Jan 29 ,2025
Synopsis:
European equity markets finished mostly higher. French CAC lower on corporate earnings, but other leading indices higher. Tech, telecom and retail the best performers. Luxury, food & beverage, chemicals and real estate the biggest decliners. Follows Tuesday's firmer close. Asian markets mostly higher in quiet overnight trading with Japan the standout, up over 1%. Several markets, including China, closed for holiday. US equities lower in midday trading. Treasuries mixed with a touch of curve flattening. Gilts up 4bps to 4.66%. Bund up 1bp at 2.57%. Dollar lower versus yen but higher elsewhere. Gold slightly higher. Bitcoin futures up. WTI crude ~1% lower. Industrial metals higher.
Riksbank cut rates by 25 bps to 2.25%, as expected, amid lower services price pressures and moderate wage negotiations. However, the central bank suggested this could be the final reduction in its current easing cycle whereas analysts broadly expect another cut in May. ECB is widely expected to cut rates by 25 bps on Thursday to take the deposit rate to 2.75% and market sees three more reductions to take key rate to 2%. President Lagarde recently highlighted neutral rate between 1.75% and 2.25%. Potential for more aggressive rate cut scenario being hedged via the options market. There are big bets on at least one 50 bps move by mid-year.
On the macro data front, German GfK consumer confidence for February deteriorated with headline number at -22.4 versus consensus -20.5 and prior -21.4 revised from -21.3. GfK highlighted that economic and income expectations and willingness to buy suffered losses in January, while willingness to save saw slight increases. Spanish Q4 GDP beat expectations with 0.8% expansion. Italian consumer and business confidence firmer-than-expected. Eurozone money supply growth slows in December to +3.5% y/y vs cons +3.8% and prior +3.8%.
Attention mid morning turned to UK with Chancellor Reeves delivering keynote speech on growth plans. The Chancellor vowed to go further and faster to deliver the government's plan for change to kickstart economic growth. A major part of her plan is the creation of the Oxford-Cambridge Growth Corridor to catalyze growth in science and technology, which is forecast to add £78B to GDP by 2035. She also talked up plans to reduce regulation and red tape and to work with the US and the EU to deepen trade relationships. Reeves also said the government will reform health and disability benefits and will set out plans before the end of March, along with a final report on regulation, and gave her backing to a third runway at Heathrow airport. Attention also on Germany following a fierce debate over migration, which has intensified Germany's snap election campaign, with Chancellor Scholz and conservative frontrunner Merz clashing in Bundestag. Further in Germany, the government slashed its 2025 forecast to +0.3% from +1.1% ahead of the snap election.
Busy day for earnings with LVMH Moet Hennessy Louis Vuitton (MC.FP) reporting mixed FY earnings yesterday after market close, disappointing investors with high expectations following significant beats from Richemont (CFR.SW) and Burberry (BRBY.LN). Still in France, Remy Cointreau (RCO.FP) reported Q3 revenue and confirmed FY24-25 guidance and FY29-30 strategic plan. In Benelux, tech heavyweight ASML Holding (ASML.NA) issued solid Q4 earnings and confirmed FY24 guidance, with the main focus of the print being a solid new bookings number, whilst Akzo Nobel (AKZA.NA) reported Q4 earnings and confirmed FY25 outlook. In Nordics, SEB (SEB.A.SS), Tele2 (TEL2.B.SS), Volvo (VOLV.B.SS), SSAB (SSAB.A.SS) and Trelleborg (TREL.B.SS) released Q4 numbers, with the latter raising dividend by +11% y/y. Out of the DACHs region, Logitech International (LOGN.SW) and Lonza Group (LONN.SW) reported strong Q3/FY earnings. In the UK, AJ Bell (AJB.LN), United Utilities Group (UU.LN), WH Smith (SMWH.LN) and Solidcore Resources (POLYP.LN) are amongst others in the region to update investors with their latest numbers. Further in the UK, Pennon Group (PNN.LN) launched a fully underwritten £490M rights issue and revised dividend policy; group also accepted Ofwat's Final Determination for South West Water and Sutton and East Surrey and will not be seeking a reference to the CMA.
