Jan 27 ,2025
Synopsis
European equity markets set to decline at the open, tracking losses across Asian markets. Steep losses among Japan semis in Monday trade with Nasdaq futures under pressure. China AI startup DeepSeek getting more attention after unveiling low cost, open-source LLM using older model NVDA chips that it claimed performed as well as OpenAI's o1. Press takeaways noted development called into question extent of US spending on AI system design (and implications for NVDA AI chip demand), as well as China's technological breakthrough against US restrictions.
Last week, Europe's leading equity markets posted further gains. The Stoxx Europe 600 rose +1.2%; saw gains for the fifth consecutive week, reaching fresh all-time highs. Performance was almost entirely contingent on Trump's return to the White House. On his first day, Trump abstained from imposing tariffs but analysts suggested major plans could be announced on 1-Apr, as federal agencies are expected to complete reviews of a range of trade issues.
The week ahead in Europe sees ECB and Riksbank interest rate decisions, Q4 preliminary GDPs and Jan preliminary CPIs from across the region, Germany Jan unemployment change, as well as earnings from heavyweights including ASML (ASML.NA), Atlas Copco (ATCO.A.SS), LVMH Moet Hennessy Louis Vuitton (MC.FP), Novartis (NOVN.SW), Roche (ROG.SW), SAP (SAP.GR), Sanofi (SAN.FP) and Shell (SHEL.LN). In the US, on Wed there's Fed interest rate decision after EU close. USA MAG 7 names in focus with MSFT, META, TSLA, and AAPL reporting this week.
European macro data releases out today include Germany Jan Ifo survey, Sweden Dec trade balance, Norway Dec unemployment rate, Denmark Dec retail sales
Also on today's agenda:, 10th Lamfalussy Lectures Conf with ECB's Lagarde speech at 9:00CET, Slovakia central bank's Kažimír panellist at 11:50, Croatia central bank's Vujčić, Austria central bank's Holzmann panellists at 15:00CET. Other central bank events include BOE's Benford speech at 9:40GMT at City & Financial's Global AI Regulation Summit and Bundesbank's Theurer speech at 14:30CET title 'Economic policy environment and current risk situation in the German banking sector' at event hosted by BaFin/Bundesbank. ECB's Lagarde remarks at 16:35CET at commemorative event on the occasion of International Holocaust Remembrance Day. Also today, Chancellor Scholz and Poland's PM Tusk hold a bilateral meeting; Scholz in Poland to participate in the commemoration of the 80th annv. of the liberation of the Auschwitz concentration camp. EU Agriculture and Fisheries Council as well as EU's Foreign Affairs Council meetings take place.
In corporate highlights, BASF (BAS.GR) announced preliminary results for FY2024; expects EBITDA before special items €7.9B vs FactSet €7.88B; EBIT expected to be €2.0B, which is below the analyst consensus for 2024 (Vara: €3.2B); main reasons for the deviation from the analyst consensus are non-cash-effective impairments, primarily on battery materials in the Surface Technologies segment, as well as restructuring costs in all segments. Ryanair (RYA.ID) reports Q3 net income attributable €148.6M vs StreetAccount €40.9M. Cautiously guiding FY25 net income in a range of €1.55-1.61B; FactSet net income consensus €1.51B. Lowers FY26 traffic target to +3% y/y, cites delay in new B737 deliveries. Analysts at Goodbody comment this is a strong update from Ryanair. Revenue trends continued to improve in Q3 while unit costs were slightly lower y/y. Firm says FY25 consensus should increase by mid-single digits. Furthermore, FY26 consensus also expected to be upgraded by mid-single digits. In M&A, Bureau Veritas (BVI.FP) and SGS (SGSN.SW) announce discussions regarding a potential business combination did not result in an agreement and have ended developments. Diversified Energy (DEC.LN) is in advanced talks to buy Maverick Natural Resources, according to a media report. Diageo (DGE.LN) not considering selling Guinness or stake in Moet Hennessy, reports Reuters citing a company statement. BHP (BHP.AU) cooling on idea of buying Anglo American (AAL.LN), reports the FT. WH Smith (SMWH.LN) is in talks to sell its high street operation, as per Sky News.
Politics/Macro/World News
Top company news
Earnings/updates
BAS.GR (BASF SE) -- announces preliminary results for FY2024; expects EBITDA before special items €7.9B vs FactSet €7.88B; sales for the full year 2024 are expected to be €65.3B vs FactSet €65.35B; EBIT expected to be €2.0B, which is below the analyst consensus for 2024 (Vara: €3.2B); he main reasons for the deviation from the analyst consensus are non-cash-effective impairments, primarily on battery materials in the Surface Technologies segment, as well as restructuring costs in all segments.
