Sep 13 ,2024
Synopsis:
European equity markets closed higher. Spain +1.2%, Denmark and Greece +0.9% lead outperformers, whilst Italy +0.2% and France +0.4% lead underperformers.
After ECB cut rates by 25-bps on Thursday, attention shifting back to Fed decision. Press reports highlighted will be close call between move of 25-bps or 50-bps. Former Fed President Dudley said at event overnight that there is a strong case for 50-bp cut. BoE seen keeping policy unchanged next week with next cut more likely in November. Sell-side economists also anticipate potential for a December move as well.
Quiet macro calendar. Eurozone industrial production falls in July, as expected. Final CPI print from France lower than flash at 1.8% y/y. ECB's Nagel said core inflation moving in the right direction and added rate cut was justified with data. ECB's Simkus said additional reductions to be determined by data and noted uncertainty regarding services inflation.
Latest developments over EU-China auto trade tariff spat revolves around European Commission rejecting offers from Chinese electric vehicle (EVs) makers to adjust their prices, aiming to avoid steep tariffs ahead of crucial talks between Brussels and Beijing. Preliminary University of Michigan consumer sentiment (and inflation expectations) highlight the US economic calendar today.
Light on the corporate front. Worldline (WLN.FP) adjusts FY24 guidance downward citing slow trading conditions and specific performance issues in the Pacific business; CEO also to step down. Konecranes (KCR.FH) raised FY sales guidance. In other corporate developments, BAE Systems (BA.LN) wins $440M contract with US Army. Elsewhere, ams OSRAM (AMS.SW) announced private placement of €200M 10.5% senior notes due 2029 replacing short-term financing facilities.
In notable M&A deals, DSV A/S (DSV.DC) signed an agreement with Deutsche Bahn (DBK.GR) to acquire 100% of Schenker AG +SCH.GR in an all-cash transaction worth €14.3B (~DKK 107B) on an EV basis. National Grid (NG.LN) announces sale of Electricity System Operator for an enterprise value of £630M. Flutter Entertainment (FLTR.LN) acquires initial 56% stake in NSX Group, a Brazilian operator of the Betnacional brand for cash consideration of ~$350M.
Looking ahead to Monday's calendar (see - Europe Week Ahead: 16-Sep to 20-Sep attached) Group Holdings (PHNX.LN), Keywords Studios (KWS.LN), M.P. Evans Group (MPE.LN), Wilmington (WIL.LN), Hoffmann Green Cement Technologies (ALHGR.FP), Meyer Burger Technology (MBTN.SW), and Addex Therapeutics (ADXN.SW) will be among other names to update investors, whilst the macro-calendar releases will include Italy Aug final CPI, Jul trade balance, Eurozone Jul trade balance, Switzerland Aug PPI, UK Sep house price index - Rightmove, Norway Aug trade balance.
Digest:
Sectors - STOXX Europe 600:
Outperformers:
Retail +1.88%, Autos & Parts +1.60%, Real Estate +1.40%, Construct & Mtls +1.39%, Basic Resources +1.31%, Energy+1.23%, Financial Svcs +1.22%, Technology +1.05%, Telecom +1.00%, Insurance +0.83%, Ind Goods & Svcs +0.78%,
Underperformers:
Food, Beverage and Tobacco (0.18%), Personal Care Drug and Grocery Stores +0.25%, Health Care +0.38%, Consumer Products and Services +0.40%, Utilities +0.57%, Media +0.57%, Travel & Leisure +0.62%, Banks +0.71%,
Macro/Peripheral markets:
Geopolitics
Central banks
EU
