Jan 20 ,2025
Synopsis
European equity markets set to open mixed after last week's gains when the STOXX Europe 600 closed up +2.4%. There was a more notable performance from FTSE 100 and DAX which both posted fresh all-time highs, up 3.1% and 3.4% respectively. Performance driven by benign UK and US core inflation which kept potential Fed rate cuts on the table and spurred more aggressive repricing of BoE easing bets. Positive luxury sector earnings were also supportive.
US markets closed on Monday for the MLK Jr. Day holiday and then ramp heavily into peak earnings flow on Tuesday through the rest of the week. Also note that today, Donald Trump will be sworn in for his second term as US president just before 12:00 EST in Washington DC.
This week in Europe sees World Economic Forum (Davos), Bundesbank monthly report, Norway central bank interest rate decision, Eurozone, France, Germany and UK Jan preliminary manufacturing/services PMIs as well as earnings from Associated British Foods (ABF.LN), Ericsson (ERIC.B.SS), Givaudan (GIVN.SW), Investor (INVE.B.SS), Porsche (P911.GR) and Swedbank (SWED.A.SS).
On today's agenda: Eurogroup meeting, ECB's Lagarde and Cipollone among the attendees and European Banking Authority (EBA) presentation of details of the 2025 bank stress test (draft consultation 5-Jul-24). EU's Ribera speaks at 9:00CET at event hosted by Forum Europa (livestream). Chancellor Scholz in online discussion at 19:30CET with Verdi Chairman Werneke on the federal election. UK parliamentary committee business includes public charge points for electric vehicles at 15:30GMT. In central banks, Poland central bank MPC minutes at 14:00CET and Croatia National Bank's Vujčić speech at 15:00CET at LC-MA Forum. Also, Austria central bank's Holzmann speech at 15:30CET.
European macro data releases include Germany Dec PPI, Switzerland Dec PPI, Eurozone Nov construction output
On the corporate front, PostNL (PNL.NA) reports preliminary FY normalised EBIT €53M vs FactSet €63.7M and says 2024 turned out to be an unsatisfactory year from a financial perspective. Schindler Holding (SCHP.SW) proposes Josef Ming as chairman; Paolo Compagna will assume the CEO role as of 1-Feb; reaffirms 2024 guidance. In M&A, Kantar Group to sell Kantar Media to H.I.G. Capital for $1B; recall WPP (WPP.LN) owns a 40% stake in Kantar Group. FT reports Santander (SAN.SM) considering leaving the UK.
Politics/Macro/World News
Trump/tariffs
Trump promises blizzard of executive orders ahead of inauguration as 47th US president -- BBC
EU gears up for tariffs and Ukraine peace plans on Trump's first day -- FT
UK government 'doesn't think' Donald Trump will impose trade tariffs on UK - but is 'prepared for all scenarios' -- Sky News , citing cabinet minister
UK Jan house price index +1.8% y/y vs prior +1.4%; +1.7% m/m - Estate Agent Today citing Rightmove
Top company news
Earnings/updates
PNL.NA (PostNL) -- reports preliminary FY normalised EBIT €53M vs FactSet €63.7M [5 est, €49.6-77.1M]
SCHN.SW (Schindler Holding) -- proposes Josef Ming as chairman; Paolo Compagna will assume the CEO role as of 1-Feb; reaffirms 2024 guidance
BEAN.SW (BELIMO Holding) -- reports FY net sales CHF943.9M vs FactSet CHF934.6M
IFCN.SW (Inficon Holding) -- reports preliminary FY revenue $671M vs FactSet $669.3M [11 est, $660.6-696.3M]
TFBANK.SS (TF Bank) -- reports Q4 adjusted EPS SEK6.23 vs FactSet SEK6.38 [3 est, SEK6.09-6.56]; confirms one-off FY24 dividend of SEK 5.00/share linked to divestment of a majority stake in Rediem Capital AB
Also reporting today
Trading Update:
France: Oeneo (SBT.FP), Nacon (NACON.FP)
