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StreetAccount Summary - EU Market Recap: FTSE 100 +0.20% to 8284.91, DAX +1.69% to 19238.36, CAC40 +2.33% to 7742.09, STOXX 600 +1.25% to 525.61

Sep 26 ,2024

  • Synopsis:

    • European equity markets closed firmer, with France and Germany closing near the session's best levels. Consumer products & services, basic resources and technology led outperforming sectors. Energy, personal care and telecom lagged.

    • Reuters reported that UK PM Starmer will hold talks next week with European Commission President von der Leyen in a bid to reset the relationship. Starmer said via social media he wants to reset the relationship with the bloc and make Brexit work. Note, Starmer has already held several meetings with European leaders ahead of next year's review of the post-Brexit trade deal agreed by former PM Johnson. Politico reported that the EU could modify its youth mobility scheme with the UK to make it more politically palatable to Starmer. Note, both Germany and France have called on Brussels to negotiation an asylum and migration deal with the UK as part of the reset. Political commentators have warned unless the UK relaxes its red lines there may be limited scope for a deal.

    • Reuters also reported France's new finance and budget ministers said on Wednesday they would prioritize spending cuts over tax increase to rein in fiscal shortfall. Finance Minister Arnaud highlighted everyone will share the burden, but firstly the effort must come from spending. Budget Minister Saint-Martin told lawmakers in the budget committee that hole in public finances worse than expected only a few days ago, with the deficit at risk of topping 6% of GDP, well above 5.1% government estimate in the spring.

    • SNB cut key rate by 25 bps to 1.00%, as expected. Said further cuts may be necessary in the coming quarters. ECB reportedly facing internal debates over October move, with dovish policymakers pushing for a cut in light of recent weak economic data (Reuters). Stance meeting resistance from hawks who prefer to wait for hard data. Yet, unexpected contraction in PMIs and sharper-than-anticipated slowdown in wage growth bolstered doves' arguments. Market indicators now suggest risk of inflation undershooting ECB's target for extended period. Traders increased their bets on October rate cut, with money markets now pricing in a 50-60% likelihood of a 25bps reduction.

    • On data front, early attention was on slightly better German GfK consumer confidence which comes amid a string of downbeat macro updates from Germany. Italian confidence softer than expected and Eurozone M3 money supply growth higher. Meanwhile, surveys from UK's REC and BRC indicate that Budget gloom is having a negative impact on overall confidence and may undermine economic activity. UK car production down for sixth month.

    • On the corporate front, ahead of its CMD, BASF (BAS.GR) announced it is planning dividends and share buybacks of at least €12B between 2025- 2028 and will divest its decorative paints business in Brazil whilst - still in Germany -- Peakload reported that RWE (RWE.GR) is understood to have drawn renewed interest from an activist investor. Evotec (EVT.GR) and Novo Nordisk (NOVO.B.DC) entered into technology development partnership to support next-generation cell therapies. In France, Ubisoft Entertainment (UBI.FP) issued a profit warning, whilst Sanofi (SAN.FP) guided estimate for ccy impact on Q3 sales between (3%)-(4%) and between (5.5%)-(6.5%) on Q3 business EPS. Sodexo (SW.FP) is considering a possible acquisition of Aramark. In the Nordics, Telia (TELIA.SS) presented its financial ambitions for the 2025-27 period and H&M Hennes & Mauritz (HM.B.SS) released Q3 earnings and announced a buyback.

  • Digest:

    • Sectors - STOXX Europe 600:

      • Outperformers:

        • Consumer Products and Services +6.47%, Basic Resources +4.33%, Technology +3.03%, Banks +2.42%, Autos & Parts +2.28%, Ind Goods & Svcs +1.61%

      • Underperformers:

        • Energy(3.03%), Personal Care Drug and Grocery Stores (0.31%), Telecom (0.27%), Health Care (0.08%), Media +0.19%, Utilities +0.26%, Insurance +0.62%, Travel & Leisure +0.80%, Chemicals +0.86%, Retail +0.87%, Real Estate +1.08%, Construct & Mtls +1.13%, Financial Svcs +1.25%

    • Macro:

      • France:

        • Stepping into budget crisis, French ministers pledge spending cuts - Reuters

      • Germany:

        • German consumer sentiment stays at low level in October - Reuters

      • UK:

