EUROPEAN EQUITY UPDATE: Stocks mostly firmer on constructive geopolitical updates ahead of US PPI

STOXX 600: +0.3%

• European bourses hold a strong positive bias as market digest the constructive commentary from Trump surrounding the potential of Russia-Ukraine peace talks (details below).


• The complex has waned off the morning’s highs (but still mostly firmer) , potentially as traders look ahead to the US PPI and then President Trump who is set to sign executive orders at 18:00 GMT.


• The EZ-docket today has been fairly light; German CPI (Finals) were unrevised. Ahead, EZ Industrial Production and speak from ECB’s Nagel.

Sectors: Positive

• European sectors hold a strong positive bias, with the clear winners/losers associated with recent remarks out of the US, from Trump and House Speaker Johnson.


• Autos takes the top spot, lifted by commentary via House Speaker Johnson who said he believes the White House is considering exemptions to reciprocal tariffs including autos. Further to this, the sector is getting a boost from the positive risk sentiment today.


• Industrials, and in particular Defence, began the European on the backfoot and was in fact amongst the underperformers. The downside can be attributed to comments via President Trump who said "I just had a lengthy and highly productive phone call with President Vladimir Putin of Russia… agreed to have our respective teams start negotiations immediately, and we will begin by calling President Zelenskyy". However, companies such as Rheinmetall (U/C) has almost entirely pared its initial downside, potentially as traders focus on comments via US Defense Secretary Hagseth who called for higher defence spending.


• The Energy sector has been weighed on by optimism surrounding Russia/Ukraine peace talks.

Others: DAX 40 +1.2%, CAC 40 +0.9%, FTSE 100 -0.8%

• The DAX 40 is on a stronger footing today, in-line with peers. Commerzbank (-0.6%) is one of the worst performers within the index; the bank beat on its metrics, and raised its 2027 targets – it also announced a 3.7k job cut plan. Delivery Hero (+6.5%) jumped higher at the open after strong results and noted that it achieved positive FCF for the first time. Siemens (+5.9%) tops the index after its Q1 results, which were strong and with FY comp. revenue topping expectations. Thyssenkrupp (+10%) also soared at the open after its Q1 loss narrowed and saw improved orders, but it did cut its outlook.


• The CAC 40 is on a firmer footing; tyre-maker Michelin (+5%) tops the pile after its FY results, with Orange (+2%) also gaining post-earnings. Sanofi (+0.1%) is subdued today (relative to peers) after it recorded an impairment charge before tax of USD 250mln in the Q4 2024 IFRS results, after discontinuing a study.


• The FTSE 100 is the clear underperformer in Europe today, weighed on by a few post-earning losers as well as the recent slump in oil prices. Starting with stock specifics, Unilever (-6%) headed lower at the open after it reported in-line results, but anticipates a slower start to 2025 with subdued market growth in the near term. A EUR 1.5bln share buyback failed to impress. Elsewhere, Barclays (-5%) is on the backfoot despite reporting strong results; focus may be on the credit impairment charges of GBP 2bln. Elsewhere, tobacco names are lower after British American Tobacco results (-8%) – it missed on FY revenue. Energy companies like Shell (-2.5%) and BP (-1.4%) are lower today, following the aforementioned Trump comments re. Russia/Ukraine. On the data front, stronger-than-expected GDP metrics (which has lifted the Pound), may also be playing a factor for the poor performance in the index.

US Equity Futures: ES -0.1%, NQ -0.1%, RTY -0.1%

• Futures are modestly lower across the board, despite a stronger session in Europe, but ahead of key risks events which include US PPI and President Trump who is set to sign executive orders at 13:00 EST / 18:00 GMT.


• The US day sees the release of weekly initial jobless claims (215k expected vs the prior 219k) and continuing claims (1.88mln expected vs the prior 1.886mln) - neither coincide with the BLS survey window for the February jobs data. PPI for January is expected to pare to 3.2% Y/Y from 3.3%, while the core rate is seen paring to 3.3% Y/Y from 3.5%.

13 Feb 2025 - 09:55- EquitiesData- Source: Newsquawk