Oct 30 ,2024
Synopsis:
European equity markets closed in negative territory, but off worst levels. Follows downbeat performance on Tuesday. Tech, miners and financials the biggest decliners. Travel, retail and energy were the relative best outperformers.
UK equity markets and Gilts in focus after UK Budget. Most of the big announcements by Chancellor Reeves met expectations, with £40B worth of tax increases and a change in debt rules to boost investment. Was underpinned by an update from the Official for Budget Responsibility, which highlighted the £70B increase in annual spending, with two-thirds on day-to-day expenditure and a third on capital spending. Half is funded by tax rises and the rest by £32B more borrowing annually, which will boost growth temporarily to 2% in 2026, but output unchanged over the medium term. Gilts seeing big swings. 10-year Gilt yield hit highest level since November above 4.40%. Sterling chopping either side of $1.3000, yet off lows. Market digesting higher-than-expected debt issuance of £297B with £20B more than forecast in the long-end. In addition, fiscal headroom seen limited despite new debt rule focusing on public sector net debt and much larger-than-expected spending without moving the needle much on growth.
Macro data releases included better Eurozone GDP data after upside surprises in Germany, France, and Spain. German unemployment higher-than-expected in October. Inflation updates from Spain and German regions point to slight inflation pickup in October. Eurozone economic sentiment indicator missed. Meanwhile, Swiss KoF leading indicator points to slowdown in Swiss growth as SNB chief Schlegel hints at further interest rate cuts.
Busy on the corporate front. Out of DACHS, UBS Group (UBSG.SW) reported Q3 beat. Volkswagen (VOW3.GR) Q3 net income, revenue, EBIT beat; reiterated FY outlook. BASF (BAS.GR) Q3 revenue beat; EBITDA missed; expects to reach low end of FY24 adj EBITDA forecast range. DHL Group (DHL.GR) reported preliminary Q3 EBIT €1.37B vs FactSet €1.36B and lowered FY guidance and revised medium-term target. In France, Capgemini (CAP.FP) Q3 revenue beat; org growth missed; lowered FY outlook. Nexans (NEX.FP) Q3 revenue missed; reiterated guidance. Schneider Electric (SU.FP) Q3 revenue, org. growth beat; reiterated FY guidance. Amundi (AMUN.FP) reports Q3 adj net income broadl yin line with consensus.
In UK, GSK (GSK.LN) Q3 core EPS beat; 2024 guidance confirmed and expects to deliver broadly around the middle of existing ranges; Standard Chartered (STAN.LN) Q3 underlying op income and profit beat; raised FY operating income guidance; raised 2025-26 guidance. Next (NXT.LN) Q3 Full price sales +7.6% vs StreetAccount +5.6%; raised FY PBT guidance. Glencore (GLEN.LN) reported Q3 prod - Copper 242.6Kt vs SA 246.30Kt - FY prod guidance unchanged. Aston Martin Lagonda (AML.LN) reported Q3 adjusted loss before tax (£10.3M) vs year-ago (£123.5M); on track to deliver revised FY 2024 guidance.
In Italy, Moncler (MONC.IM) Q3 revenue, constant FX revenue growth both missed. Davide Campari-Milano (CPR.IM) Q3 EBIT, revenue, adj EBITDA all missed; offered FY outlook. Generali (G.IM) issued 9M pre close commentary. Out of Spain, Endesa (ELE.SM) 9M net income attributable beat. Redeia Corporacion (RED.SM) Q3 net income broadly in-line with forecast while Aena S.M.E. (AENA.SM) Q3 net income miss.
In the Nordics, SKF (SKF.B.SS) Q3 Adj. EPS/EBIT beat, revenue miss; now expects a FY mid-single-digit organic sales decline y/y vs prior guidance a low single-digit organic sales decline y/y. Telenor (TE L.NO) Q3 EPS beat. Elsewhere, Wolters Kluwer (WKL.NA) 9M trading update: revenues + 6% y/y organically; FY24 guidance reiterated.
In M&A news, press reports suggest UBS Group (UBSG.SW) eventually looking to buy another US wealth management firm to expand presence while (Ørsted ORSTED.DC) divests share of four UK offshore wind farms to Brookfield for £1.745B (~DKK 15.7B).
