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StreetAccount Summary - EU Market Recap: FTSE 100 +1.09% to 8391.90, DAX +0.39% to 20655.39, CAC40 +2.14% to 7634.74, STOXX 600 +0.98% to 520.05

Jan 16 ,2025

  • Synopsis:

    • European equity markets closed mostly higher Thursday, near best levels, with Stoxx600 at five-week high. Luxury and tech outperformed. Luxury giant Richemont (CFR.SW) reported Q3 organic growth significantly ahead of expectations, with shares climbing~16% and sending positive ripples across the peer space. LVMH (MC.FP) also reacted positively to a broker upgrade. In Tech, AI theme back in focus following results and guidance from TSM

    • US equities mixed in early Thursday trading with S&P flat. Follows sharply higher close Wednesday where S&P 500, Nasdaq, R2K all logged best sessions since the day after Trump's election in November. Softer-than-feared US core inflation the basis for latest risk-on move in equities and sharp pullback in bond yields. Yet, some thoughts rally may be short-lived, as US inflation still too warm for comfort and potentially facing upward pressure if Trump proceeds with tariffs. Fed likely to stay on hold for a while longer. Also boosting sentiment were strong earnings from US banks. Market hoping Bessent confirmation hearing can provide some additional color on Trump 2.0 policies. Some focus also on developments in the Middle East after Israel intensified strikes on Gaza hours after a ceasefire and hostage release deal was announced.

    • In Europe, CAC outperformed (closing up 2.1%) due to luxury sector, but also Socialists said to not support no-confidence vote. ECB's Centeno sees rates declining to ~2% as inflation seen under control. BoE external member Taylor sees increasingly gloomy outlook, justifying more rate cuts. UK property surveyors reported fastest rise in house prices since September 2022. In terms of data, German final inflation for December confirmed at 2.6% versus 2.2% prior. UK GDP for November up 0.1% but industral production softened by 0.4%. Eurozone trade balance for Nov improved to €12.9B v €11.5B expected. In the US, headline December retail sales weaker than consensus and down from November. However, control-group sales stronger. Weekly initial jobless claims came in above consensus. Continuing claims unexpectedly dropped. Very big leap for January Philadelphia Fed manufacturing index.

    • Among other stocks on the move, UK homebuilder Taylor Wimpey (TW.LN) saw its shares drop ~(3%) following its FY trading statement and comments from the conference call. Analysts note more cautious tone regarding margins for 2025. Pearson (PSON.LN), Dunelm (DNLM.LN), Safestore (SAFE.LN), Wise (WISE.LN), Geberit (GEBN.SW), and Whitbread (WTB.LN) also traded lower after their respective earnings/ updates, whilst Zalando (ZAL.GR) and Deliveroo (ROO.LN) saw positive reactions.

  • Digest:

    • Sectors - STOXX Europe 600:

      • Outperformers:

        • Consumer Products and Services +5.85%, Technology +2.05%

      • Underperformers:

        • Autos & Parts (0.52%), Travel & Leisure (0.26%), Retail (0.18%), Energy(0.07%), Basic Resources +0.09%, Telecom +0.32%, Banks +0.22%, Real Estate +0.22%, Construct & Mtls +0.33%, Utilities +0.53%, Food, Beverage and Tobacco +0.59%, Chemicals +0.57%, Health Care +0.71%, Personal Care Drug and Grocery Stores +0.75%, Ind Goods & Svcs +0.83%, Financial Svcs +0.90%, Media +0.91%

    • Macro:

      • Central banks

        • ECB minutes show increasing confidence inflation will return to target in H1 2025 -- link

        • ECB's Centeno sees Eurozone inflation under control, sees scope for rates to decline to ~2% (Bloomberg, Reuters)

        • BoE policymaker warns of potential for five to six rate cuts in 2025 amid economic concerns (FT, Telegraph)

      • Trade

        • European carmakers call for 'grand bargain' with Donald Trump to avoid trade war -- FT

      • France

        • French Socialists will not back no-confidence vote against Bayrou -- Reuters , Le Figaro

      • Denmark

        • Novo Nordisk, other companies meet Danish prime minister following Trump's Greenland threat -- Reuters

