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StreetAccount Summary - EU Market Recap: FTSE 100 (0.17%) to 8268.70, DAX (0.41%) to 18918.50, CAC40 (0.50%) to 7565.62, STOXX 600 (0.11%) to 519.14

Sep 25 ,2024

  • Synopsis:

    • European equity markets closed the session mostly lower, with particular weakness in Energy (1.7%), Banks (0.8%) and Autos&Parts (1.3%) sectors. Regionally, France (0.5%) and Norway (0.6%) were the main laggards, while Switzerland +0.8%, Sweden +0.8%, Denmark +0.8%, Portugal +0.5% among those that bucked the trend. Oil prices were lower (WTI Crude (1.10%) to $70.77/bbl) while gold was +0.2% higher at $2682.80/oz. In the US, nothing particularly incremental from a narrative perspective as market seems to be in waiting mode for August core PCE inflation on Friday, September NFP next Friday and the start of Q3 earnings season. Path of least resistance still seems to be higher on the combination of a new Fed easing cycle and soft-landing narrative.

    • Focus on central bank policy in Europe. Sweden's Riksbank cut key rate by 25 bps to 3.25% as expected and said 50 bps cut possible at one of its remaining meetings this year. Recent weakness in Eurozone data raised odds of October ECB rate cut. Dutch central bank chief Knot sees gradual rate cuts through first half of 2025. BoE's Greene says indicators of inflationary persistence moving in the right direction. Follows cautious remarks from Governor Bailey on Tuesday.

    • Limited European macro data of note. French consumer confidence increased for the third consecutive month in September. KPMG revised up its UK growth forecasts, but cautious on outlook. OECD also upgraded the UK's growth forecast. France's Villeroy called for realism in fiscal debate.

    • Among European stocks in focus today, Flutter Entertainment (FLTR.LN) shares up nearly 7% as it introduced medium-term 2027 guidance and the authorization of an up to $5B share repurchase program. Rentokil (RTO.LN) led FTSE 100 gainers as it appointed Trian Fund Management's Brian Baldwin to its board. Rightmove (RMV.LN) rejected the third unsolicited proposal from REA Group. Sainsbury (SBRY.LN) sold its ATM business to NoteMachine. DFS Furniture (DFS.LN) reported FY results, with shares closing up 3.5%. London Stock Exchange Group (LESG.LN) reportedly considering the sale of its 4.9% stake in Euroclear

    • Looking ahead to tomorrow: SNB interest rate decision at 9:30CET with a 25 bps cut in the benchmark interest rate to 1.00% generally expected. BOE's Khan speech at 9:30BST at BofA Financials CEO conf. Elsewhere, EU internal market and industry ministers meeting. UK Aug car production are due to be released. On the corporate front, earnings/updates due from the likes of H&M (HM.B.SS), CVS Group (CVSG.LN), Halma (HLMA.LN) and Pennon Group (PNN.LN). BASF (BAS.GR) among a few companies holding capital markets days tomorrow. Recall recent report saying BASF may seek crop listing in few years and may also signal an openness to consider divesting or bringing in partners for portions of its coatings business.

  • Digest:

    • Sectors - STOXX Europe 600:

      • Outperformers:

        • Personal Care Drug and Grocery Stores +0.58%, Consumer Products and Services +0.55%, Ind Goods & Svcs +0.51%, Travel & Leisure +0.45%, Health Care +0.31%, Construct & Mtls +0.27%, Technology +0.24%, Chemicals +0.13%, Basic Resources +0.11%, Telecom +0.03%

      • Underperformers:

        • Energy(1.74%), Autos & Parts (1.29%), Banks (0.79%), Retail (0.72%), Food, Beverage and Tobacco (0.58%), Insurance (0.45%), Real Estate (0.43%), Financial Svcs (0.36%), Utilities (0.29%)

    • Macro:

      • UK

        • OECD upgrades UK's growth forecast -- London Times; OECD boosts Rachel Reeves with call to rewrite 'short-termist' fiscal rules -- FT

        • KPMG UK Economy forecast; UK inflation could rise to 3% in early 2025; UK GDP growth projected to grow by 1.2% in 2025 -- link

        • Starmer struggles to fix morale at 'weird' Labour conference -- FT

        • Labour conference votes to reverse cut to winter fuel allowance in embarrassing blow to Starmer -- Sky News

      • France

        • France under pressure to deliver 'realistic' budget plans -- Reuters

        • French growth should be 1.1% in 2024, finance minister says -- Reuters

      • Germany

      • Austria

        • Austria's polarising far-right leader bids to become chancellor -- Reuters

      • Sweden

        • Riksbank cuts rates for a third time as economic concerns build -- ING

      • Switzerland

        • SNB Rate Cliffhanger Will Be Thomas Jordan's Farewell -- Bloomberg

    • Company news:

      • Notable Gainers

        • +11.7% VALMT.FH (Valmet €28.16, +2.96) -- €1B+ order; appoints new SVP Strategy

        • +10.1% LECN.SW (Leclanché CHF0.18, +0.02) -- update on strategic partnership with Pinnacle International Capital

        • +8.3% STX.LN (Shield Therapeutics £0.04, -0.00) -- study results; achieves €1M development milestones

        • +7.3% OPG.LN (OPG Power Ventures £0.11, +0.01) -- FY earnings

        • +6.9% FLTR.LN (Flutter Entertainment £183.80, +11.85) -- sees adj EBITDA margin expansion of 700 bps by 2027 to ~25%; buyback of up to $5B to launch following Q3 -- CMD

