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StreetAccount Summary - EU Market Recap: FTSE 100 +0.05% to 8199.11, DAX (0.02%) to 20242.57, CAC40 +0.26% to 7384.62, STOXX 600 +0.15% to 514.43

Dec 18 ,2024

• Synopsis:

  • European equity markets closed mixed. Austria +0.4% lead outperformers, whilst Switzerland (0.9%) lead underperformers. Technology and Banks the best performers, while Chemicals and Basic Resources lag. Follows mostly lower close on Tuesday.

  • Attention on Fed policy decision. Widely expected to cut rates by 25 bp at Wednesday's meeting. Bigger focus will on SEP and dot plot with markets having wound back projected 2025 rate cuts (some thoughts dot plot may signal three rate cuts next year vs four previously). Chair Powell likely to be asked for details on rate outlook in post-meeting press conference and may default back to gradual/patient phrasing pushed by Fed officials over past month.

  • Meanwhile, Bloomberg sources noted Biden administration set to launch another probe into China semis that could lead to restrictions on China imports containing foundational chips. However, any decision will be left to the Trump administration.

  • On the macro-data front, focus on UK inflation. Prices accelerated further away from the BoE's target in November to +2.6% versus consensus +2.6% and prior +2.3%. Core inflation registered +3.5% versus +3.6% forecast and prior +3.3% and services prices at +5.0% versus consensus +5.1% and prior +5.0%. Today's CPI data and yesterday's upside surprise in wage growth is unlikely to change the direction of travel for BoE policy. Policymakers set to keep rates unchanged tomorrow and maintain gradual approach to easing. Eurozone Nov final CPI softer compared to flash reading +2.2% y/y vs preliminary +2.3%. France's Insee cut 2025 growth forecasts following similar move by Bank of France on Monday. Moody's also cut the rating outlook for BNP and Credit Agricole on Tuesday due to weakened public finances amid political turmoil.

  • On the corporate front, ThyssenKrupp (TKA.GR) pursuing spin-off for marine division, CECONOMY (CEC.GR) reported final FY earnings in line with the preliminary release and indicated that it's aiming for a dividend payout ratio of 10-25% of EPS in the future, whilst AT & S Austria Technologie & Systemtechnik (ATS.AV) adjusted its outlook for the financial year 2026/27. In the UK, AstraZeneca's (AZN.LN) sales in China reportedly declined following the arrest of the local president as it faces difficulties selling drugs to Chinese hospitals (FT). Elsewhere, Stellantis (STLAM.IM) reportedly to unveil plan to revitalize Italian production amid industry changes.

  • On the M&A newsflow, Unicredit (UCG.IM) increases stake in Commerzbank (CBK.GR) to ~28% from earlier ~21% while Ørsted (ORSTED.DC) divested 50% equity stake in three US solar and battery storage projects to Energy Capital Partners for $572M.

  • Looking ahead to tomorrow's calendar (see - Europe Week Ahead: 16-Dec to 20-Dec attached) Douglas (DOU.GR), Per Aarsleff Holding (PAAL.B.DC), SkiStar (SKIS.B.SS), EXEL Industries (EXE.FP), Roblon (RBLN.B.DC), Serco Group (SRP.LN) will be among other names to update investors, whilst the macro-calendar releases will include Germany Jan consumer confidence - GfK, France Dec business confidence, Switzerland Nov trade balance (and monthly watch data), Spain Oct trade balance, Netherlands Nov unemployment rate. Also due tomorrow Interest Rate Decision from Riksbank (9:30CET, press conf 11:00), Norges Bank (10:00CET, press conf 10:30) and BOE (12noon GMT).

• Digest:

  • Sectors - STOXX Europe 600:

    • Outperformers:

      • Technology +1.15%, Banks +0.98%, Energy+0.57%, Retail +0.50%, Ind Goods & Svcs +0.49%, Media +0.47%, Autos & Parts +0.38%, Construct & Mtls +0.25%,

    • Underperformers:

      • Chemicals (0.78%), Basic Resources (0.77%), Food, Beverage and Tobacco (0.64%), Personal Care Drug and Grocery Stores (0.55%), Utilities (0.52%), Insurance (0.43%), Telecom (0.38%), Health Care (0.06%), Consumer Products and Services (0.03%), Financial Svcs +0.05%, Travel & Leisure +0.12%,

  • Macro/Peripheral markets:

    • Geopolitics

      • Russia arrests suspect for Moscow bombing that killed chemical weapons chief - Politico

      • Russian minister says Moscow can definitely work with Trump administration - Reuters

      • Turkey-Backed Syria Forces Aim to Push on Against Kurdish Groups - Bloomberg

    • Central banks

      • ECB publishes new wage tracker indicators - release

        • ECB wage tracker ---- blog

      • Nagel speech - release

      • Müller speech - release

      • Speech by Philip R. Lane - release

      • SNB: GDP growth in 2024 expected at 1% - Baha

    • EU

      • EU Commission unveils the second part of the European Semester Autumn Package - release ; Remarks by Commissioner Dombrovskis - release