      • UK

        • Reeves says she will press regulators to help deliver growth -- Reuters

      • Greece

        • Greece has tapped €18B from EU's Recovery Fund -- ekathimerini

    • Company news:

      • Notable Gainers

        • +16.6% TRST.LN (Trustpilot Group £3.09, +0.46) -- trading update

        • +16.4% CFR.SW (Richemont CHF160.95, +22.75) -- Q3 sales

        • +11.6% AQ.SS (AQ Group SEK155.00, +16.48) -- initiated buy at Carnegie Securities

        • +11.1% CARR.LN (Carr's Group £1.26, +0.13) -- Cadre Holdings (CDRE) to acquire multiple nuclear brands from Carr's Group for enterprise value of £75M cash

        • +9.6% VH2.GR (Friedrich Vorwerk Group €31.10, +2.85) -- prelim FY earnings

        • +9.2% ADN1.GR (adesso €86.00, +7.60) -- Hauck & Aufhäuser upgrade

        • +9.0% MC.FP (LVMH Moet Hennessy Louis Vuitton €685.50, +57.40) -- Richemont sympathy; BofA upgrade

        • +7.5% ZAL.GR (Zalando €33.22, +2.20) -- prelim FY earnings; UBS upgrade

        • +7.5% NIOX.LN (NIOX Group £0.63, +0.04) -- management changes; Panmure Liberum upgrade

        • +7.3% DRW3.GR (Drägerwerk €53.20, +3.60) -- prelim FY earnings

        • +7.2% VAIAS.FH (Vaisala €51.00, +3.40) -- prelim FY earnings

        • +7.0% ARYN.SW (Aryzta CHF1.65, +0.11) -- trading update

        • +6.8% RLE.LN (Real Estate Investors £0.32, +0.02) -- trading update

        • +6.7% PEBB.LN (The Pebble Group £0.47, +0.03) -- trading update

        • +6.6% ROO.LN (Deliveroo £1.36, +0.09) -- trading update

        • +5.7% KER.FP (Kering €240.20, +12.80) -- Richemont sympathy; also contributing three real estate assets to a newly created joint venture with Ardian

        • +5.3% DFCH.LN (Distribution Finance Capital Holdings £0.41, +0.02) -- prelim FY earnings; raises new medium term financial guidance; £5M share buyback

        • +4.8% RMS.FP (Hermes €2,489.00, +113.00) -- Richemont sympathy

        • +4.1% IDIA.SW (Idorsia CHF0.80, +0.03) -- enters royalty monetization agreement with the R-Bridge Healthcare Fund in relation to AGAMREE; NICE has issued positive Final Guidance that recommends AGAMREE for use in NHS in England, Wales and Northern Ireland

        • +4.1% PHLL.LN (Petershill Partners £2.69, +0.11) -- completes sale of majority of its stake in General Catalyst for total nominal consideration of $726M

        • +4.1% ELI.BB (Elia Group SA/NV €65.45, +2.60) -- BofA upgrade

        • +4.0% AVCT.LN (Avacta Group £0.52, +0.02) -- trial data

        • +3.7% BEIJ.B.SS (Beijer Ref SEK163.05, +5.95) -- DnB Markets upgrade

        • +3.5% BAKK.LN (Bakkavor Group £1.52, +0.05) -- trading update

        • +3.3% IRE.IM (Iren €1.96, +0.06) -- Kepler Cheuvreux upgrade

        • +2.8% UHR.SW (Swatch Group CHF166.70, +4.35) -- Richemont sympathy

        • +2.6% MOWI.NO (Mowi NOK210.10, +5.20) -- Q4 harvest

        • +2.6% PMI.LN (Premier Miton Group £0.59, +0.02) -- Q1 AuM

        • +2.6% TTE.FP (TotalEnergies €56.90, +1.48) -- trading update

        • +2.4% ANTO.LN (Antofagasta £17.48, +0.41) -- Q4 production

        • +2.1% RNO.FP (Renault €49.44, +0.98) -- FY car sales

        • +1.9% BA.LN (BAE Systems £12.08, +0.23) -- BNP Paribas Exane upgrade

        • +1.7% YNGA.LN (Young & Co.'s Brewery £8.68, +0.14) -- trading update

        • +1.4% BP.LN (BP £0.00, +0.06) -- to cut ~4,700 staff and 3000 contractor positions as part of previously disclosed plan to cut costs by end of 2026 - Sky News citing company e-mail

