Jan 20 ,2025
Synopsis:
European equity markets closed mostly higher with Ireland +0.8% and Germany +0.5% leading outperformers. Markets getting a lift from reports suggesting President-elect Trump plans to initiate a comprehensive review of US trade policies without immediately imposing new tariffs.
Not much new on central bank policy. ECB's Schnabel backed further rate cuts in a weekend interview, though remarks align with a cautious approach. Holzmann managed expectations, suggesting January cut not a foregone conclusion. Meanwhile, China kept 1Y and 5Y LPRs unchanged as expected. Government's shift to looser policy stance and dovish comments from PBOC Governor Pan late 2024 have fanned rate cut speculation, albeit yuan weakness has been mentioned as an impediment while press have recently highlighted Xi's desire for FX stability.
In other developments, UK Treasury minister Jones talked up the potential for a US trade deal in a weekend interview, arguing that the UK could dodge Trump's pledge for a 20% tax on all imports due to not being in trade deficit with the US (BBC). Jones said the government has prepared for all scenarios and PM Starmer has held a series of secret "mini cabinet" meetings to plan for what might come.
From a macroeconomic calendar perspective, German PPI came slightly weaker than forecast. Elsewhere, update from UK property portal Rightmove said asking prices rising at record rate for start of the year. Also in the UK, Deloitte survey showed unchanged consumer confidence quarter on quarter, but improved optimism about personal finances. Macro schedule picks up tomorrow with this week's World Economic Forum in Davos to generate headlines and macro data tomorrow to include UK labour market update.
In corporate news, PostNL (PNL.NA) shares traded lower after posting preliminary FY numbers below expectations. In the DACH region, Hypoport (HYQ.GR) reported Q4 total mortgage finance transaction volume on Europace €17.8B vs year-ago €12.7B. Inficon Holding (IFCN.SW) preliminary FY revenue $671M vs FactSet $669.3M and BELIMO Holding (BEAN.SW) FY net sales CHF943.9M vs FactSet CHF934.6M. In the UK, Reach (RCH.LN) said trading in Q4 was strong; now expects to deliver results ahead of current market expectations for FY. Capital (CAPD.LN) posted FY revenue $348.0M vs prior guidance $355-375M. Bango (BGO.LN) issued a trading update and announced new CFO.
Elsewhere, Commerzbank (CBK.GR) is considering cutting thousands of jobs to block Unicredit (UCG.IM) takeover. Telefonica (TEF.SM) appoints Marc Murtra as Executive Chairman, replacing Jose Maria Alvarez-Pallete. Also in Spain, Santander (SAN.SM) is mulling exiting the UK, citing lower returns. On M&A front, HSBC (HSBA.LN) reportedly explores potential sale of Australian consumer banking business.
Digest:
Sectors - STOXX Europe 600:
Outperformers
Basic Resources +1.26%, Autos & Parts +1.23%, Banks +0.77%, Chemicals +0.76%, Travel & Leisure +0.64%, Technology +0.60%, Construct & Mtls +0.58%, Ind Goods & Svcs +0.52%, Financial Svcs +0.36%, Media +0.31%, Food & Beverage +0.23%
Underperformers
Utilities (0.98%), Oil & Gas (0.84%), Health Care (0.71%), Real Estate(0.70%), Insurance (0.53%), Retail (0.42%), Persnl & HHold Goods (0.17%), Telecom (0.03%)
Macro/Peripheral markets:
EU
UK
UK housing market starts 2025 with surge in new listings and price growth - Guardian
UK workers face 15 years of wage stagnation, risking further economic decline - Telegraph
MPs question value of UK's new cost-saving office - FT, Bloomberg
UK labour market tsar urges action on sham self-employment to ensure workers' rights reform success - FT
Lord mayor calls for stamp duty reform to boost UK investment and competitiveness - Telegraph
Reeves to meet US financiers as Trump presidency kicks off - Sky
Rightmove House Price Index January 2025- release
UK government rejects attempt to block EU law in Northern Ireland - FT
Germany
Spain
Sanchez's bold moves rattle Spanish business landscape ahead of Davos - Bloomberg
Austria
Austria's central bank chief: Don't fear the far right - Politico
