Jan 28 ,2025
Synopsis:
European indices continue ended mostly in positive territory Tuesday. France softer. Follows weaker levels on Monday. Among EU sectors, Retail, travel/leisure and telco best performers while basic resources and industrials the biggest decliners.
DeepSeek hype the big talking point after heightening scrutiny on US capex ramp and ROI, as well as US tech AI leadership amid high valuations and concerns about concentration risk
On macro data front, ECB bank lending survey sees tightening in credit conditions, but housing loan demand remains strong, weak appetite from firms. French consumer confidence beat expectations and German Ifo export expectations deteriorate on Trump tariff threat. The Ifo Institute export expectations index fell to -7.3 points in January versus prior -6.1 points due to the threat of tariffs from new Trump administration. Ifo highlighted positive momentum abroad has so far had little impact on domestic exporters, with most industries anticipating a drop in international sales. Update from BRC show UK food prices increase by most in nine months ahead of next week's BoE meeting. SNB Chairman Schlegel, in an interview with SRF, sounded more cautious on prospect of negative rates after signaling possibility for several months.
On a busy earnings calendar, out of DACHs, Sartorius (SRT3.GR), SAP (SAP.GR) and Mercedes-Benz Group (MBG.GR), Siemens Energy AG (ENR.GR), Wacker Chemie (WCH.GR) posted updates. In the UK, Rentokil Initial (RTO.LLN) released an unscheduled trading update with FY 2024 results in line with expectations; Foxtons Group (FOXT.LN) posted FY Trading Update. In France, Alten (ATE.FP), ID Logistics Group (IDL.FP) and Sartorius Stedim Biotech (DIM.FP) have updated investors. In Sweden, Getinge (GETI.B.SS) Q4 earnings topped consensus expectations with order intake also stronger than expected; group also announced intention to phase out Surgical Perfusion product portfolio in 2025. Xvivo Perfusion (XVIVO.SS), HMS Networks (HMS.SS) also higher post Q4 updates.
In M&A, Euronext (ENX.FP) to acquire Nasdaq's (NDAQ) Nordic power futures business for an undisclosed sum. ING (INGA.NA) to sell its business in Russia to Global Development JSC; expects negative P&L impact of ~€0.7B post tax. Irish State places ~5% stake in AIB Group plc (A5G.ID) at €5.60/sh. Reuters reported that KKR & Co. (KKR) and Enel (ENEL.IM) are listed as potential bidders for Cubico Sustainable Investments. The report indicates Cubico could be valued at ~$6B+. Further amidst media reports, Stella McCartney repurchasing minority stake held by LVMH (MC.FP).
Looking ahead to tomorrow's EU econ-calendar, notable releases will include, amongst others, Germany Feb consumer confidence - GfK, Italy Jan business/consumer confidence, Spain Q4 preliminary GDP and Eurozone Dec M3 money supply. Of note, Riksbank interest rate decision is scheduled at 9:30CET, press conf at 11:00.
Digest:
Sectors - STOXX Europe 600:
Outperformers:
Retail +2.22%, Travel & Leisure +1.88%, Telecom +1.41%, Utilities +1.20%, Real Estate +1.19%, Media +1.02%, Food & Beverage +0.96%, Oil & Gas +0.57%, Banks +0.45%, Financial Svcs +0.45%, Chemicals +0.43%, Insurance +0.38%, Construct & Mtls +0.36%,
Underperformers:
Basic Resources (0.74%), Ind Goods & Svcs (0.45%), Autos & Parts (0.10%), Health Care +0.18%, Technology +0.22%, Persnl & HHold Goods +0.25%
Macro:
Central banks:
Bank of England opens New Contingent Non-Bank Lending Facility for applications -- BoE
EU:
Trump's Secretary of State Rubio ghosts Europe -- Politico
UK:
Net migration to push UK population to 72.5M - ONS -- BBC
Germany:
German demand soars for Russian LNG via European ports -- FT
France:
Macron's approval rating sinks to lowest point after disastrous TikTok video -- Telegraph
Italy:
Italy and the United States: A Transatlantic Bond Evolving Through the Years -- The Geopolitics
Spain:
Spain's unemployment rate falls to lowest since 2008 -- Reuters
Company news:
Notable Gainers
