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StreetAccount Summary - EU Market Recap: FTSE 100 +0.65% to 8243.74, DAX +0.99% to 19254.93, CAC40 +0.52% to 7560.09, STOXX 600 +0.66% to 520.05

Oct 09 ,2024

  • Synopsis:

    • European markets ended mostly higher on Wednesday, with German DAX +1% leading regional gainers. Follows negative close on Tuesday with all indices ending near two-week lows. Risk appetite still fragile on lack of China stimulus details, despite equity strategists turning bullish on China citing combination of undemanding valuations, improved outlook for earnings, light positioning, and increased retail participation. Later today markets likely to focus on FOMC minutes (14 ET),, in particular discussions about pace of interest rate cuts going forward and what could trigger faster easing. Focus in Europe on China-linked sectors as well as ECB speak, with Stournaras, Villeroy and Kazaks pointing to faster policy easing. Some focus also on Ukraine, as endgame discussions materialize. Barnier's minority government survived first no-confidence vote. Germany revised lower its output projection for 2024 to -0.2%, which would make it a second consecutive year of contraction. This compares with previous projection of 0.3% growth for this year. However, 1.1% growth is expected for 2025, up from 1.0% previously. (Reuters )

    • Focus on UK politics. BBC reports Kemi Badenoch and Robert Jenrick are the final two candidates to become the new Conservative Party leader, with James Cleverly eliminated from the contest. Badenoch got 42 votes from MPs; Jenrick 41, and Cleverly 37. The winner will be decided in a vote among Conservative Party members this month, with a final result released on 2 November

    • On the corporate front, focus on M&A. Rio Tinto (RIO.LN) to acquire Arcadium Lithium for $5.85/share cash. Mondi (MNDI.LN) to acquire Western Europe Packaging Assets of Schumacher Packaging with enterprise value of €634M. Autos & Parts among strongest EU sector gainers today with upside from Continental (CON.GR). Conti held its Q3 pre-calls yesterday ahead of the Q3 publication expected on 11-Nov (pre-open). In an environment of profit warnings of the peer sector, Conti's update during the pre close was seen as a sign of comfort.. Elsewhere, VARTA AG (VAR1.GR) shares jumped as signs agreement with Porsche (P911.GR) regarding investment in business unit for large-format lithium-ion cells. Bayer AG (BAYN.GR) shares slumped with the move attributed to reports Washington Supreme Court has accepted Erickson case for review. ING (INGA.NA) weighed on Banks after being downgraded to hold from buy at Deutsche Bank.

    • In the US, Hurricane Milton continues to barrel toward the Florida coast; destructive category 5 storm currently expected to make landfall somewhere near Sarasota early Thursday morning. Catastrophic damage expected from extreme winds and flooding, with storm seen as one of the worst to hit that region in more than a century.

    • Looking ahead to tomorrow's European agenda, Riksbank's Thedéen speech at 8:30CET at seminar organised by SNS and the Riksbank, Norges Bank's Longva and Børsum speak at 10:00CET Bank's Regional Network, Region South and BOE credit conditions survey published at 9:30BST. ECB minutes from last MPC meeting released at 13:30CET. Elsewhere, in Germany, ministers of economics Habeck and finance Lindner among the speakers at Brand Assn annual meeting and Chancellor Scholz hosts President of the European Council, António Costa, in the run-up to Costa's inauguration on 1-Dec. In France, government presents budget bill for 2025. Earnings/updates due from the likes of Givaudan (GIVN.SW), Gerresheimer (GXI.GR) and Sudzucker (SZU.GR). Deutsche Telekom's (DTE.GR) two-day Capital Markets Day starts. On Friday, US Bank earnings start with JPMorgan and Wells Fargo.