In M&A, American Axle & Mfg Hldgs, Inc makes recommended cash and share offer for Dowlais (DWL.LN); total implied value of the combination £1.16B. Volvo Cars (VOLCAR.B.SS) and Northvolt AB sign share purchase agreement relating to Northvolt's shares in NOVO Energy AB. Stellantis (STLAM.IM) takes full control of eDCT transmission production activities in France and Italy. Ferrovia (FER.SM) announced the completion of the sale of its 50% stake of AGS Airports Holdings Ltd. to AviAlliance UK for ~ £450M, whilst Expansion reported that Telefonica (TEF.SM) is considering potential sales of businesses in Argentina, Peru, and Colombia. Elsewhere, Anglo American (AAL.LN) completed the sale of a minority interest in Jellinbah for A$1.6B.
Digest:
Sectors - STOXX Europe 600:
Outperformers:
Technology +2.40%, Telecom +1.76%, Retail +1.28%, Banks +1.11%, Ind Goods & Svcs +1.03%, Oil & Gas +0.61%, Financial Svcs +0.59%
Underperformers:
Persnl & HHold Goods (1.20%), Food & Beverage (0.75%), Real Estate (0.56%), Chemicals (0.45%), Construct & Mtls (0.19%), Autos & Parts (0.03%), Travel & Leisure +0.05%, Health Care +0.21%, Utilities +0.28%, Basic Resources +0.30%, Insurance +0.34%, Media +0.38%
Macro:
UK:
BoE's Bailey says it's important to raise economic growth rate - wires
Chancellor Reeves outlines growth plan (Treasury)
PM Starmer vows to slash red tape in bid for growth (London Times)
UK immigration outlook set to boost public finances (Telegraph)
ECB:
ECB to cut rates as Europe eyes Trump tariffs (Politico)
Germany:
France:
Budget talks on brink of collapse (Reuters )
EU launches 'simplification' agenda in effort to keep up with US and China (The Guardian )
Peripheral markets:
Spain:
Sweden:
Riksbank cut rates by 0.25% to 2.25%, as expected; sixth straight cut under current phase of its easing cycle; forecasts made in Dec still hold
Central bank cuts policy rate eying weak economy (Reuters )
Switzerland:
Swiss to end EU stock market measures amid improving relations (Bloomberg )
Denmark:
Orders Ships for Greenland After Trump Demands (Bloomberg )
Estonia:
Baltic Sea shipping tax could pay for undersea cable protection, says Estonian minister (Reuters )
Company news:
Notable Gainers
+24.7% BHG.SS (Lightshop SEK26.88, +5.32) -- Q4 EBIT SEK106.7M ex-items vs FactSet SEK86.2M [2 est, SEK84-88.3M]
+13.2% AGL.LN (ANGLE £0.15, +0.02) -- new results for dual analysis of CTC-DNA and ctDNA
+12.1% CLA.B.SS (Cloetta SEK27.62, +2.98) -- Q4 EPS SEK0.55 vs FactSet SEK0.46 [1 est]
+10.9% WINE.LN (Naked Wines £0.50, +0.05) -- trading update; says peak season trading was solid and in line with expectations; cautions on potential inventory liquidation costs impacting EBIT guidance
+10.9% WINE.LN (Naked Wines £0.50, +0.05) -- trading update
+9.9% EMBRAC.B.SS (Embracer Group SEK226.60, +20.30) -- trading update
+7.8% VOLV.B.SS (Volvo SEK310.10, +22.40) -- Q4 EPS SEK5.28 vs FactSet SEK5.29 [10 est, SEK4.73-6.00]
+7.6% LOGN.SW (Logitech International CHF88.94, +6.26) -- Q3 EPS $1.59 ex-items vs FactSet $1.40 [11 est, $1.20-1.65]
