in assets in the Paterson region for a total of $475M

          • places 5.18B new ordinary shares at 4.8p per Placing Share, for a total oversubscribed placing of ~ £248.6M (~$325.0M)

        • -19.8% RTO.LN (Rentokil Initial £3.82, -0.94) -- trading update; expects FY 24 Group adjusted PBTA £700M

        • -12.9% HOCN.SW (HOCHDORF Holding CHF2.70, -0.40) -- board remains in support of AS Equity Partners offer, dismisses Newlat Group S.A. proposal

        • -9.6% NESTE.FH (Neste €16.05, -1.70) -- lowers 2024 guidance for Renewable Products

        • -8.6% COST.LN (Costain Group £0.97, -0.09) -- ASGC Construction L.L.C. places 41.7M Costain shares

        • -6.9% INPST.NA (InPost €17.10, -1.27) -- holder Advent sells 20M shares

        • -6.4% AEDAS.SM (AEDAS Homes €23.30, -1.60) -- Castlelake to sell its stake in Aedas Homes - Cinco Dias

        • -5.8% FDEV.LN (Frontier Developments £2.24, -0.14) -- reports FY EPS (55.6p) vs year-ago (53.6p)

        • -5.8% HUSQ.B.SS (Husqvarna SEK62.78, -3.90) -- announces that challenging market conditions continue to impact financial performance in Q3

        • -5.5% VIT.B.SS (Vitec Software Group SEK498.80, -29.20) -- placing

        • -4.7% JET2.LN (Jet2 £14.02, -0.69) -- shareholder Philip Meeson sells 5M shares

        • -4.2% SCR.FP (SCOR SE €19.05, -0.83) -- denies any M&A talks have taken place with Covea - Insurance Insider (post-close, 10-Sep)

        • -3.5% EPWN.LN (Epwin Group £0.96, -0.04) -- earnings

        • -3.2% DNLM.LN (Dunelm Group £11.96, -0.39) -- reports FY EPS 74.4p vs FactSet 73.9p [12 est, 72.5-75.7p]

        • -3.1% ORNBV.FH (Orion €46.79, -1.52) -- upgrades FY24 outlook amidst product sales and royalty income continuing to grow faster

        • -2.9% BRCK.LN (Brickability Group £0.64, -0.02) -- AGM statement

        • -1.9% PAF.LN (Pan African Resources $0.29, -0.01) -- earnings

        • -1.9% GMR.LN (Gaming Realms £0.37, -0.01) -- earnings

        • -1.7% TOP.DC (Topdanmark DKK370.60, -6.40) -- Sampo announces preliminary result of exchange offer to shareholders of Topdanmark

    • EU companies reporting tomorrow:

      • Earnings:

        • Benelux: Brederode (BREB.BB)

        • DACHs: Baloise Holding (BALN.SW), Santhera Pharmaceuticals (SANN.SW), DFV Deutsche Familienversicherung G (DFV.GR)

        • France: VusionGroup (VU.FP), Vetoquinol (VETO.FP), Innate Pharma (IPH.FP)

        • Nordics: Rusta (RUSTA.SS), Biovica International (BIOVIC.B.SS), Puuilo (PUUILO.FH)

        • Southern Europe: SeSa (SES.IM), Cembre (CMB.IM), SECO (IOT.IM), Toscana Aeroporti (TYA.IM), Antares Vision (AV.IM), Equita Group (EQUI.IM), Landi Renzo (LNDR.IM)

        • UK: Renishaw (RSW.LN), Spire Healthcare (SPI.LN), Kier Group (KIE.LN), Brooks MacDonald (BRK.LN), Keystone Law (KEYS.LN), Aquis Exchange (AQX.LN), Inspired (INSE.LN)

  • Data:

    • Economics:

      • UK Jul

        • Industrial Production (1.2%) y/y vs consensus (0.2%) and prior (1.4%)

        • Trade Balance (£20.00B) vs consensus (£18.00B) and prior (£18.89B)

        • Construction Output (1.6%) vs consensus (1.0%) and prior (1.7%)

    • Markets:

      • WTI Crude (Oct 24): +$0.80 or +1.22% to $66.55

      • €-$ (0.0006) or (0.05%) to 1.1015

      • £-$ (0.0055) or (0.42%) to 1.3025

      • €-£ +0.0033 to 0.8459

      • S&P 500 (1.12%)

      • Performance year-to-date

        • FTSE 100: +5.98%

        • DAX: +9.41%

        • CAC: (1.91%)

        • MIB: +9.30%

        • Stoxx 600: +6.06%

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