RYA.ID (Ryanair Holdings) -- reports Q3 EPS €0.1360 vs StreetAccount €0.05; lowers FY26 traffic target to +3% y/y, cites delay in new B737 deliveries; Cautiously guiding PAT in a range of €1.55-1.61B; FactSet net income consensus €1.51B
STM.GR (Stabilus) -- reports Q1 net income €14.3M vs FactSet €12.2M [1 est]
Also reporting today
Earnings: Note (NOTE.SS)
Trading Update: ID Logistics (IDL.FP), secunet Security Networks (YSN.GR), Lumibird (LBIRD.FP)
CMD/events: Airbus (AIR.FP) Helicopters, orders and deliveries 2024 press conf 10:00CET
M&A
BVI.FP (Bureau Veritas) -- and SGS announce discussions regarding a potential business combination did not result in an agreement and have ended
DEC.LN (Diversified Energy Co.) -- Diversified Energy in advanced talks to buy Maverick Natural Resources - media report
DGE.LN (Diageo) -- not considering selling Guinness or stake in Moet Hennessy - Reuters
AAL.LN (Anglo American) -- BHP cooling on idea of buying Anglo American - FT
VNA.GR (Vonovia) -- shareholders approve domination and profit and loss transfer agreement with Deutsche Wohnen
SMWH.LN (WH Smith) -- in talks to sell its high street operation - Sky News
MB.IM (Mediobanca) -- board to discuss MPS offer 28-Jan - Reuters, citing person close to the situation
Trump administration working on plan for Oracle, other investors to control TikTok - NPR
TAP privatization will require hub to remain in Lisbon - TSF
Healthcare
AMGN (Amgen) -- and Celltrion reach settlement agreement for denosumab biosimilar candidates; launch by 1-Jun-2025
SRPT (Sarepta Therapeutics) -- presents topline results from Part 2 of Phase 3 EMBARK study of ELEVIDYS; conference call at 08:30 ET
4523.JP (Eisai) -- FDA approves Eisai's LEQEMBI IV maintenance dosing for treatment of early AD
IPH.FP (Innate Pharma) -- First patient dosed in Phase 1 study investigating the safety and tolerability of IPH4502
MDG1.GR (Medigene) -- exercises first tranche of standby equity purchase agreement
Other
BT.A.LN (BT Group) -- BT CEO Allison Kirkby helped arrange Sunil Bharti Mittal's purchase of Patrick Drahi's 24.5% stake - Mail on Sunday
KALMAR.FH (Kalmar) -- Index changes: Kalmar to be added to OMX Helsinki 25 Index; effective 3-Feb-25; Metsä Board will be removed
LDO.IM (Leonardo) -- signs MoU in the Kingdom of Saudi Arabia to expand collaboration in the aerospace and defence sector
BAER.SW (Julius Baer Group) -- Chairman of the board Romeo Lacher will not stand for re-election at the Annual General Meeting of 10-Apr-25
PSM.GR (ProSiebenSat.1 Media) -- announces chairman Andreas Wiele will not stand for re-election; board initiates search for successor
RECSI.NO (REC Silicon) -- announces close of a $40M Term Loan and termination of Granular Polysilicon Supply agreement
Estimated weekend box office revenues in US, Canada $65.9M, +20.9% y/y - Box Office Mojo
Universal Music Group and Spotify strike a new multi-year agreement
Key rating changes
Upgrades
PNDORA.DC (Pandora) -- to buy from hold at Jefferies
LGEN.LN (Legal & General) -- to buy from hold at HSBC
ELK.NO (Elkem) -- to buy from hold at DnB Markets
GIVN.SW (Givaudan) -- to overweight from neutral at JPMorgan
GLE.FP (Societe Generale) -- to overweight from equal weight at Barclays
MC.FP (LVMH Moet Hennessy Louis Vuitton) -- to overweight from equal-weight at Morgan Stanley
NEM.GR (Nemetschek) -- to buy from neutral at Goldman Sachs
SCATC.NO (Scatec) -- to buy from hold at DnB Markets
DnB Markets upgrades 2020.NO, SB
Downgrades
ERIC.B.SS (Telefonaktiebolaget LM Ericsson) -- to hold from buy at DnB Markets
LR.FP (Legrand) -- to underperform from hold at Jefferies
ETE.GA (National Bank of Greece) -- to hold from buy at HSBC
JD.LN (JD Sports Fashion) -- to neutral from outperform at BNP Paribas Exane
DLG.LN (Direct Line Insurance Group) -- to neutral from buy at UBS
BOSS.GR (Hugo Boss) -- to hold from buy at Jefferies
UQA.AV (UNIQA Insurance Group) -- to sell from neutral at UBS
Both
ALLEI.SS (Alleima) -- downgraded to hold from buy at Carnegie Securities; upgraded to buy from hold at SEB
Other
SWED.A.SS (Swedbank) -- Dagens Industri out with buy recommendation for Swedbank
Data
Nikkei (0.92%) to 39565.80
Hang Seng +0.75% to 20216.75
Shanghai Composite +0.06% to 3254.47
S&P futures (86.5) vs prior close of 6133.3
€-$ (0.0020) or (0.19%) to 1.0464
$-¥ +0.22 or +0.14% to 155.94
€-¥ (0.10) or (0.06%) to 163.12
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