Digest:
Sectors - STOXX Europe 600:
Outperformers:
Travel & Leisure (0.28%), Retail (0.42%), Energy(0.53%), Construct & Mtls (0.55%), Insurance (0.85%), Banks (0.87%), Real Estate (0.88%), Ind Goods & Svcs (0.93%), Autos & Parts (1.01%), Telecom (1.04%), Personal Care Drug and Grocery Stores (1.05%), Chemicals (1.21%)
Underperformers:
Technology (2.51%), Basic Resources (2.11%), Financial Svcs (2.07%), Media (1.86%), Food, Beverage and Tobacco (1.70%), Consumer Products and Services (1.63%), Health Care (1.30%)
Macro/Peripheral markets:
UK:
France:
French economic momentum accelerates more than expected in Q3 - Bloomberg
Germany:
Weakness in German economy weighing on labor market - Handelsblatt
Germany's Scholz snubs coalition partners at high profile industrial summit, fueling speculation of early elections in spring - FT
Company news:
Notable Gainers
+25.0% ECK.LN (Eckoh £0.53, +0.11) -- Bridgepoint Advisers and Eckoh PLC announce recommended 54p in cash acquisition offer for each Eckoh share
+15.6% GF.SW (Georg Fischer CHF63.95, +8.65) -- to divest GF Machining Solutions to United Grinding Group; transaction value in range of CHF 630 - 650M
+13.2% TM17.LN (Team17 Group £2.40, +0.28) -- new CFO and COO
+12.6% GREENH.DC (Green Hydrogen Systems DKK2.39, +0.27) -- new CEO
+10.7% EQLS.LN (Equals Group £1.24, +0.12) -- enhanced proposal and extends PUSU deadline
+10.4% KESKOB.FH (Kesko €19.87, +1.88) -- earnings
+9.6% PUIG.SM (Puig Brands €21.33, +1.87) -- revenue
+9.4% SDI.LN (SDI Group £0.58, +0.05) -- acquires InspecVision Ltd for a net consideration of £6.1M
+8.2% GHH.LN (Gooch & Housego £4.63, +0.35) -- acquires Phoenix Optical for total consideration of up to £6.75M
+7.9% SCHP.FP (Seche Environnement €90.40, +6.60) -- revenue
+6.5% PIHLIS.FH (Pihlajalinna €10.65, +0.65) -- prelim earnings
+6.3% HEX.NO (Hexagon Composites NOK43.00, +2.55) -- order
+5.9% SWEC.B.SS (Sweco SEK180.30, +10.00) -- earnings
+5.7% KGX.GR (Kion Group €37.25, +2.01) -- earnings
+5.6% BOR.LN (Borders & Southern Petroleum £0.02, -0.00) -- extension of Production Licences
+5.5% TMO.LN (Time Out Group £0.48, +0.03) -- earnings; placing
+5.5% HEALTH.FH (Nightingale Health €3.46, +0.18) -- updates on its strategic partnership with Boston Heart Diagnostics
+5.5% SYAB.GR (Synlab €11.54, +0.60) -- Cinven to acquire Elliott's ~10% stake in Synlab; terms undisclosed
+5.4% ASM.NA (ASM International €544.60, +28.00) -- earnings
+5.1% AML.LN (Aston Martin Lagonda Global Holdings £1.11, +0.05) -- earnings
+5.0% TEL.NO (Telenor NOK137.50, +6.60) -- earnings
+4.4% GFTU.LN (Grafton Group £10.43, +0.44) -- trading update
+4.1% STAN.LN (Standard Chartered £9.13, +0.36) -- earnings
+4.1% AKRBP.NO (Aker BP NOK234.50, +9.20) -- earnings
+4.0% EMEIS.FP (Emeis SA €6.26, +0.24) -- revenue
+3.9% GLA1V.FH (Glaston €0.85, +0.03) -- earnings; reorganization
+3.8% MBB.GR (MBB €108.40, +4.00) -- buyback
+3.7% SDZ.SW (Sandoz Group CHF39.55, +1.41) -- revenue
+3.6% BNOR.NO (BlueNord NOK545.00, +19.00) -- earnings
+3.2% HTG.LN (Hunting £3.02, +0.10) -- Kepler Cheuvreux upgrade
+2.7% DEC.LN (Diversified Energy Co. £9.22, +0.24) -- completes previously announced acquisition of East Texas assets for a total gross purchase price of $69M before customary purchase price adjustments
+2.4% ENC.SM (ENCE Energia y Celulosa €2.91, +0.07) -- earnings
