Sep 27 ,2024
Synopsis:
European equity markets finished higher. Autos/Parts, Chemicals and Consumer Products/Services lead; Telecom, Construction & Materials, Health Care underperform. US equities mostly higher in Friday midday trading. Treasuries firmer with yields a bit higher WTD. Dollar index down 0.1%; yen strength the story in FX on news Shigeru Ishiba will be next PM (news has also weighed heavily on Nikkei futures after index rallied 2%+ on Friday). Gold down 0.8%. Bitcoin futures up 2.5%. WTI crude up 0.1% and off 5%+ for the week.
On macro calendar, French and Spanish CPI data missed expectations in September. ECB survey showed one-year and three-year CPI outlook dipped. It has heightened ECB rate cut bets for October and weighed on Eurozone bond yields. BoE also seen easing in November. German unemployment came in higher than expected, showing some cooling of the labor market. CBI survey shows bounce in UK retail sales in September. Press continues to discuss likelihood of UK Chancellor Reeves changing fiscal rules to provide space for more investment.
In corporate news, LVMH (MC.FP), through a special purpose vehicle, purchased a 10% stake in Double R (the investment vehicle controlled by Ruffini Partecipazioni Holding) which owns a 15.8% direct stake in Moncler (MONC.IM); still in France, Renault Group (RNO.FP) sold to Nissan ~195.5M Nissan shares for €494M, with the sale resulting in a capital loss on disposal of ~€1.10B which will impact the net income; still in the automotive sector, Forvia (FRVIA.FP) trimmed 2024 sales, operating margin and Net Cash Flow guidance and HELLA GmbH & Co. (HLE.GR) lowered its FY Currency and portfolio-adjusted sales guidance. In the Nordics, Doro (DORO.SS) board recommended to accept the SEK34/sh offer from Xplora Technologies AS (XPLRA.NO) and Pyrum Innovations (PYRUM.NO) reported H1. Further in M&A headlines, REA Group (REA.AU) made fourth proposal for Rightmove (RMV.LN), raising total offer value to 781p/sh. Rightmove's board said it would consider the latest unsolicited, non-binding and highly conditional proposal from REA Group and urged shareholders to take no action in the meantime.
The week ahead sees EU's von der Leyen host UK PM Starmer, ECB's Lagarde before EU parliamentary committee, Sep manufacturing/services PMIs from across the region, Germany Sep prelim CPI, Q2 final GDPs from across the region as well as earnings from Tesco (TSCO.LN), JD Sports Fashion (JD.LN) and KION GROUP (KGX.GR). Learning Technologies Group (LTG.LN) received possible cash offer from General Atlantic to acquire the entire issued and to be issued share capital for 100p/sh; board to recommend offer.
Digest:
Sectors - STOXX Europe 600:
Outperformers:
Chemicals +2.62%, Consumer Products and Services +2.13%, Autos & Parts +2.05%, Food, Beverage and Tobacco +1.22%, Technology +1.22%, Travel & Leisure +1.16%, Personal Care Drug and Grocery Stores +0.92%, Oil & Gas+0.69%, Basic Resources +0.68%, Financial Svcs +0.49%
Underperformers:
Telecom (0.29%), Construct & Mtls (0.24%), Health Care (0.21%), Retail (0.17%), Banks (0.05%), Media (0.02%), Ind Goods & Svcs +0.04%, Insurance +0.28%, Utilities +0.34%
Macro:
ECB
Schnabel signals growing concern of Eurozone economic stagnation - Bloomberg
UK:
Chancellor Reeves hopes for £50B windfall with change of fiscal rules - London Times
Gilt investors urge caution as Reeves eyes expanded borrowing for investment - FT
France:
New government is fragile but don't write it off just yet - Reuters
Peripheral markets:
Austria:
Election result could complicate EU's Ukraine war policy - Responsible Statecraft
Italy:
Meloni targets Italy deficit at 2.8% by 2026 to please Brussels - Bloomberg
Ireland:
Aug number of mortgages (12.5%) m/m, +2.6% y/y, value (13.1%) m/m, +7.4% y/y -- Banking and Payments Federation Ireland release
Company news:
Notable Gainers
+199.6% ALQGC.FP (Quantum Genomics €0.07, +0.05) -- files declaration of cessation of payment today
+36.2% DORO.SS (Doro SEK33.50, +8.90) -- board recommends shareholders accept public tender offer from Xplora Technologies AS
+28.2% LTG.LN (Learning Technologies Group £0.96, +0.21) -- receives possible cash offer from General Atlantic to acquire the entire issued and to be issued share capital for 100p/LTG share; board to recommend offer
+26.6% CWR.LN (Ceres Power Holdings £2.51, +0.53) -- earnings
+23.3% ASAI.LN (ASA International Group £0.68, +0.13) -- earnings
+11.1% FRVIA.FP (Forvia €9.81, +0.98) -- guidance update
+10.9% MONC.IM (Moncler €57.88, +5.68) -- LVMH (MC.FP) acquires 10% stake in Double R; terms undisclosed
+10.0% MOLN.SW (Molecular Partners CHF4.40, +0.40) -- upcoming presentation
+8.6% 4C.SS (4C Group SEK17.00, +1.35) -- contract
+7.8% VOW.NO (Vow ASA NOK2.91, +0.21) -- updates on Fully Underwritten Rights Issue
+7.2% XBRANE.SS (Xbrane Biopharma SEK0.19, +0.01) -- positive feedback from FDA on proposed clinical development plan of its Opdivo biosimilar candidate Xdivane
+6.8% BIG.LN (Big Technologies £1.26, +0.08) -- buyback; Peel Hunt upgrade
+6.7% CWK.LN (Cranswick £50.00, +3.15) -- trading update; Peel Hunt upgrade
+5.1% VTSC.GR (Vitesco Technologies Group €52.60, +2.55) -- expects merger into Schaeffler AG to become effective on 1-Oct-24
+4.5% SHA.GR (Schaeffler €4.61, +0.20) -- Christophe Hannequin to succeed Claus Bauer as CFO next year; Vitesco Technologies Group expects merger into Schaeffler AG to become effective on 1-Oct-24
+3.8% EYAPS.GA (Thessaloniki Water & Sewage Co. €3.28, +0.12) -- earnings
+3.7% MC.FP (LVMH Moet Hennessy Louis Vuitton €703.10, +24.90) -- acquires 10% stake in Double R; terms undisclosed
+3.6% RNO.FP (Renault €41.35, +1.44) -- sold to Nissan ~195.5M Nissan shares for €494M; to result in capital loss on disposal of ~€1.10B which will impact the net income
+3.1% ENEA.SS (Enea AB SEK88.70, +2.70) -- contract
+2.8% SECT.B.SS (Sectra SEK275.60, +7.60) -- contract
+2.7% PREC.SS (Precise Biometrics SEK3.74, +0.10) -- cooperation agreement
+2.7% PRTC.LN (PureTech Health £1.56, +0.04) -- milestone payment
Notable Decliners