      • Notable Decliners

        • -24.0% VBK.GR (Verbio €8.53, -2.64) -- reduces EBITDA forecast for 2024/25

        • -9.8% SAFE.LN (Safestore Holdings £6.33, -0.65) -- FY earnings

        • -8.4% AKH.NO (Aker Horizons NOK1.71, -0.15) -- will not pursue bond offering following fixed income investor meetings

        • -7.7% FAST.NA (Fastned €21.65, -1.80) -- Q4 revenue; updates 2025 guidance

        • -5.2% DNLM.LN (Dunelm Group £10.01, -0.54) -- trading update

        • -5.0% SAFH00.GR (SAF-HOLLAND €14.94, -0.78) -- prelim FY earnings

        • -4.8% JD.LN (JD Sports Fashion £0.91, -0.04) -- UBS downgrade

        • -3.6% ISS.DC (ISS A/S DKK125.90, -4.70) -- BofA downgrade

        • -3.4% TW.LN (Taylor Wimpey £1.10, -0.04) -- trading update

        • -3.2% GEBN.SW (Geberit CHF491.40, -16.40) -- prelim Q4 revenue; expects FY EBITDA margin slightly below the previous year

        • -3.1% NOKIA.FH (Nokia €4.33, -0.14) -- Goldman Sachs downgrade

        • -2.9% FRA.GR (Fraport €54.60, -1.65) -- Dec traffic

        • -2.8% SW.FP (Sodexo €69.80, -2.00) -- BNP Paribas Exane downgrade

        • -2.0% CABP.LN (CAB Payments Holdings £0.63, -0.01) -- trading update

        • -1.8% WISE.LN (Wise Plc £10.27, -0.19) -- trading update

        • -1.7% EZJ.LN (EasyJet £4.94, -0.09) -- Davy downgrade

        • -1.4% REP.SM (Repsol €11.47, -0.17) -- prelim Q4 production

        • -1.2% PSON.LN (Pearson £12.62, -0.15) -- trading update

        • -0.8% ABF.LN (Associated British Foods £19.41, -0.16) -- Citi downgrade

        • -0.6% SGO.FP (Compagnie de Saint-Gobain €84.50, -0.48) -- completes acquisition of OVNIVER Group in Mexico & Central America; UBS downgrade

        • -0.4% VNA.GR (Vonovia €28.06, -0.11) -- BNP Paribas Exane downgrade

    • EU companies reporting tomorrow:

      • Trading Update: Zehnder Group (ZEHN.SW), YOYO (YOYO.DC)

      • Traffic: Flughafen Wien (FLU.AV)

  • Data:

    • Economics:

      • Netherlands Nov Unemployment Rate 3.7% vs consensus 3.8% and prior 3.7%

      • Eurozone Nov Trade Balance €16.4B vs consensus €11.8B and prior revised €8.6B from €6.8B

      • CPI

        • Germany Dec +2.6% y/y vs preliminary +2.6%

        • Italy Dec +1.3% y/y vs preliminary +1.3%

      • UK Nov

        • Visible Trade Balance (£19.31B) vs consensus (£17.9B) and prior revised (£19.33B) from (£18.97B)

        • Industrial Production (1.8%) y/y vs consensus (1.0%) and prior revised (1.1%) from (0.7%)

        • Construction Output +0.2% y/y vs consensus +0.1% and prior revised (0.5%) from (0.7%)

      • Italy Nov Trade Balance €4.22B vs consensus €4.5B and prior €5.15B

    • Markets:

      • WTI Crude (Feb 25): ($1.92) or (2.40%) to $78.12

      • €-$ +0.0021 or +0.21% to 1.0311

      • £-$ +0.0004 or +0.03% to 1.2247

      • €-£ +0.0014 to 0.8419

      • S&P 500 +0.04%

      • Performance year-to-date

        • FTSE 100: +2.68%

        • DAX: +3.75%

        • CAC: +3.44%

        • MIB: +4.71%

        • Stoxx 600: +2.45%

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