        • +6.6% DFS.LN (DFS Furniture £1.22, +0.08) -- reports FY underlying EPS from cont ops 1.5p vs FactSet 3.2p [3 est, 3.0-3.3p]; no final divi and FY25 trading to date is in line with the board's expectations

        • +6.0% AF.FP (Air France-KLM €8.97, +0.51) -- JPMorgan upgrade

        • +5.8% ORNBV.FH (Orion €49.75, +2.74) -- Jefferies upgrade

        • +5.8% HELN.SW (Helvetia Holding CHF143.80, +7.90) -- initiated overweight at JPMorgan

        • +5.6% MPCC.NO (MPC Container Ships NOK23.35, +1.24) -- new 24-26 month charter contracts worth ~$200M in revenue backlog

        • +4.5% RTO.LN (Rentokil Initial £3.77, +0.16) -- appoints Trian Fund Management partner as new Non-Executive Director

        • +3.9% BAVA.DC (Bavarian Nordic A/S DKK241.50, +9.00) -- $63M order from US Government

        • +3.5% INSTAL.SS (Instalco SEK44.74, +1.50) -- NOK100M project award

        • +2.7% HEXA.B.SS (Hexagon SEK104.30, +2.70) -- initiated buy at Stifel (timing uncertain)

        • +1.7% DIA.LN (Dialight £1.78, +0.03) -- Sanmina litigation update

        • +1.6% UCG.IM (UniCredit €37.83, +0.61) -- CEO expects FY net profit at "over €9.0B" vs prior guidance at "above €8.5B" and FactSet €9.31B

        • +1.1% SBRY.LN (J Sainsbury £2.96, +0.03) -- sells ATM business to NoteMachine

      • Notable Decliners

        • -15.2% CRTA.LN (Cirata £0.25, -0.04) -- CFO steps down

        • -4.9% GETI.B.SS (Getinge SEK218.70, -11.20) -- certificate for HLS and PLS consumables reinstated; TÜV SÜD has also announced that the temporary suspension of Getinge's Cardiosave Intra-Aortic Balloon Pump, effective from March 2024, will be extended until 1-Jul-25

        • -4.8% INDI.LN (Indus Gas £0.12, -0.01) -- FY earnings

        • -4.6% MELE.BB (Melexis €72.45, -3.50) -- Kepler Cheuvreux downgrade

        • -2.9% OTB.LN (On The Beach Group £1.39, -0.04) -- FY24 Pre-Close Trading Update: Adj PBT in line with market expectations; Winter 24 volumes currently 34% ahead of prior year

        • -2.7% CANTA.SS (Cantargia SEK3.34, -0.09) -- study results

        • -2.4% SAP.GR (SAP €201.85, -5.05) -- US investigating SAP and Carahsoft Technology in regards to price fixing - Bloomberg

        • -1.8% EQT.SS (EQT AB SEK342.60, -6.10) -- considering sale of a stake in WS Audiology - Bloomberg

        • -1.3% ORA.FP (Orange €10.69, -0.14) -- plans delisting from the NYSE, deregister with the SEC

        • -0.8% ENENTO.FH (Enento Group €19.92, -0.17) -- Danske Bank downgrade; SEB downgrade

    • EU companies reporting tomorrow:

      • Earnings:

        • Benelux: Fluxys Belgium (FLUX.BB), Mithra Pharmaceuticals (MITRA.BB)

        • DACHs: KWS SAAT & Co. (KWS.GR), Verbio (VBK.GR), PharmaSGP (PSG.GR)

        • France: Marie Brizard Wine & Spirits (MBWS.FP), Cegedim (CGM.FP), OSE Immunotherapeutics (OSE.FP), ICAPE (ALICA.FP), Aelis Farma (AELIS.FP), Novacyt (ALNOV.FP)

        • Nordics: H&M Hennes & Mauritz (HM.B.SS)

        • Southern Europe: Athens Water Supply & Sewage Co. (EYDAP.GA)

        • UK/Ireland: CVS Group (CVSG.LN), accesso Technology (ACSO.LN), Hansard Global (HSD.LN), ANGLE (AGL.LN), Ebiquity (EBQ.LN)

      • Trading Update: Halma (HLMA.LN), Pennon Group (PNN.LN), Trigano (TRI.FP)

      • CMD/events: BASF (BAS.GR), Telia Co. (TELIA.SS), Nexans (NEX.FP) Climate Day, KBC Group (KBC.BB) Annual ESG FI, SFC Energy (F3C.GR), Kemira (KEMIRA.FH), Robert Walters (RWA.LN), Agronomics (ANIC.LN)

  • Data:

    • Economics:

      • France Sep Consumer Confidence 95 vs consensus 92 and prior revised 93 from 92

      • Spain Aug PPI (1.3%) y/y vs consensus (2.0%) and prior revised (1.6%) from (1.4%)

      • Sweden Aug PPI +1.2% y/y vs consensus +3.6% and prior (0.1%); +0.6% m/m vs consensus +0.6% and prior (1.4%)

    • Markets:

      • WTI Crude (Nov 24): ($0.79) or (1.10%) to $70.77

      • €-$ (0.0021) or (0.19%) to 1.1160

      • £-$ (0.0061) or (0.45%) to 1.3352

      • €-£ +0.0023 to 0.8359

      • S&P 500 +0.03%

      • Performance year-to-date

        • FTSE 100: +6.92%

        • DAX: +12.94%

        • CAC: +0.30%

        • MIB: +11.48%

        • Stoxx 600: +8.38%

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