+2.1% UNI.SM (Unicaja Banco €1.11, +0.02) -- earnings
+1.9% SKF.B.SS (SKF SEK207.20, +3.90) --
earnings
to divest its ring and seal operation in Hanover to Carco PRP Group for a total enterprise value of $220M
Notable Decliners
-24.2% GLJ.GR (GRENKE €19.40, -6.20) -- earnings
-18.5% CPR.IM (Davide Campari-Milano €6.33, -1.44) -- earnings
-13.9% GURN.SW (Gurit Holding CHF19.64, -3.16) -- revenue
-12.7% MELE.BB (Melexis €60.95, -8.90) -- earnings
-8.4% WAWI.NO (Wallenius Wilhelmsen NOK109.50, -10.10) -- earnings
-7.4% NEX.FP (Nexans €128.40, -10.20) -- revenue
-6.5% SHOT.SS (Scandic Hotels Group SEK68.30, -4.75) -- earnings
-6.4% CAP.FP (Capgemini €164.80, -11.25) -- revenue
-5.1% CABP.LN (CAB Payments Holdings £1.14, -0.06) -- trading update
-5.0% AKAST.NO (Akastor NOK13.00, -0.68) -- earnings
-4.9% MCOV.B.SS (Medicover SEK175.80, -9.00) -- earnings
-4.6% NANO.LN (Nanoco Group £0.11, -0.01) -- completes buyback
-4.5% UBSG.SW (UBS Group CHF27.18, -1.29) --
earnings
UBS eventually looking to buy another US wealth management firm to expand presence - Bloomberg
-4.3% MMT.FP (M6-Metropole €11.60, -0.52) -- revenue
-4.2% NETC.DC (Netcompany Group DKK297.80, -13.20) -- completes buyback
-3.6% RBI.AV (Raiffeisen Bank International €17.68, -0.66) -- earnings
-3.2% BIRG.ID (Bank of Ireland Group €8.46, -0.28) -- trading update
-3.1% GSK.LN (GSK Plc £14.07, -0.45) -- earnings
-3.0% OKDBV.FH (Oriola €0.90, -0.03) -- earnings
-2.9% MIKN.SW (Mikron Holding CHF14.90, -0.45) -- expects 2024 net profit to be lower y/y
-2.8% FG.SS (Fasadgruppen Group SEK49.55, -1.45) -- earnings; acquisition; credit facility conversion
-2.7% WKL.NA (Wolters Kluwer €155.75, -4.25) -- trading update
-2.7% ORSTED.DC (Ørsted DKK408.50, -11.40) -- divests share of four UK offshore wind farms to Brookfield for £1.745B (~DKK 15.7B)
-2.6% DTG.GR (Daimler Truck Holding $38.05, -1.02) -- Daimler Truck to take one-time €180M receivables-related adjustment in Q3 in connection with previously announced review of China operations
-2.6% MONC.IM (Moncler €51.64, -1.36) -- sales; initiated hold at Berenberg
-2.5% AMUN.FP (Amundi €68.95, -1.75) -- earnings
-2.5% CTT.PL (CTT - Correios de Portugal €4.12, -0.11) -- earnings
-2.3% ALMCP.FP (McPhy Energy €1.68, -0.04) -- earnings
-2.2% BRG.NO (Borregaard NOK200.50, -4.50) -- earnings
-2.2% FER.SM (Ferrovial €37.02, -0.82) -- revenue
-2.1% VOLCAR.B.SS (Volvo Car SEK23.13, -0.50) -- initiates process to take full ownership of NOVO Energy
-1.9% IRLAB.A.SS (IRLAB Therapeutics SEK12.85, -0.25) -- earnings
-1.7% BAS.GR (BASF SE €44.52, -0.75) -- earnings
EU companies reporting tomorrow:
Earnings:
Benelux: Anheuser-Busch InBev (ABI.BB), ING Groep (INGA.NA), Universal Music Group (UMG.NA)
DACHs: Swisscom (SCMN.SW), Geberit (GEBN.SW), Erste Group Bank (EBS.AV), Andritz (ANDR.AV), AT & S Austria Technologie & Systemtechnik (ATS.AV), Knorr-Bremse (KBX.GR), Scout24 (G24.GR), AIXTRON (AIXA.GR), Befesa (BFSA.GR), Vossloh (VOS.GR), Logwin (TGHN.GR), PSI Software (PSAN.GR), Surteco Group (SUR.GR), Baader Bank (BWB.GR)
Denmark: Danske Bank (DANSKE.DC), A.P. Moller-Maersk (MAERK.B.DC), Spar Nord Bank (SPNO.DC), Netcompany (NETC.DC), D/S Norden (DNORD.DC), Solar (SOLAR.B.DC)
Finland: Qt Group (QTCOM.FH), Sanoma (SANOMA.FH), Revenio (REG1V.FH), YIT (YIT.FH), Etteplan (ETTE.FH), Talenom (TNOM.FH)