  • Digest:

    • Sectors - STOXX Europe 600:

      • Outperformers:

        • Technology +1.29%, Autos & Parts +1.09%, Ind Goods & Svcs +1.00%, Personal Care Drug and Grocery Stores +0.90%, Insurance +0.88%, Construct & Mtls +0.88%, Financial Svcs +0.81%, Basic Resources +0.72%, Food, Beverage and Tobacco +0.69%

      • Underperformers:

        • Energy+0.14%, Banks +0.23%, Health Care +0.34%, Utilities +0.40%, Retail +0.51%, Chemicals +0.58%, Consumer Products and Services +0.62%, Media +0.63%, Telecom +0.64%, Real Estate +0.66%

    • Macro:

      • UK

        • Kemi Badenoch or Robert Jenrick will be Tory leader as Cleverly is eliminated -- The Guardian

        • The Tories have got the right-wing face-off they really wanted -- i

        • Keir Starmer refuses to rule out raising employer National Insurance rate -- FT

      • ECB

        • ECB's Kazimir Offers Only Real Opposition to Rate Cut Next Week -- Bloomberg

        • ECB Rates Can Be Neutral in 2025 If Inflation at 2%, Kazaks Says -- Bloomberg

        • ECB's Stournaras calls for faster rate cuts as inflation target nears -- FT

        • ECB set for October and December rate cuts as inflation dips below 2%, economists say -- Reuters

        • ECB's Nagel warns of economic risks to Europe if Trump wins re-election -- Bloomberg

        • ECB's Villeroy signals "very probable" rate cut in October, hints at further easing -- Bloomberg

      • EU

        • Von der Leyen attacks Orbán's support for Russia in fiery speech to European Parliament -- POLITICO

      • Germany

        • Germany expects economy to shrink after cutting 2024 forecast -- FT

        • German public sector unions demand 8% pay hike -- Reuters

      • Italy

        • Giorgetti says he wants to 'build credibility -- ANSA

      • Greece

    • Company news:

      • Notable gainers

        • +78.7% VAR1.GR (VARTA €3.19, +1.46) -- signs agreement with Porsche regarding investment in business unit for large-format lithium-ion cells

        • +10.9% SPA.LN (1Spatial £0.61, +0.06) -- contract

        • +7.0% CON.GR (Continental €59.70, +3.92) -- issues Q3 reference sheet; Q3 pre-close call seen as reassuring

        • +5.5% CABP.LN (CAB Payments Holdings £0.00, +0.06) -- vague rumors of some kind of corporate activity

        • +4.8% NDX1.GR (Nordex €13.69, +0.63) -- 9M order intake

        • +4.5% GXI.GR (Gerresheimer €81.15, +3.50) -- Activist investor Eminence Capital has 5.43% stake in Gerresheimer -- filing

        • +4.2% MNDI.LN (Mondi £14.62, +0.59) -- to acquire Western Europe Packaging Assets of Schumacher Packaging with enterprise value of €634M

        • +3.5% NET.LN (Netcall £0.89, +0.03) -- earnings

        • +2.1% STLAM.IM (Stellantis €12.21, +0.26) -- EU sets a provisional deadline of 13-Nov to rule on One Equity Partners' acquisition of a stake in Comau S.p.A.

        • +2.1% BELA.GA (Jumbo €26.20, +0.54) -- reports Sep sales ~ +6% y/y

        • +1.8% INF.LN (Informa £8.14, +0.15) -- outlines 2025-30 business plan; reaffirms 2024 guidance

        • +1.7% GEKTERNA.GA (GEK Terna €17.68, +0.30) -- EU clears Abu Dhabi Future Energy Co (Masdar) acquisition of Terna Energy

        • +1.7% DOFG.NO (DOF Group NOK91.05, +1.50) -- reinstated buy at DnB Markets; prior rating was buy

        • +1.1% LIFCO.B.SS (Lifco SEK333.00, +3.60) -- to acquire majority of Ascot Signs; terms undisclosed

        • +1.1% EMGS.NO (Electromagnetic Geoservices NOK2.20, +0.03) -- trading update

        • +0.6% DOV.IM (doValue €5.44, +0.03) -- contracts

        • +0.4% MARS.LN (Marston's £0.43, -0.00) -- trading update

        • +0.3% EQT.SS (EQT AB SEK334.00, +1.00) -- Bain, EQT and CVC Capital Partners among bidders for TPG's Novotech - Australian Financial Review