        • Starmer to meet von der Leyen in Brussels, kickstarting UK-EU reset talks - FT, Reuters

        • Reeves pushes for OBR to upgrade growth forecasts amid planning reforms - Guardian

        • UK consumer sentiment sinks on fiscal worries, trade body says- Reuters

        • UK employers embrace pay transparency and may include salary ranges in job listings by 2026 - Bloomberg

    • Company news:

      • Notable Gainers

        • +23.5% HKFOODS.FH (HKFoods €0.72, +0.14) -- raises FY guidance

        • +18.7% ITAB.SS (ITAB Shop Concept SEK29.90, +4.70) --

          • to acquire HMY for a cash consideration of ~ SEK 3.61B (€320M)

          • completes directed issue of 38.2M shares at SEK22.70/share to raise SEK867M

        • +14.9% CEC.GR (CECONOMY €3.23, +0.42) -- Kepler Cheuvreux upgrade

        • +12.1% UHR.SW (Swatch Group CHF175.75, +18.95) -- Swatch Group CEO Nick Hayek says considering withdrawing company from the stock market -- Bilanz

        • +11.9% FNAC.FP (Fnac Darty €30.30, +3.25) -- Kepler Cheuvreux upgrade

        • +11.5% VBK.GR (Verbio €17.89, +1.84) -- Q4 earnings

        • +11.1% WOSG.LN (Watches of Switzerland Group £4.69, +0.47) -- Deutsche Numis upgrade

        • +10.8% DLAR.LN (De La Rue £0.93, +0.09) -- trading and strategic update

        • +10.7% OPM.FP (OPmobility €8.58, +0.83) -- initiated overweight at Morgan Stanley

        • +8.5% S30.FP (Solutions 30 €1.51, +0.12) -- 2026 roadmap

        • +7.3% GGP.LN (Greatland Gold £0.07, -0.00) -- Telfer restarts processing operations

        • +6.9% AYV.FP (Ayvens €6.29, +0.40) -- initiated buy at Kepler Cheuvreux

        • +6.9% CBK.GR (Commerzbank €16.32, +1.06) -- strategy update presentation

        • +6.6% TNIE.GR (tonies €6.80, +0.42) -- initiated outperform at Oddo

        • +5.1% METSO.FH (Metso Corp. €9.32, +0.46) -- acquires Diamond Z and Screen Machine Industries

        • +5.0% BERG.B.SS (Bergman & Beving SEK295.00, +14.00) -- initiated buy at Nordea

        • +5.0% CVSG.LN (CVS Group £11.64, +0.56) -- FY earnings

        • +4.9% IPO.LN (IP Group £0.50, +0.02) -- notes Visa's (V) acquisition of portfolio company Featurespace

        • +4.7% THULE.SS (Thule Group SEK310.00, +13.80) -- ABG Sundal Collier upgrade

        • +4.7% DGE.LN (Diageo £26.15, +1.17) -- trading update

        • +4.4% GBT.FP (Guerbet €37.90, +1.60) -- H1 earnings

        • +3.8% BMW.GR (Bayerische Motoren Werke €78.64, +2.88) -- UK Aug car manufacturing (8.4%) y/y to 41,271 units -- SMMT

        • +3.6% S92.GR (SMA Solar Technology €17.71, +0.61) -- restructuring and transformation program

        • +3.6% CLA.B.SS (Cloetta SEK24.16, +0.84) -- puts investment in greenfield plant on hold and initiates reassessment of the plant and options

        • +3.5% EVT.GR (Evotec €6.11, +0.21) -- and Novo Nordisk enter technology development partnership to support next-generation cell therapies

        • +3.3% FACC.AV (FACC €6.53, +0.21) -- Kepler Cheuvreux upgrade

        • +3.2% PCO.PW (Pepco Group PLN19.82, +0.62) -- trading update

        • +2.9% RWE.GR (RWE €33.03, +0.93) -- UBS comments on Peakload report RWE is understood to have drawn renewed interest from an activist investor

        • +2.7% MOWI.NO (Mowi NOK187.00, +5.00) -- CMD update

      • Notable Decliners

        • -29.3% TRLS.LN (Trellus Health £0.01, -0.00) -- H1 earnings

        • -25.1% IGR.LN (IG Design Group £1.28, -0.43) -- trading update; lowers FY guidance