France: TotalEnergies (TTE.FP), BNP Paribas (BNP.FP), STMicroelectronics (STMPA.FP), Societe Generale (GLE.FP), Ayvens (AVY.FP), Technip Energies (TE.FP), Pluxee (PLX.FP), Viridien (VIRI.FP)
Norway: SpareBank 1 SMN (MING.NO), Aker Solutions (AKSO.NO), BlueNord (BNOR.NO), Sea1 Offshore, Inc. (SEA1.NO), OKEA (OKEA.NO), Morrow Bank (MOBA.NO), Axactor (ACR.NO), Vistin Pharma (VISTN.NO)
Southern Europe: Intesa Sanpaolo (ISP.IM), Banco Bilbao Vizcaya Argentaria (BBVA.SM), CaixaBank (CABK.SM), Prysmian (PRY.IM), Repsol (REP.SM), Banco de Sabadell (SAB.SM), Grupo Catalana Occidente (GCO.SM), Fluidra (FDR.SM), Semapa (SEM.PL), Laboratorio Reig Jofre (RJF.SM)
Sweden: Paradox Interactive (PDX.SS), Humble (HUMBLE.SS), XANO Industri (XANO.B.SS), BioInvent International (BINV.SS), Fasadgruppen (FG.SS), Eltel (ELTEL.SS), GomSpace (GOMX.SS)
UK: Shell (SHEL.LN)
Trading Update: Stellantis (STLAM.IM), DSM-Firmenich (DSFIR.NA), Arcadis (ARCAD.NA), Van Lanschot Kempen (VLK.NA), Flow Traders Ltd. (FLOW.NA), Heijmans (HEIJM.NA), Recticel (RECT.BB), Carlsberg (CARL.B.DC), Haleon (HLN.LN), Coca-Cola HBC (CCH.LN), Smith & Nephew (SN.LN), Zotefoams (ZTF.LN), Spectris (SXS.LN), SPIE (SPIE.FP), Sopra Steria Group (SOP.FP), Casino, Guichard-Perrachon (CO.FP), Avolta (AVOL.SW), Molecular Partners (MOLN.SW), Gurit (GURN.SW)
Data:
Economics:
Q3 Prelim GDP
Eurozone +0.9% y/y vs cons +0.8% and prior +0.6%; +0.4% q/q vs cons +0.2% and prior +0.2%
Germany (0.2%) y/y vs cons (0.3%) and prior 0.0%; +0.2% q/q vs cons (0.1%) and prior (0.1%)
France +1.3% y/y vs cons +0.7% and prior +1.0%; +0.4% q/q vs cons +0.3% and prior +0.2%
Italy +0.4% y/y vs cons +0.7% and prior revised +0.6% from +0.9%; 0.0% q/q vs cons +0.2% and prior +0.2%
Spain +3.4% y/y vs cons +3.0% and prior revised +3.2% from +3.1%; +0.8% q/q vs cons +0.6% and prior +0.8%
Portugal +1.9% y/y vs consensus +1.6% and prior +1.5%
Oct Preliminary CPI
Germany +2.0% y/y vs consensus +1.8% and prior +1.6%
Spain +1.8% y/y vs consensus +1.7% and prior +1.5% ; +0.6% m/m vs cons +0.5% and prior (0.6%)
Eurozone Oct
Economic Sentiment Indicator 95.6 vs cons 96.3 and prior revised 96.3 from 96.2
Consumer Confidence (12.5) vs prelim (12.5)
Services Sentiment Indicator 7.1 vs cons 6.6 and prior revised 7.1 from 6.7
Germany Oct Unemployment Change +27K vs cons +15K and prior +17K
Oct Unemployment Rate 6.1% vs cons 6.1% and prior 6.0%
France Sep Consumer Goods Spending +0.1% m/m vs cons +0.1% and prior revised +0.4% from +0.2%
Sep PPI
Italy (2.0%) y/y vs cons +1.0% and prior (0.8%); (0.6%) m/m vs cons +0.4% and prior +0.7%
Greece (4.5%) y/y vs consensus (4.0%) and prior (2.4%)
Norway Sep Retail Sales (0.3%) m/m vs cons +0.1% and prior +0.1%
Switzerland Oct
ZEW Expectations (7.7) vs cons (5.0) and prior (8.8)
KOF Leading Indicators 99.5 vs cons 105.1 and prior revised 104.5 from 105.5
Portugal Sep Unemployment Rate 6.4% vs consensus 6.7% and prior 6.4%
Belgium Oct CPI +3.2% y/y vs consensus +3.2% and prior +3.1%
Markets:
WTI Crude (Dec 24): +$1.59 or +2.37% to $68.80
€-$ +0.0044 or +0.41% to 1.0863
£-$ (0.0009) or (0.07%) to 1.3008
€-£ +0.0039 to 0.8351
S&P 500 +0.14%
Performance year-to-date
FTSE 100: +5.51%
DAX: +14.96%
CAC: (1.52%)
MIB: +13.68%
Stoxx 600: +6.79%
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