-24.7% HUM.LN (Hummingbird Resources £0.07, -0.02) -- financing, operational & strategic review
-11.4% NKR.NO (Nekkar NOK9.30, -1.20) -- share block sale by holder
-5.0% DIB.IM (Digital Bros €8.65, -0.45) -- earnings
-4.8% SOLG.LN (SolGold £0.10, -0.01) -- earnings
-4.6% WAGA.FP (Waga Energy €14.76, -0.70) -- commissions gas unit
-3.1% CGM.FP (Cegedim €12.30, -0.40) -- earnings
-1.4% RAY.B.SS (RaySearch Laboratories SEK150.60, -2.20) -- founder and CEO Johan Löf sold 150K Class B shares on 24-Sep-24
EU companies reporting Monday 30-Sep:
Earnings:
Benelux: Hyloris Pharmaceuticals (HYL.BB)
DACHs: Katek (KTEK.GR), Varta (VAR1.GR), Leclanche (LECN.SW), Addex Therapeutics (ADXN.SW)
France: Kaufman & Broad (KOF.FP), Waga Energy (WAGA.FP), Afyren (ALAFY.FP), McPhy Energy (ALMCP.FP), AB Science (AB.FP)
Southern Europe: Solaria Energia (SLR.SM), GPI (GPI.IM)
UK: Playtech (PTEC.LN), Alliance Pharma (APH.LN), Avacta Group (AVCT.LN), Bango (BGO.LN), Flowtech Fluidpower (FLO.LN), Frenkel Topping (FEN.LN), Likewise Group (LIKE.LN)
Trading Update: KION GROUP (KGX.GR)
CMD/events: Roche's (ROG.SW) Pharma Day, Vivoryon Therapeutics (VVY.NA) Virtual Kidney Disease KOL
Data:
Economics:
Eurozone Sep Economic Sentiment Indicator 96.2 vs consensus 96.5 and prior revised 96.5 from 96.6
Consumer Confidence (12.9) vs preliminary (12.9)
Services Sentiment Indicator 6.7 vs consensus 5.6 and prior revised 6.4 from 6.3
UK Sep CBI Distributive Trades 4 vs consensus (19) and prior (27)
Germany Sep Unemployment Change +17K vs cons +12K and prior revised +4K from +2K
Unemployment Rate 6.0% vs consensus 6.0% and prior 6.0%
France
Sep Prelim CPI +1.2% y/y vs cons +1.6% and prior +1.8%; (1.2%) m/m vs cons (0.7%) and prior +0.5%
EU Harmonised: +1.5% y/y vs cons +1.9% and prior +2.2%; (1.2%) m/m vs cons (0.8%) and prior +0.6%
Aug Consumer Goods Spending +0.2% m/m vs 0.0% and prior revised +0.2% from +0.3%
Aug PPI (6.3%) y/y vs cons (6.4%) and prior revised (5.7%) from (5.4%); +0.2% m/m vs cons (0.2%) and prior revised +0.3% from +0.2%
Italy Aug PPI (0.8%) y/y vs cons (0.5%) and prior (1.1%); +0.7% m/m vs cons 0.0% and prior +1.3%
Spain
Sep Prelim CPI +1.5% y/y vs cons +1.9% and prior +2.3%; (0.6%) m/m vs cons (0.1%) and prior 0.0%
EU Harmonised: +1.7% y/y vs cons +1.9% and prior +2.4%; (0.1%) m/m vs cons 0.0% and prior 0.0%
Q2 GDP +3.1% y/y vs prelim +2.9%; +0.8% q/q vs prelim +0.8%
Denmark Aug Retail Sales +3.1% y/y vs prior +3.9%; +0.4% m/m vs cons +0.2% and prior 0.0%
Norway Aug Retail Sales +0.1% m/m vs cons +0.6% and prior +1.2%
Ireland Aug PPI (1.7%) y/y vs cons +5.0% and prior +5.4%; (4.3%) m/m vs cons +0.1% and prior +0.2%
Belgium Sep CPI +3.1% y/y vs consensus +3.0% and prior +2.9%; (0.5%) m/m vs prior 0.0%
Markets:
WTI Crude (Nov 24): +$0.09 or +0.13% to $67.76
€-$ (0.0016) or (0.14%) to 1.1162
£-$ (0.0018) or (0.13%) to 1.3397
€-£ (0.0002) to 0.8332
S&P 500 +0.13%
Performance year-to-date
FTSE 100: +7.60%
DAX: +16.25%
CAC: +3.30%
MIB: +14.42%
Stoxx 600: +10.25%
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