Oct 29 ,2024
Synopsis
European equity markets set to open higher, whilst Asia equities trading mixed Tuesday. Japan's markets continue to respond well to the political surprise over the weekend and will end higher. Australia also with a solid gain. Hang Seng higher but mainland China markets down. South Korea and Taiwan lower, India with more losses, Southeast Asia largely lower. US futures flat.
Market focus remains on bond yield backup as US election nears with Trump favorite to win. Upward pressure on yields attributed to projected widening of deficits/debt to fund tax cuts, with Trump's pro-growth policies and tariffs also seen as risk to disinflation trajectory and potentially complicating Fed rate cut expectations. Soft-/no-landing narrative has also gained traction on resilient macro data.
On today's agenda, EU's von der Leyen meets with NATO Secretary-General Rutte. UK's Parliament begins with MP's questions on Treasury, with the Bill to make provision about Great British Energy having its remaining stages, with Economic inactivity: welfare and long-term sickness among the committee topics at 15:00GMT (speakers from Institute for Fiscal Studies). In Germany, in the afternoon, Chancellor Scholz meets with representatives of the economy and trade unions to discuss possible actions to jointly strengthen and modernize Germany as an industrial location.
In central banks, Riksbank publishes its latest business survey ay 9:30CET. Estonia central bank press conf on the labour market at 10:00CET. Denmark Central Bank's Governor Krogstrup lecture at 18:30CET at event hosted by ICMB. SNB's Schlegel speaks at 20:00CET.
European macro data releases out today include: Germany Nov consumer confidence - GfK, Sweden Q3 preliminary GDP, Sep retail sales, UK Sep mortgage approvals, M4 money supply, Oct shop price index - BRC, Belgium Q3 preliminary GDP, Ireland Q3 preliminary GDP, Sep retail sales, Portugal Sep retail sales
Earnings season continues in Europe, with DACH companies kicking off the session. HelloFresh Group (HFG.GR), Novartis (NOVN.SW), Deutsche Lufthansa (LHA.GR), Adidas (ADS.GR), CECONOMY (CEC.GR) and Covestro (1COV.GR) reported Q3 earnings with the latter narrowing its FY24 EBITDA guidance. In the UK, HSBC Holdings (HSBA.LN) reported Q3 earnings reaffirming guidance and announcing its intention to initiate a share buy-back of up to $3B.
In Spain, banking heavyweight Banco Santander (SAN.SM) reported Q3 earnings and confirmed previously upgraded 2024 targets. In Nordics, Loomis (LOOMIS.SS), Wartsila (WET1V.FH), and Orkla (ORK.NO) are among other companies in the region to update investors with their latest numbers. Also due to report today includes ASM International (ASM.NA), OMV (OMV.AV), UPM-Kymmene (UPM.FH), Fortum (FORTUM.FH), Ferrovial (FER.SM), Davide Campari-Milano (CPR.IM), and BP (BP.LN).