      • Speech by President von der Leyen at the European Parliament Plenary in preparation of the European Council meeting of 19 December 2024 - release

    • UK

      • Brexit cost UK £27bn in lost trade in first two years, review finds - The Guardian

      • Taxpayers can't afford Waspi compensation, says PM - BBC

      • Traders slash rate cut bets as Britain told it 'can't afford Labour' - The Telegraph, Bloomberg

      • London Rents Rising at Record Pace Add to Pressure on Labour - Bloomberg

    • France

      • Macron skips EU summit to visit cyclone-hit island Mayotte - Politico

      • French ex-president loses final appeal in graft case - Baha

      • French far-right leader Marine Le Pen eyes early presidential election - Reuters

    • Germany

      • Söder considers possible coalition with the SPD problematic - Handelsblatt

      • Economist Schnitzer remains on the Council of Economic Experts - Handelsblatt

      • Budget committee releases 2.7 billion euros for railways - Handelsblatt

      • Germany Asks EU to Ease Green Reporting Rules Amid Downturn - Bloomberg

    • Italy

      • EU okays €1.3B for 'first-of-a-kind' chip facility in Italy - Baha

    • Sweden

      • Swedish government revises down GDP forecast for 2024, 2025 and 2026 - release

    • Denmark

      • Denmark to revamp defence plan agreed just 8 months ago - FT

    • Ireland

      • Verona Murphy elected new Ceann Comhairle on third count - Politico

  • Company news:

    • Trading Higher:

      • +39.0% ODHN.SW (Orascom Development Holding CHF5.70, +1.56) -- announces CHF 5.60 per shre offer from main shareholder LPSO Holding

      • +32.0% ALTHX.FP (Theranexus €0.65, +0.15) -- licensing agreement to commercialize Theranexus TX01; update on cash position

      • +28.3% PMET.CN (Patriot Battery Metals C$2.65, +0.75) -- Volkswagen to take 9.9% stake in Patriot Battery Metals for C$4.42/share, or $48M (€45.9M) total

      • +23.7% 7201.JP (Nissan Motor ¥417.60, +80.00) -- Honda, Nissan discussing merger to fend off acquisition by Hon Hai - Nikkei (14:51 JT/06:51 CET)

      • +21.4% SBB.B.SS (Samhällsbyggnadsbolaget i Norden SEK4.25, +0.75) -- results of tender and exchange offers

      • +19.6% GRE.SM (Grenergy Renovables €33.65, +5.55) -- sale of Phases 1, 2 and 3 of the project Oasis de Atacama; upgraded to buy from neutral at Alantra Equities

      • +17.9% HNSA.SS (Hansa Biopharma SEK31.70, +5.08) -- positive full results from study

      • +11.5% VU.FP (VusionGroup €148.60, +15.40) -- partnership

      • +8.6% KTN.GR (Kontron €19.40, +1.54) -- order

      • +8.4% DHG.ID (Dalata Hotel Group €4.49, +0.37) -- FY Trading Update: expects adj. EBITDA in excess of €232M vs FactSet €229.5M [6 est, €224.8-237.9M]

      • +7.5% HTRO.SS (Hexatronic Group SEK36.60, +2.58) -- initiated buy at Kepler Cheuvreux

      • +7.4% YIT.FH (Yit €2.32, +0.16) -- agreed with Hitachi Energy on the construction of a new production and technology centre in Mustasaari;

      • +5.7% MB8.GR (Moberg Pharma €0.89, +0.05) -- secures new terbinafine supplier

      • +5.2% RNO.FP (Renault €47.51, +2.31) -- Honda, Nissan discussing merger to fend off acquisition by Hon Hai - Nikkei

      • +5.1% NCH2.GR (thyssenkrupp nucera €10.75, +0.53) -- follow-through

      • +4.3% CIBUS.SS (Cibus Nordic Real Estate SEK172.25, +7.15) -- contemplates to acquire Forum Estates Holding BV

      • +4.3% SOFF.NO (Solstad Offshore NOK37.86, +1.56) -- initiated buy at Fearnley

      • +4.3% MAU.FP (Maurel et Prom €5.02, +0.21) -- CIC Market Solutions upgrade

      • +4.2% PROX.BB (Proximus €5.03, +0.20) -- to integrate BICS, Telesign and Route Mobile under one umbrella (12:15 ET)

      • +3.8% CCT.LN (Character Group £2.72, +0.10) -- earnings

      • +3.7% VIV.FP (Vivendi €2.57, +0.09) -- resumed overweight at Barclays

      • +3.3% ISOFOL.SS (Isofol Medical SEK2.57, +0.08) -- to expand the upcoming clinical trial of arfolitixorin to Japan

      • +3.1% MAIRE.IM (MAIRE €7.87, +0.24) -- Nextchem and newcleo Holding SA agree to form a JV company to develop a new generation commercial-scale power plant