Ireland
Fine Gael expected to ratify Programme for Government - RTE
Company news:
Notable Gainers
+20.7% RCH.LN (Reach £0.87, +0.15) -- trading update
+15.8% POXEL.FP (Poxel €0.25, +0.03) -- to receive sales-based payment and higher level of royalties from Sumitomo Pharma in Q1 for TWYMEEG
+10.4% NEM.GR (Nemetschek €108.40, +10.20) -- prelim FY earnings
+8.2% XLM.LN (XLMedia £0.11, +0.01) -- proposed initial return of up to £16.0M to shareholders
+8.1% HYQ.GR (Hypoport €201.20, +15.10) -- business update
+7.6% CBRAIN.DC (cBrain DKK199.40, +14.00) -- raises FY guidance
+6.6% FAGR.BB (Fagron €18.18, +1.12) -- Kepler Cheuvreux upgrade
+5.8% ENGCON.B.SS (engcon SEK101.40, +5.60) -- Handelsbanken upgrade
+4.1% NEXT.NO (Next Biometrics Group NOK6.56, +0.26) -- signs a MoU with a new partner in India
+4.1% HOME.SM (Neinor Homes €16.90, +0.66) -- trading update
+3.4% XPP.LN (XP Power £13.44, +0.44) -- Jefferies downgrade
+3.3% JDG.LN (Judges Scientific £76.00, +2.40) -- trading update
+3.1% METSB.FH (Metsa Board €4.57, +0.14) -- UBS upgrade
+3.1% ORX.SS (Orexo SEK19.36, +0.58) -- converts future rights for OX-MPI to shares in Gesynta Pharma valued at SEK 19M
+3.0% REG1V.FH (Revenio Group €29.02, +0.84) -- Carnegie Securities upgrade
+2.8% YPSN.SW (Ypsomed Holding CHF351.50, +9.50) -- UBS upgrade
+2.8% HEX.NO (Hexagon Composites NOK42.60, +1.15) -- exclusive long-term agreement with Certarus
+2.8% IDR.SM (Indra Sistemas €18.56, +0.50) -- new Chair
+2.6% WG.LN (John Wood Group £0.70, +0.02) -- contract
+2.6% DOV.IM (doValue €1.37, +0.03) -- two new mandates in the Hellenic region for €1.6B in gross book value
+2.4% EPRO.B.SS (Electrolux Professional SEK71.60, +1.70) -- Kepler Cheuvreux upgrade
+2.1% HEXA.B.SS (Hexagon SEK115.30, +2.35) -- new CEO
+1.8% BEAN.SW (BELIMO Holding CHF654.00, +11.50) -- FY sales
+1.6% CER.LN (Cerillion £16.05, +0.25) -- contract
+1.4% BGO.LN (Bango £1.09, +0.02) -- trading update; new CFO; initiated buy at Canaccord Genuity
Notable Decliners
-34.1% PODP.LN (Pod Point Group Holdings £0.11, -0.06) -- trading update
-17.6% PPS.LN (Proton Motor Power Systems £0.00, -0.00) -- to seek shareholder approval for proposed AIM cancellation on 7-Feb
-11.1% SDG.LN (Sanderson Design Group £0.48, -0.06) -- trading update
-10.4% CAPD.LN (Capital £0.74, -0.09) -- trading update
-9.7% CLIG.LN (City of London Investment Group £3.43, -0.37) -- trading update
-9.0% SEYE.SS (Smart Eye SEK51.70, -5.10) -- founder and CEO, Martin Krantz, sold ~53K shares
-7.4% FPIP.SS (FormPipe Software SEK23.70, -1.90) -- trading update
-5.8% PNL.NA (PostNL €0.98, -0.06) -- prelim FY earnings
-5.6% NEWA.B.SS (New Wave Group SEK97.00, -5.70) -- Kepler Cheuvreux downgrade
-4.9% AFC.LN (AFC Energy £0.09, -0.00) -- new CFO
-3.3% ENR.GR (Siemens Energy €50.20, -1.70) -- UBS downgrade
-3.1% KCR.FH (Konecranes €60.05, -1.90) -- new CEO
-2.7% TEF.SM (Telefonica €3.86, -0.11) -- new Chairman
-2.4% MIDW.LN (Midwich Group £2.80, -0.07) -- trading update; Panmure Liberum downgrade
-2.2% ARJO.B.SS (Arjo SEK36.52, -0.82) -- appoints Christofer Carlsson as interim CFO
-2.0% GRI.LN (Grainger £2.16, -0.04) -- Peel Hunt downgrade
-1.4% TFBANK.SS (TF Bank SEK409.00, -6.00) -- Q4 earnings
-1.3% FORTUM.FH (Fortum €13.47, -0.17) -- Deutsche Bank downgrade
-1.3% STR.AV (STRABAG SE €41.95, -0.55) -- CEO passes away
EU companies reporting tomorrow:
Earnings:
Avanza Bank (AZA.SS), Gigante Salmon (GIGA.NO), Shoe Zone (SHOE.LN), Ilika (IKA.LN)
Data:
Economics:
Germany Dec PPI +0.8% y/y vs consensus +1.1% and prior +0.1%
Switzerland Dec PPI (0.9%) y/y vs consensus (0.7%) and prior (1.5%)
Spain Nov Trade Balance (€5.13B) vs consensus (€4.2B) and prior (€3.93B)
Eurozone Nov Construction Output +1.4% y/y vs consensus +0.6% and prior revised 0.0% from +0.2%
Markets:
WTI Crude (Feb 25): ($1.27) or (1.63%) to $76.61
€-$ +0.0121 or +1.18% to 1.0403
£-$ +0.0128 or +1.05% to 1.2302
€-£ +0.0017 to 0.8456
S&P 500 +0.00%
Performance year-to-date
FTSE 100: +4.27%
DAX: +5.50%
CAC: +4.76%
MIB: +5.90%
Stoxx 600: +3.24%
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