        • +0.1% CAML.LN (Central Asia Metals £1.91, -0.00) -- reports Q3 copper production 3,641 tonnes vs year-ago 3,661

        • +0.1% RIO.LN (Rio Tinto $50.45, +0.05) -- Rio Tinto to acquire Arcadium Lithium for $5.85/share cash

      • Notable decliners

        • -39.1% GREENH.DC (Green Hydrogen Systems DKK2.95, -1.89) -- initiates restructuring; ~100 jobs affected, one-off implementation costs of DKK 100-150M and seeks to raise DKK 300M; lowers FY24 guidance

        • -11.7% REVB.LN (Revolution Beauty Group £0.15, -0.02) -- trading update

        • -11.4% TNOM.FH (Talenom €4.32, -0.56) -- profit warning; to separate software business

        • -9.4% BOCH.CY (Bank of Cyprus Holdings €4.35, -0.45) -- holder AB CarVal Investors, L.P. places 13.5M shares at €4.20/share through BofA and Jefferies

        • -7.0% BAYN.GR (Bayer AG €27.21, -2.04) -- reports Washington Supreme Court has accepted Erickson case for review, we're told

        • -5.6% ORES.SS (Investment AB Öresund SEK119.40, -7.00) -- earnings

        • -4.4% CMBT.BB (CMB.TECH €15.00, -0.69) -- Euronav Luxembourg S.A. announces reopening of the mandatory public takeover bid on CMB.TECH

        • -2.7% ZEAL.DC (Zealand Pharma DKK781.50, -22.00) -- provides U.S. regulatory update on dasiglucagon in congenital hyperinsulinism

        • -2.2% DMYD.B.SS (Diamyd Medical SEK13.56, -0.30) -- earnings

        • -0.7% CMCX.LN (CMC Markets £3.01, -0.02) -- trading update

        • -0.6% CRTA.LN (Cirata £0.29, -0.00) -- trading update

        • -0.5% NEXT.NO (Next Biometrics Group NOK7.68, -0.04) -- prelim sales

        • -0.4% ITH.LN (Ithaca Energy £1.04, -0.00) -- announces its wholly owned subsidiary Ithaca Energy (North Sea) plc has commenced refinancing of existing debt facilities

    • EU companies reporting tomorrow:

      • Earnings:

        • DACHs: Gerresheimer (GXI.GR), Sudzucker (SZU.GR), ABOUT YOU Holding (YOU.GR), AGRANA Beteiligungs (AGR.AV)

        • France: Voyageurs du Monde (ALVDM.FP), Wallix Group (ALLIX.FP)

        • Nordics: Bang & Olufsen (BO.DC)

        • UK: Volution Group (FAN.LN)

      • Trading Update: Givaudan (GIVN.SW), Kuros Biosciences Ltd. (KURN.SW), Liontrust Asset Management (LIO.LN), Norcros (NXR.LN), Heidelberg Pharma (HPHA.GR), Fagron (FAGR.BB)

      • Traffic: Flughafen Zurich (FHZN.SW)

      • CMD/events: Deutsche Telekom (DTE.GR), Deutsche Pfandbriefbank (PBB.GR), MediGene (MDG1.GR) R&D, Evotec (EVT.GR), BPER Banca (BPE.IM)

  • Data:

    • Economics:

      • Germany Aug Trade Balance €22.5B vs consensus €18.4B and prior €16.8B

      • Denmark Aug Trade Balance DKK28.3B vs consensus DKK29.5B and prior revised DKK28.6B from DKK32.7B

    • Markets:

      • WTI Crude (Nov 24): ($0.32) or (0.43%) to $73.25

      • €-$ (0.0025) or (0.23%) to 1.0951

      • £-$ (0.0026) or (0.20%) to 1.3079

      • €-£ (0.0006) to 0.8374

      • S&P 500 +0.54%

      • Performance year-to-date

        • FTSE 100: +6.60%

        • DAX: +14.94%

        • CAC: +0.22%

        • MIB: +11.80%

        • Stoxx 600: +8.57%

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