+7.5% DWL.LN (Dowlais Group Plc £0.74, +0.05) -- American Axle & Mfg Hldgs, Inc makes recommended cash and share offer for Dowlais; total implied value of the combination £1.16B; cancels buyback
+7.5% PNN.LN (Pennon Group £5.54, +0.39) -- announces acceptance of Ofwat's Final Determination for South West Water and Sutton and East Surrey; launches fully underwritten £490M rights issue; revised dividend policy
+7.4% LDA.SM (Linea Directa Aseguradora €1.22, +0.08) -- FY IFRS17&9 net income €64.2M vs FactSet €57.0M [6 est, €55.4-59.7M]
+7.4% SFL.IM (Safilo Group €1.06, +0.07) -- prelim FY adj EBITDA margin 9.4% vs FactSet ~9.0% comments on FY25 (pose-close 28-Jan)
+6.9% SMWH.LN (WH Smith £12.72, +0.82) -- H1 trading update: group revenue +3% y/y, LFL +3% and const curr. +4%; good start to the financial year
+6.3% FGA.FP (Figeac Aero €6.70, +0.40) -- Q3 revenue €103.0M, +7% vs year-ago €96.6M; 2028 financial targets revised upwards
+6.3% GEMD.LN (Gem Diamonds £0.11, +0.01) -- Q4 Trading Update: all operational metrics for FY24 are within or ahead of the improved revised guidance
+5.9% VICO.SS (Vicore Pharma Holding SEK8.79, +0.49) -- FDA grants Vicore's Buloxibutid fast track designation for idiopathic pulmonary fibrosis
+5.7% NEXT.NO (Next Biometrics Group NOK7.10, +0.38) -- will announce at its Innovation Update that the company is to enter a new market segment with large potential
+5.6% ASML.NA (ASML Holding €682.50, +35.90) -- Q4 EPS €6.85 vs cons €6.72; guides Q1 and hikes divi by ~5%
+5.2% TEL2.B.SS (Tele2 SEK121.20, +5.95) -- Q4 EPS SEK1.39 vs FactSet SEK1.57 [9 est, SEK1.33-2.09]
+5.1% HSP.LN (Hargreaves Services £6.20, +0.30) -- H1 EPS 12.0p vs year-ago 5.1p; appoints Simon Hicks as COO, effective 1-Jun
+4.4% DLG.IM (De'Longhi €34.00, +1.44) -- prelim Q4 revenue €1.27B vs FactSet €1.22B [2 est, €1.18-1.27B]
+4.2% TREL.B.SS (Trelleborg SEK420.60, +16.80) -- Q4 EPS from cont. ops. SEK4.24 ex-items vs FactSet SEK3.83 [6 est, SEK3.58-4.14], raises dividend +11% y/y
+4.0% DOM.SS (Dometic Group SEK57.15, +2.20) -- Q4 adj EPS (SEK0.35) vs FactSet SEK0.33 [4 est, (SEK0.26)-0.86]
+3.5% VBG.B.SS (VBG Group SEK320.50, +11.00) -- acquires Italytec for SEK260M
+3.3% SSAB.A.SS (SSAB SEK51.08, +1.63) -- reports Q4 EPS SEK0.48 vs consensus SEK0.34
+3.2% ECOR.LN (Ecora Resources £0.62, +0.02) -- trading update
+2.8% VOLCAR.B.SS (Volvo Car SEK25.93, +0.70) -- Volvo Cars and Northvolt AB sign share purchase agreement relating to Northvolt's shares in NOVO Energy AB
+2.7% FRES.LN (Fresnillo £6.75, +0.18) -- FY attributable silver production (including Silverstream) of 56.3 moz remained flat vs. FY23 and was in line with guidance (55.0 to 62.0 moz)
+2.0% UU.LN (United Utilities Group £9.99, +0.19) -- accepts Ofwat's final determination; provides Q3 Trading Update
+2.0% NRR.LN (NewRiver REIT £0.73, +0.01) -- Q3 company update: standalone occupancy at 98%, combined portfolio occupancy at 96%
+1.7% STORY.B.SS (Storytel SEK79.30, +1.35) -- one-off compensation of SEK 34.4M from Copyswede