+24.3% DIA.LN (Dialight £1.14, +0.22) -- Q3 trading update
+13.5% HFD.LN (Halfords Group £1.43, +0.17) -- FY trading update
+11.5% SRT3.GR (Sartorius €279.00, +28.70) -- FY earnings
+11.4% UPR.ID (Uniphar €2.34, +0.24) -- FY trading update
+11.1% GETI.B.SS (Getinge SEK224.20, +22.40) -- Q4 earnings; announcesintention to phase out surgical perfusion product portfolio in 2025
+11.1% ACSO.LN (accesso Technology Group £5.32, +0.53) -- FY trading update
+10.6% PGH.LN (Personal Group Holdings £1.93, +0.19) -- FY trading update
+10.4% HMS.SS (HMS Networks SEK501.50, +47.30) -- Q4 earnings
+10.0% NSI.NA (NSI NV €21.65, +1.97) -- prelim FY earnings
+8.3% DOTD.LN (dotDigital Group £0.89, +0.07) -- H1 earnings; CFO to step down
+8.0% DIM.FP (Sartorius Stedim Biotech €225.50, +16.70) -- prelim FY earnings
+8.0% KINV.B.SS (Kinnevik SEK86.46, +6.39) -- participated with a $37M investment in portfolio company TravelPerk's recent $200M funding round
+7.6% SFOR.LN (S4 Capital £0.36, +0.03) -- Q4 trading update
+7.4% CCC.LN (Computacenter £22.68, +1.56) -- FY pre-close trading update
+5.6% SYNT.LN (Synthomer £1.58, +0.08) -- FY trading update
+5.6% CTT.SS (CTT Systems SEK283.00, +15.00) -- order
+5.4% PETS.LN (Pets At Home Group £2.22, +0.11) -- Q3 trading update
+5.0% XVIVO.SS (Xvivo Perfusion SEK440.00, +21.00) -- Q4 earnings; Bryan Garnier upgrade
+4.4% SSPG.LN (SSP Group £1.79, +0.08) -- Q1 trading update
+3.8% F3C.GR (SFC Energy €17.36, +0.64) -- order
+3.6% TIT.IM (Telecom Italia €0.27, +0.01) -- Kepler Cheuvreux upgrade
+3.5% ELCO.LN (Eleco £1.47, +0.05) -- FY trading update
+1.6% YCA.LN (Yellow Cake £4.83, +0.08) -- Q4 operating update
+1.5% FOXT.LN (Foxtons Group £0.67, +0.01) -- FY trading update
+1.5% ACTI.SS (Active Biotech SEK0.11, -0.00) -- US Patent Office has granted Active Biotech's US patent application for laquinimod in eye disorders
Notable Decliners
-16.9% NETC.DC (Netcompany Group DKK276.80, -56.20) -- Q4 earnings; defers mid-term revenue target to 2027
-5.7% ECEL.LN (Eurocell £1.49, -0.09) -- FY trading update
-5.6% AGY.LN (Allergy Therapeutics £0.07, -0.00) -- H1 trading update
-5.4% SMHN.GR (SÜSS MicroTec €42.80, -2.45) -- Hauck & Aufhäuser downgrade
-3.5% JLP.LN (Jubilee Metals Group £0.04, -0.00) -- target lowered at RBC
-2.5% BMPS.IM (Banca Monte dei Paschi di Siena €6.21, -0.16) -- Citi downgrade
-2.0% SMIN.LN (Smiths Group £18.45, -0.38) -- reports cyber security incident
-1.9% BOOT.LN (Henry Boot £2.09, -0.04) -- FY trading statement
-1.8% MSAB.B.SS (Micro Systemation SEK54.00, -1.00) -- Q4 earnings
-1.6% STEM.LN (Sthree £2.81, -0.04) -- FY earnings
-1.5% EQT.SS (EQT AB SEK352.60, -5.30) -- Kinnevik announces it has participated with a $37M investment in portfolio company TravelPerk's recent $200M funding round
EU companies reporting tomorrow:
Earnings:
Benelux: ASML Holding (ASML.NA), Akzo Nobel (AKZA.NA)
DACHs: Lonza (LONN.SW), PIERER Mobility (PKTM.SW)
Norway: Borregaard (BRG.NO), Europris (EPR.NO)
Sweden: Volvo (VOLV.B.SS), Skandinaviska Enskilda Banken (SEB.A.SS), Trelleborg (TREL.B.SS), Tele2 (TEL2.B.SS), SSAB (SSAB.B.SS), Dometic (DOM.SS), Cloetta (CLA.B.SS), BHG Group (BHG.SS), Diamyd Medical (DMYD.B.SS)
UK: Hargreaves Services (HSP.LN)
Trading Statement: Remy Cointreau (RCO.FP), Voltalia (VLTSA.FP), Synergie (SDG.FP), Groupe Crit (CEN.FP), Infotel (INF.FP), Solutions 30 (S30.FP), Ecora Resources (ECOR.LN), Gem Diamonds Ltd. (GEMD.LN), AJ Bell (AJB.LN), WH Smith (SMWH.LN), Rieter (RIEN.SW)
Data:
Economics:
Ireland Q4 preliminary GDP +6.3% y/y vs consensus +3.8% and prior +2.9%
Ireland Dec Retail Sales +0.8% y/y vs consensus +2.9% and prior revised (1.1%) from (1.0%)
France Jan Consumer Confidence 92 vs prior revised to 89 from 89
Markets:
WTI Crude (25-Mar): +$0.06 or +0.08% to $73.23
€-$ (0.0066) or (0.63%) to 1.0426
£-$ (0.0066) or (0.53%) to 1.2434
€-£ (0.0008) to 0.8388
S&P 500 (1.07%)
Performance year-to-date:
FTSE 100: +4.42%
DAX: +7.64%
CAC: +7.00%
MIB: +5.74%
Stoxx 600: +4.72%
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