Politics/Macro/World News
Spanish growth soars as Eurozone stutters - FT
Risk of German coalition breaking up rises, fate hinges on FDP liberals - Reuters
Digital euro sparks sovereignty battle between EU governments and ECB - Politico
UK open to restarting China trade talks - Politico
Labour's Bid to Help UK Renters Risks Backfiring, Analysts Warn - Bloomberg
Lower shop prices boost prospect of Bank of England rate cut - The Guardian
Top company news
Earnings/updates
DACHs
NOVN.SW (Novartis) -- reports Q3 core EPS $2.06 vs consensus $1.95
STMN.SW (Straumann Holding) -- reports Q3 revenue CHF585.5M vs StreetAccount CHF585.3M; confirms full-year outlook for 2024
HFG.GR (HelloFresh) -- Group confirms prelim Q3 earnings and FY24 outlook as per 25-Oct update
IDIA.SW (Idorsia) -- reports Q3 non-GAAP EPS (CHF0.41) vs FactSet (CHF0.53) [2 est, (CHF0.61)-(0.45)]
ATS.AV (AT & S Austria Technologie & Systemtechnik) -- guides financial year 2024/25 revenue €1.5-1.6B ex-items vs prior guidance €1.6-1.7B and FactSet €1.77B [5 est, €1.63-2.21B]
SIGN.SW (SIG Combibloc Group) -- reports Q3 adjusted net income €77.5M vs FactSet €71.2M; 2024 and mid-term guidance confirmed
1COV.GR (Covestro) -- reports Q3 EBITDA €287M vs consensus €292.0M and guidance €250M-€350M; FY24 EBITDA guidance further narrowed
CLN.SW (Clariant) -- reports Q3 adjusted EBITDA CHF155M vs consensus CHF156.0M; FY profitability confirmed on slightly lower sales
LHA.GR (Deutsche Lufthansa) -- reports Q3 net income €1.10B vs consensus €939.9M; expects FY revenue to increase significantly y/y, confirms FY Adj. EBIT guidance
HYQ.GR (Hypoport) -- reports preliminary Q3 EBIT ~€3.6M vs FactSet €3.6M [3 est, €2.7-4.5M]
CEC.GR (CECONOMY) -- trading statement; reports prelim FY adj EBIT towards upper end of €290M-€310M guidance range vs FactSet €303.1M [6 est, €299-309.7M]
DRW3.GR (Drägerwerk) -- reports Q3 EBIT, order intake and sales in line with preliminary figures; annual forecast confirmed
ADS.GR (Adidas) -- reports Q3 earnings in line with preliminary release; EPS €2.48 vs FactSet €1.82 [11 est, €0.90-2.30]; reaffirms FY guidance
Benelux
CRBN.NA (Corbion) -- reports Q3 adjusted EBITDA €49.6M vs FactSet €49.0M [1 est]; raises FY adj EBITDA organic growth rate
Nordics
ITAB.SS (ITAB Shop Concept) -- reports Q3 EPS SEK0.19 vs year-ago SEK0.32
ASPO.FH (Aspo) -- reports Q3 EPS €0.06 vs FactSet €0.15 [4 est, €0.14-0.16]
ORK.NO (Orkla) -- reports Q3 adj EPS NOK1.77 vs consensus NOK1.63
AMSC.NO (AMSC ASA) -- reports Q3 EPS from cont ops NOK2.15 vs year-ago (NOK0.29)
SOFF.NO (Solstad Maritime) -- reports Q3 net income NOK621M and unclear if compareable to FactSet NOK295.9M [1 est]
WRT1V.FH (Wartsila) -- reports Q3 EPS €0.24 vs consensus €0.21; geopolitical risks have amplified in recent months, adding uncertainty to the macro outlook
LOOMIS.SS (Loomis) -- reports Q3 EPS SEK6.91 vs FactSet SEK7.76 [3 est, SEK7.30-8.08]
HANZA.SS (HANZA AB) -- reports Q3 EPS SEK0.90 vs FactSet SEK0.64 [3 est, SEK0.53-0.80]
Southern Europe
SAN.SM (Banco Santander) -- reports Q3 underlying net income €3.25B vs consensus €3.12B
UK
HSBA.LN (HSBC Holdings) -- reports Q3 EPS $0.34 ex-items vs consensus $0.30
France
VU.FP (VusionGroup) -- reports Q3 revenue €207.1M vs year-ago €182.5M
SMCP.FP (SMCP) -- reports Q3 sales €292.6M vs FactSet €288.2M [1 est]