+1.7% PZS.GR (Scherzer & Co. €2.30, +0.04) -- prelim earnings
+1.5% ALDVI.FP (Advicenne €2.00, +0.03) -- US FDA accepts Advicenne proposition of biological primary endpoint for evaluation of ADV7103 in cystinuria
+1.0% TEF.SM (Telefonica €3.95, +0.04) -- weighs sale of Argentine subsidiary - Expansion
Notable Decliners
-13.8% FDM.LN (FDM Group (Holdings) £2.29, -0.37) -- FY Trading Update: revenue £258M vs FactSet £253.3M [5 est, £250-257.8M]; anticipates FY25 financial performance may be below its previous expectations
-10.8% RIEN.SW (Rieter Holding CHF88.20, -10.70) -- prelim. FY revenue CHF859.1M vs guidance CHF900M, FactSet CHF900.2M [5 est, CHF896.4-902.6M]; sees EBIT margin in the upper half of guidance range
-9.1% IWS.NO (Integrated Wind Solutions NOK40.00, -4.00) -- completion of offering in connection with recent uplisting
-7.4% RCO.FP (Remy Cointreau €55.45, -4.40) -- Q3 revenue €254.1M vs consensus €244.5M; FY24-25 guidance and FY29-30 strategic plan confirmed
-6.9% HVO.LN (hVIVO plc £0.19, -0.01) -- FY Trading Update: revenue £62.7M vs FactSet £62.1M [7 est, £61.8-62.2M]
-5.3% CDI.FP (Christian Dior €655.00, -36.50) -- FY net income €5.2B vs year-ago €6.3B
-5.1% EKF.LN (EKF Diagnostics Holdings £0.25, -0.01) -- FY Trading Update: revenue £50.2M vs FactSet £54.2M [1 est]
-5.0% MC.FP (LVMH Moet Hennessy Louis Vuitton €713.20, -37.40) -- FY net income €12.55B vs FactSet €13.52B [24 est, €12.63-14.36B]
-5.0% AKZA.NA (Akzo Nobel €56.92, -3.02) -- Q4 adj. EPS €0.56 vs consensus €0.56
-4.5% MEDCL.FP (MedinCell €16.02, -0.76) -- Q4 Uzedy sales $43M vs quarter-ago $35M
-4.3% R3NK.GR (Renk Group €22.62, -1.02) -- prelim FY adj EBIT €189M vs FactSet €171.4M [10 est, €123.6-186.9M] and guidance range €175 - 190M
-4.2% SEB.A.SS (Skandinaviska Enskilda Banken SEK157.85, -6.95) -- Q4 EPS SEK3.69 vs consensus SEK3.71
-4.1% SAGCV.FH (Saga Furs €9.30, -0.40) -- earnings
-3.9% RPI.LN (Raspberry Pi Holdings £7.12, -0.29) -- FY Trading Update: expects adj EBITDA of not less than $36M vs FactSet $37.9M [2 est, $35-40.9M]
-2.9% DMYD.B.SS (Diamyd Medical SEK17.04, -0.50) -- earnings
-2.7% DGE.LN (Diageo £24.27, -0.68) -- sells 80.4% shareholding in Guinness Ghana Breweries to Castel Group for $81M (28-Jan, seemingly around 14:15 GMT)
-2.6% ELON.SS (Elon AB SEK26.40, -0.70) -- appoints Fredrik Johansson as interim President and CEO
-2.6% DDRIL.NO (Dolphin Drilling AS NOK3.70, -0.10) -- CEO resigns effective immediately
-2.6% LONN.SW (Lonza Group CHF579.00, -15.60) -- FY core EPS CHF15.01 vs consensus CHF14.02
-2.4% ONWD.BB (Onward Medical €6.60, -0.16) -- ARC-EX System for spinal cord injury is now available for purchase through VA Federal Supply Schedule and GSA Advantage platforms
-2.3% CWR.LN (Ceres Power Holdings £1.37, -0.03) -- FY Trading Update: orders intake greater than £110M, revenue at upper end of previous guidance, between £55-60M
-2.0% INRN.SW (Interroll Holding CHF2,200.00, -45.00) -- reports preliminary FY sales CHF527.1M vs FactSet CHF526.2M [6 est, CHF516-535.2M]