Russian attacks are breaking EU electricity market, Greece warns - FT
UK
Germany
Germany's Scholz wants new EU anti-deforestation law delayed- Politico
Trade unions reject offer of 10.8 percent more salary - Handelsblatt
Budget week in the Bundestag ended - committee now clarifies details - Handelsblatt
Germany's Scholz seeks Central Asian energy ties in shadow of Ukraine war - Reuters
Spain
Market Darling Spain Has Chance of Moody's Rating Upgrade - Bloomberg
Sweden
Swedish Government to Cut Marginal Tax Rate for Top Earners - Bloomberg
Hungary
Orban confident EU will reimburse Hungary's border protection costs - Reuters
Company news:
Trading Higher:
+74.6% TETY.SS (Tethys Oil SEK54.20, +23.15) -- board recommends shareholders to accept cash offer from Roc Oil Company Pty Limited at a price of SEK 58.70/sh
+10.6% PRT.IM (Esprinet €5.80, +0.56) -- H1 earnings; Intesa Sanpaolo upgrade
+5.7% DUE.GR (Duerr €19.41, +1.05) -- HSBC and Kepler Cheuvreux upgrade
+5.7% CHEMM.DC (ChemoMetec DKK454.00, +24.40) -- Nordea downgrade
+5.1% BORR.NO (Borr Drilling NOK59.25, +2.85) -- Evercore ISI upgrade
+4.7% KCR.FH (Konecranes €59.75, +2.70) -- upgrades 2024 sales guidance
+4.3% KUD.SW (Kudelski CHF1.45, +0.06) -- closes previously announced sale of SKIDATA business to ASSA ABLOY
+3.8% STMN.SW (Straumann Holding CHF123.40, +4.50) -- HSBC upgrade
+3.6% HUSQ.B.SS (Husqvarna SEK66.34, +2.28) -- ABG Sundal Collier upgrade
+3.1% GN.DC (GN Store Nord DKK164.50, +5.00) -- HSBC upgrade
+2.8% FRE.GR (Fresenius €34.65, +0.96) -- JPMorgan upgrade
+2.4% DEMANT.DC (Demant DKK284.80, +6.80) -- HSBC upgrade
+2.3% BAS.GR (BASF SE €43.68, +0.98) -- Jefferies upgrade
Trading Lower:
-61.1% MOB-OME (11.23, -17.63) -- lowers expectations on primary endpoint in ongoing phase 3 trial for MOB-015 following data in a subset of patients
-14.6% DUST.SS (Dustin Group SEK8.96, -1.53) -- Q4 update
-14.0% WLN.FP (Worldline €7.25, -1.18) -- CEO to step down; adjusts FY24 guidance downward
-10.6% VLA.FP (Valneva €2.81, -0.33) -- places 23M shares at €2.66/each
-5.7% CPR.IM (Davide Campari-Milano €7.79, -0.47) -- CEO comments
-3.1% CYAD.BB (Celyad Oncology €0.23, -0.01) -- H1 earnings
-2.1% SECU.B.SS (Securitas SEK120.95, -2.55) -- sets provision of SEK551M (~$53M) related to U.S. Government investigation in Paragon Systems
-2.1% KESKOB.FH (Kesko €17.90, -0.39) -- Aug sales
EU companies reporting Monday:
Earnings:
DACHs: Meyer Burger Technology (MBTN.SW), Addex Therapeutics (ADXN.SW)
France: Hoffmann Green Cement Technologies (ALHGR.FP)
Southern Europe: Kri-Kri (KRI.GA), Toscana Aeroporti (TYA.IM)
UK: Phoenix Group Holdings (PHNX.LN), Keywords Studios (KWS.LN), M.P. Evans Group (MPE.LN), Wilmington (WIL.LN)
Trading Update: H&M Hennes & Mauritz (HM.B.SS)
Traffic: Aeroports de Paris ADP (ADP.FP)
CMG/events: AstraZeneca (AZN) Meet the Management Event at ESMO at 19:00CEST
Data:
Economics:
France Aug CPI +1.8% y/y vs preliminary +1.9%; +0.5% m/m vs preliminary +0.6%
Eurozone Jul Industrial Production (2.2%) y/y vs consensus (2.7%) and prior revised (4.1%) from (3.9%); (0.3%) m/m vs consensus (0.3%) and prior (0.1%)
Markets:
WTI Crude (Oct 24): +$0.66 or +0.96% to $69.63
€-$ +0.0011 or +0.10% to 1.1085
£-$ +0.0016 or +0.12% to 1.3139
€-£ (0.0002) to 0.8436
S&P 500 +0.56%
Performance year-to-date
FTSE 100: +6.98%
DAX: +11.63%
CAC: (1.03%)
MIB: +10.48%
Stoxx 600: +7.72%
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