      • +2.9% CTT.PL (CTT - Correios de Portugal €4.55, +0.13) -- agrees to Compañia Auxiliar al Cargo Expres, S.A.U. for a total consideration of €104M

      • +2.4% FM.IM (Fiera Milano €4.57, +0.11) -- approves a related party transaction related to the Milan congress center

      • +2.1% PSM.GR (ProSiebenSat.1 Media €5.44, +0.11) -- in talks to sell Verivox to Moltiply Group - Bloomberg (17-Dec, 15:38 CET)

    • Trading Lower:

      • -49.5% FING.B.SS (Fingerprint Cards SEK0.04, -0.04) -- announces partially guaranteed rights issue

      • -38.6% SHOE.LN (Shoe Zone £0.80, -0.54) -- trading update

      • -19.3% ATS.AV (AT & S Austria Technologie & Systemtechnik €10.60, -2.53) -- AT&S Austria Technologie & Systemtechnik adjusts outlook for financial year 2026/27

      • -17.2% KAMUX.FH (Kamux €2.73, -0.55) -- profit warnings; debt facility

      • -13.0% DOCM.SW (DocMorris CHF20.60, -3.06) -- German drugstore chain, dm, plans to enter the online pharmacy market - Handelsblatt

      • -12.9% SEAPT.NO (Seacrest Petroleo Bermuda NOK0.15, -0.02) -- default on bonds

      • -12.7% CEC.GR (CECONOMY €3.12, -0.37) -- earnings

      • -11.9% IHP.LN (Integrafin Holdings £3.61, -0.47) -- earnings

      • -6.5% ALSEN.FP (Sensorion €0.62, -0.04) -- study data update

      • -6.1% OSB.LN (OSB Group £3.95, -0.25) -- downgraded to hold from add at Peel Hunt

      • -5.8% ZTF.LN (Zotefoams £3.07, -0.19) -- trading update; pauses investment in Rezorce

      • -4.3% SES.IM (SeSa €77.25, -3.30) -- acquires Metisoft S.p.A.; terms undisclosed

      • -3.9% DFDS.DC (DFDS DKK124.70, -5.10) -- Carnegie Securities downgrade

      • -3.3% RDC.GR (Redcare Pharmacy €134.00, -4.80) -- German drugstore chain, dm, plans to enter the online pharmacy market - Handelsblatt

      • -3.3% PKTM.SW (PIERER Mobility CHF10.74, -0.36) -- appoints Citi to reorganize ownership structure

      • -3.1% STERV.FH (Stora Enso €9.46, -0.31) -- impairments

      • -3.0% DAE.SW (Dätwyler Holding CHF138.40, -4.20) -- Dätwyler launches "ForwardNow" transformation program for 2025-7, targeting CHF24M in annual profit gains

      • -2.5% EBUS.NA (Ebusco Holding €1.05, -0.03) -- organizational changes

      • -1.8% UBI.FP (Ubisoft Entertainment €12.18, -0.23) -- downgraded to hold from buy at Stifel downgrade

      • -1.5% AZN.LN (AstraZeneca £104.46, -1.58) -- sales in China decline following arrest of local president as it faces difficulties selling drugs to Chinese hospitals - FT

  • EU companies reporting tomorrow:

    • Earnings: Douglas (DOU.GR), Per Aarsleff Holding (PAAL.B.DC), SkiStar (SKIS.B.SS), EXEL Industries (EXE.FP), Roblon (RBLN.B.DC)

    • Trading Update: Serco Group (SRP.LN)

• Data:

  • Economics:

    • Eurozone Nov CPI +2.2% y/y vs preliminary +2.3% ; (0.3%) m/m vs preliminary (0.3%)

      • Core CPI +2.7% y/y vs preliminary +2.7%

    • UK Nov

      • CPI +2.6% y/y vs cons +2.% and prior +2.3%; +0.1% m/m vs cons +0.1% and prior +0.6%

        • Core +3.5% y/y vs cons +3.6% and prior +3.3%

      • RPI +3.6% y/y vs cons +3.6% and prior +3.4%; +0.1% m/m vs cons +0.1% and prior +0.5%

      • Output PPI (0.6%) y/y vs cons (0.6%) and prior revised (0.9%) from (0.8%); +0.3% m/m vs cons +0.2% and prior revised (0.1%) from 0.0%

      • Input PPI (1.9%) y/y vs cons (2.5%) and prior revised (2.4%) from (2.3%); 0.0% m/m vs cons +0.2% and prior +0.1%

  • Markets:

    • WTI Crude (Jan 25): +$1.19 or +1.70% to $71.27

    • €-$ (0.0021) or (0.20%) to 1.0471

    • £-$ (0.0019) or (0.15%) to 1.2693

    • €-£ (0.0007) to 0.8249

    • S&P 500 +0.22%

    • Performance year-to-date

      • FTSE 100: +6.02%

      • DAX: +20.84%

      • CAC: (2.10%)

      • MIB: +13.41%

      • Stoxx 600: +7.40%