-1.6% SFZN.SW (Siegfried Holding CHF1,012.00, -16.00) -- Siegfried wants to target small and medium-sized companies to generate additional growth - FuW
-1.3% ARBN.SW (Arbonia CHF12.38, -0.16) -- sale of the Climate Division to Midea Electrics Netherlands receives EU Commission approval
-1.2% FER.SM (Ferrovial €41.18, -0.50) -- completes the sale of its 50% of AGS Airports Holdings Ltd. to AviAlliance UK for ~ £450M (post EU close 28-Jan)
-1.2% AJB.LN (AJ Bell £4.43, -0.06) -- Q1 trading update; AUA £89.5B, +17% y/y and +3% in the quarter
EU companies reporting tomorrow:
Earnings:
Benelux: Royal KPN (KPN.NA), Warehouses De Pauw (WDP.BB)
DACHs: Roche (ROG.SW), ABB Ltd. (ABBN.SW), Berner Kantonalbank (BEKN.SW), Deutsche Bank (DBK.GR), Dws Group (DWS.GR)
Denmark: Ambu (AMBU.B.DC)
Finland: Nordea Bank (NDA.FI.FH), Kone (KNEBV.FH), Nokia (NOKIA.FH), STMicroelectronics (STMPA.FH),
France: Sanofi (SAN.FP), Eurofins Scientific (ERF.FP), Kaufman & Broad (KOF.FP)
Norway: OKEA (OKEA.NO), Sparebanken More (MORG.NO)
Sweden: Epiroc (EPI.A.SS), H&M Hennes & Mauritz (HM.B.SS), Evolution (EVO.SS), Telia Co. (TELIA.SS), Indutrade (INDT.SS), Axfood (AXFO.SS), Vitrolife (VITR.SS), Electrolux (ELUX.B.SS), Granges (GRNG.SS), Arjo (ARJO.B.SS), RVRC Holding (RVRC.SS), Green Landscaping (GREEN.SS), Intrum (INTRUM.SS), VNV Global (VNV.SS), Enea (ENEA.SS)
Southern Europe: Banco Bilbao Vizcaya Argentaria (BBVA.SM), CaixaBank (CABK.SM)
UK: Shell (SHEL.LN), Airtel Africa (AAF.LN), Wizz Air (WIZZ.LN), Rank Group (RNK.LN), ITM Power (ITM.LN)
Trading Update:
DACHs: Symrise (SY1.GR), Montana Aerospace (AERO.SW), Gurit Holding (GURN.SW)
France: Elis (ELIS.FP), Maurel & Prom (MAU.FP), Wavestone (WAVE.FP), Cegedim (CGM.FP), Vetoquinol (VETO.FP), Linedata Services (LIN.FP), Groupe LDLC (ALLDL.FP)
Southern Europe: Puig Brands (PUIG.SM), Salvatore Ferragamo (SFER.IM)
UK: St. James's Place (STJ.LN), Saga (SAGA.LN)
Production: Glencore (GLEN.LN)
CMD/events: Assicurazioni Generali (G.IM), Arjo (ARJO.B.SS)
Data:
Economics:
Eurozone Dec M3 Money Supply +3.5% y/y vs cons +3.8% and prior +3.8%
Germany Feb GfK Consumer Confidence (22.4) vs cons (20.5) and prior revised (21.4) from (21.3)
Switzerland Jan ZEW Expectations (17.7) vs cons (21) and prior (20.0)
Italy Jan
Business Confidence 86.8 vs cons 85.5 and prior revised 85.9 from 85.8
Consumer Confidence 98.2 vs cons 96.0 and prior 96.3
Sweden Q4 Prelim GDP +1.1% y/y vs cons +1.1% and prior +0.7%; +0.2% q/q vs cons +0.3% and prior +0.3%
Spain Q4 Prelim GDP +3.5% y/y vs cons +3.2% and prior revised +3.5% from +3.3%; +0.8% q/q vs cons +0.6% and prior +0.8%
Belgium Q4 Prelim GDP +1.1% y/y vs cons +1.1% and prior +1.2%; +0.2% q/q vs cons +0.2% and prior +0.3%
Markets:
WTI Crude (Mar 25): ($0.46) or (0.62%) to $73.31
€-$ (0.0013) or (0.13%) to 1.0419
£-$ (0.0011) or (0.09%) to 1.2434
€-£ (0.0003) to 0.8381
S&P 500 (0.35%)
Performance year-to-date
FTSE 100: +4.71%
DAX: +8.68%
CAC: +6.66%
MIB: +6.39%
Stoxx 600: +5.25%
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