Also due to report today includes
Earnings:
Benelux: ASM International (ASM.NA)
DACHs: SYZYGY (SYZ.GR) and OMV (OMV.AV)
Denmark: Jyske Bank (JYSK.DC), NTG Nordic Transport Group (NTG.DC), Tivoli (TIV.DC)
Finland: UPM-Kymmene (UPM.FH), Fortum (FORTUM.FH), Orion (ORNBV.FH), Nokian Renkaat (TYRES.FH), Enento (ENENTO.FH), Finnair (FIA1S.FH)
France: Metropole Television (MMT.FP)
Southern Europe: Ferrovial (FER.SM), Davide Campari-Milano (CPR.IM), Mapfre (MAP.SM), CIE Automotive (CIE.SM), ENCE Energia y Celulosa (ENC.SM), Lottomatica (LTMC.IM)
Sweden: engcon (ENGCON.B.SS), Troax (TROAX.SS), Alimak (ALIG.SS), Storytel (STORY.B.SS), VNV Global (VNV.SS), Micro Systemation (MSAB.B.SS)
UK: BP (BP.LN), C&C Group (CCR.LN), YouGov (YOU.LN), Ultimate Products (ULTP.LN)
Trading Update: Compagnie de Saint-Gobain (SGO.FP), Eutelsat Communications (ETL.FP), Seche Environnement (SCHP.FP), Moncler (MONC.IM), Pearson (PSON.LN), Hargreaves Lansdown (HL.LN), Grammer (GMM.GR), Detection Technology (DETEC.FH)
M&A
TIGO.SS (Millicom International Cellular) -- and SBA Communications agree to long-term partnership in Central America
SAB.SM (Banco de Sabadell) -- CNMC may need to launch extended review of BBVA's bid for Sabadell - Reuters
BALN.SW (Baloise) -- sells portfolio holdings in digital insurer FRIDAY to Allianz Direct Versicherungs; total premium volume ~CHF50M
Healthcare
SAN.FP (Sanofi) -- announces availability of Beyfortus in parts of Canada
AB.FP (AB Science) -- receives notice of allowance for European patent covering masitinib until 2040 in the treatment of sickle cell disease
Other
TTE.FP (TotalEnergies) -- QatarEnergy signs partnership agreement with TotalEnergies to enter into solar power project that is part of the Gas Growth Integrated Project in Iraq (28-Oct)
DG.FP (VINCI SA) -- VINCI wins $2.78B (~€2.49B) contract to extend one of Chicago's metro lines
LOOMIS.SS (Loomis) -- resolves to continue repurchase of up to SEK 200M shares
Real Estate notable reporters, areas of focus for week ending 1-Nov
Key rating changes
Upgrades
PHIA.NA (Koninklijke Philips) -- to hold from underperform at Jefferies
PNDORA.DC (Pandora) -- to buy from hold at ABG Sundal Collier
VACN.SW (VAT Group) -- to buy from hold at Kepler Cheuvreux
COLR.BB (Colruyt Group) -- to buy from hold at ING (28-Oct, timing uncertain)
LEMON.FH (Lemonsoft) -- to accumulate from reduce at Inderes
GALP.PL (Galp Energia SGPS) -- to outperform from neutral at Santander
Downgrades
ABBN.SW (ABB Limited) -- to neutral from buy at Goldman Sachs
BOSN.SW (Bossard Holding) -- to Reduce from Add at Baader Helvea
TIFS.LN (TI Fluid Systems) -- to hold from buy at Jefferies
BIG.FP (Bigben Interactive) -- downgraded to underperform from neutral at Oddo
Initiations
TEMN.SW (Temenos) -- underperform at Oddo
SLHN.SW (Swiss Life Holding) -- outperform at BNP Paribas Exane
HELN.SW (Helvetia Holding) -- neutral at BNP Paribas Exane
BALN.SW (Baloise) -- underperform at BNP Paribas Exane
Others
SAMPO.FH (Sampo) -- reinstated buy at Nordea; prior rating was buy
Data
Nikkei +0.77% to 38903.68
Hang Seng +0.42% to 20685.35
Shanghai Composite (0.98%) to 3289.79
S&P futures +4.8 vs prior close of 5861.5
€-$ (0.0002) or (0.02%) to 1.0813
$-¥ (0.34) or (0.22%) to 152.99
€-¥ (0.30) or (0.18%) to 165.42
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