UK: Alphawave IP Group (AWE.LN), Midwich Group (MIDW.LN)
M&A
BP.LN (BP) -- Shareholders increasingly frustrated with BP CEO Murray Auchincloss - Mail on Sunday
RIO.AU (Rio Tinto) -- to create standalone lithium division after it closes Arcadium Lithium acquisition - Reuters
WPP.LN (WPP Group) -- Kantar Group to sell Kantar Media to H.I.G. Capital for $1B (£822.1M) (17-Jan, timing uncertain)
SAN.SM (Banco Santander) -- Noting lower returns there vs other markets, Banco Santander thinks about leaving UK - FT
LHA.GR (Deutsche Lufthansa) -- completes acquisition of 41% stake in ITA Airways
G.IM (Assicurazioni Generali) -- Generali's investment committee approves planned asset management deal with Natixis - Reuters, citing sources close to the matter
MBTN.SW (Meyer Burger Technology) -- amends credit facility
ICAD.FP (Icade) -- and Predica announce share swap agreement for ~€30M
PCO.PW (Pepco Group) -- hires advisers to explore options for Poundland - Sky News
TikTok
Perplexity AI proposes to merge with TikTok U.S. - CNBC
Perplexity AI puts in bid to merge with TikTok - CNBC
Trump to sign executive order to delay TikTok ban - Truth Social
TikTok to resume service after Trump vows to extend deadline for sale - Bloomberg, citing company statement
Healthcare
AZN.LN (AstraZeneca) -- FDA approves Datroway for HR-positive, HER2-negative breast cancer
AZN.LN (AstraZeneca) -- Follow-up: FDA approves Datroway for HR-positive, HER2-negative breast cancer
INDV.LN (Indivior) -- SEC filing: SCHEDULE 13D/A (Filed by Two Seas Capital LP)
4578.JP (Otsuka Holdings) -- and Lundbeck's ABILIFY ASIMTUFII approved by Health Canada
FYB.GR (Formycon) -- receives EU approval for FYB203 (aflibercept) for treatment of neovascular age-related macular degeneration
ATORX.SS (Alligator Bioscience) -- announces final terms of rights issue
Other
MBG.GR (Mercedes-Benz Group) -- Mercedes-Benz urges EU to drop punitive tariffs on Chinese EVs and to encourage Chinese carmakers to open more plants in the EU - FT, citing CEO
TEF.SM (Telefonica) -- appoints Marc Murtra as Executive Chairman
TEF.SM (Telefonica) -- board to hold extraordinary meeting to replace Jose Maria Alvarez-Pallete as CEO - El Confidencial
EDEN.FP (Edenred) -- enters into additional share buyback agreement for up to €50M
CBK.GR (Commerzbank) -- Under pressure to increase returns, Commerzbank considering cutting thousands of jobs - FT
IDR.SM (Indra Sistemas) -- Chair Marc Mutra formally resigns after accepting Executive Chair position at Telefonica
Estimated weekend box office revenues in US, Canada $76.2M, +16.7% y/y - Box Office Mojo
Key rating changes
Upgrades
ANTO.LN (Antofagasta) -- to hold from reduce at Peel Hunt
GETI.B.SS (Getinge) -- to buy from hold at Pareto
PETS.LN (Pets At Home Group) -- to buy from add at Peel Hunt
BYG.LN (Big Yellow Group) -- to buy from hold at Jefferies
BLND.LN (British Land Co.) -- to hold from underperform at Jefferies
SPX.LN (Spirax Group) -- to buy from hold at Jefferies
Downgrades
GRI.LN (Grainger) -- to hold from add at Peel Hunt
MUV2.GR (Munich Re) -- to neutral from outperform at Mediobanca
SAMPO.FH (Sampo) -- to neutral from outperform at Mediobanca
MAERSK.B.DC (Maersk) -- downgraded to hold from buy at Jefferies
Jefferies downgrades JDG.LN, SMIN.LN, XPP.LN to hold from buy
Data
Nikkei +1.17% to 38902.50
Hang Seng +1.73% to 19923.84
Shanghai Composite (0.03%) to 3240.79
S&P futures +1.0 vs prior close of 6033.5
€-$ +0.0030 or +0.30% to 1.0312
$-¥ (0.11) or (0.07%) to 156.19
€-¥ +0.41 or +0.26% to 161.06
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