        • -24.2% NOD.NO (Nordic Semiconductor NOK107.05, -34.15) -- CMD update

        • -22.1% FLO.LN (Flowtech Fluidpower £0.87, -0.24) -- H1 earnings

        • -19.6% VID.LN (Videndum £2.25, -0.55) -- H1 earnings; lowers FY guidance

        • -18.6% AGL.LN (ANGLE £0.09, -0.02) -- H1 earnings

        • -13.4% UBI.FP (Ubisoft Entertainment €9.92, -1.53) --

          • updates financial targets for FY2024-25

          • Deutsche Bank and Gilbert Dupont downgrades

        • -13.3% OPTOMED.FH (Optomed €4.54, -0.70) -- lowers FY guidance

        • -9.7% SNG.LN (Synairgen £0.04, -0.00) -- H1 earnings

        • -9.6% ALNOV.FP (Novacyt €0.75, -0.08) -- H1 earnings

        • -9.2% SDI.LN (SDI Group £0.54, -0.05) -- trading update

        • -5.0% ODL.NO (Odfjell Drilling NOK49.60, -2.60) -- holder Odfjell Partners Holding completes sale of 23.4M shares at NOK50/share

        • -4.6% SHEL.LN (Shell Plc £24.16, -1.17) -- Oddo downgrades

        • -4.6% HM.B.SS (H&M Hennes & Mauritz SEK173.00, -8.35) -- Q3 earnings

        • -3.6% SW.FP (Sodexo €75.95, -2.80) -- Sodexo considering a possible acquisition of Aramark - Bloomberg, citing people familiar with the matter

        • -3.4% ALICA.FP (ICAPE Holding €9.10, -0.32) -- H1 earnings

        • -3.1% IIA.AV (Immofinanz €17.78, -0.58) -- share purchase agreements to acquire total of 28.2M shares in S IMMO

        • -2.2% EBQ.LN (Ebiquity £0.23, -0.01) --

          • H1 earnings

          • reinstated buy at Shore Capital Stockbrokers

        • -2.1% KTA.GR (Knaus Tabbert €30.40, -0.65) -- Hauck & Aufhäuser downgrade

        • -2.0% BAVA.DC (Bavarian Nordic A/S DKK236.60, -4.90) -- agreement with UNICEF for the supply of 1M doses of the MVA-BN mpox vaccine; raises FY guidance

        • -1.8% HPUR.NO (Hexagon Purus NOK9.30, -0.17) -- and Mitsui & Co. Ltd. agree to amend certain rights to convert or dispose of convertible bonds

    • EU companies reporting tomorrow:

      • Earnings: Equasens (EQS.FP), Piraeus Port Authority (PPA.GA), Ceres Power (CWR.LN), BayWa (BYW6.GR), Pyrum Innovations (PYRUM.NO), Bastogi (B.IM)

      • CMD/events: Vossloh (VOS.GR)

  • Data:

    • Economics:

      • Germany Oct GfK consumer confidence (21.2) vs consensus (21.5), prior revised (21.9) from (22.0)

      • Norway Aug unemployment rate 4.0% vs consensus 3.9%, prior revised 3.8% from 3.9%

      • Sweden Aug trade balance (SEK5.3B) vs consensus SEK5.9B, prior revised SEK6.6B from SEK6.5B

      • Spain Aug retail sales +2.3% y/y vs consensus +1.9%, prior revised +1.1% from +1.0%

      • Italy Sep

        • Business confidence 86.7 vs consensus 87.1, prior revised to 87 from 87.1

        • Consumer confidence 98.3 vs consensus 96.0, prior 96.1

      • Eurozone Aug M3 money supply +2.9% y/y vs consensus +2.6%, prior +2.3%

    • Markets:

      • WTI Crude (Nov 24): ($1.51) or (2.17%) to $68.18

      • €-$ +0.0047 or +0.42% to 1.1180

      • £-$ +0.0091 or +0.68% to 1.3414

      • €-£ (0.0021) to 0.8335

      • S&P 500 +0.19%

      • Performance year-to-date

        • FTSE 100: +7.13%

        • DAX: +14.84%

        • CAC: +2.64%

        • MIB: +13.37%

        • Stoxx 600: +9.73%

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