
EUROPEAN EQUITY UPDATE: Mixed trade in Europe with sentiment dented by Flash PMIs
STOXX 600: +0.3%
- European bourses opened with a modest positive bias, but sentiment has since slipped a touch, to display a more mixed picture thus far.
- Sentiment in Europe was hit following the release of the French PMI metrics, but the downside largely stabilised after the German and EZ figures.
- Delving into the metrics, the French figures were dire; with Services and Composite metrics printing under the lower end of the forecast range, Manufacturing was in line. The report noted that “Overall, there is little hope to be drawn from the slightly improved index figures, as the outlook for output is still viewed pessimistically and layoffs are commonplace”. Germany’s figures were a little more mixed; Services was incrementally lower than expected, whilst Composite and Manufacturing beat; the release was a little more positive highlighting that “Overall, the economy seems to be back on a growth path”.
- CapEco writes that the EZ PMIs suggest that the figures provide more evidence that the economy remains stagnant in Q1. However, analysts highlight that the prices indices rose, which will support the case for those ECB members who will favour a pause, past the March cut.
Sectors: Positive
- European sectors hold a positive bias, but with the breadth of the market fairly narrow aside from the day’s leader.
- Chemicals tops the pile, lifted by post-earning strength in Air Liquide (+2.9%), which accounts for approx. 31% of the sector. The Co. beat on its Q4 figure and proposed a 13.7% Y/Y raise to its dividend. The co. also lifted its 2025 margin outlook.
- Energy resides at the foot of the pile, given the weakness in oil prices in today’s session; there has been a lack of energy-specific newsflow, but as a reminder, energy prices were driven lower yesterday amid comments via Ukrainian President Zelensky who said he had a productive meeting with US Envoy Kellogg; he added that Ukraine is ready for a security agreement with US President Trump.
Others: FTSE 100 U/C, CAC 40 +0.3%, DAX 40 U/C
- The FTSE 100 is flat and currently trading within an 8,644-672 range. In terms of movers, Standard Chartered (+5.1%) tops the index after it reported mixed results, where annual profit rose; the co. also launched a USD 1.5bln share buyback. On the data front, UK Retail Sales printed above expectations; M/M came in at +1.7% vs exp. +0.3%; retail names such as JD Sports (+2.5%) have caught a bid. UK PMIs were mixed; Services beat, whilst Manufacturing printed below the lower end of the forecast range. The accompanying release said, "The lack of growth alongside rising price pressures points to a stagflationary environment which will present a growing dilemma for the Bank of England"; overall, the metrics had little impact on the index.
- In terms of individual movers; Kingspan (+9.7%, beat across headline metrics and future outlook commentary was positive), Renault (+0.7%, Nissan shares rose 9.5% amid reports that Tesla could invest in Nissan).
US Equity Futures: ES U/C, NQ +0.1%, RTY +0.1%
- Futures are mixed and trading on either side of the unchanged mark with the RTY up a tenth after significant losses yesterday.
- In the day ahead, the US is expected to see Flash PMIs, consensus expects manufacturing and services to rise a little, to 51.5 and 53 respectively. In the January print, Services surprised to the downside, so participants will keep a close eye on this metric. We are also looking out for US Existing Home sales and UoM final metrics.
- In terms of speakers, the US President is expected to sign executive orders in the evening, and we are expecting remarks from Fed Governor Jefferson, who will speak on "Fed communication".
21 Feb 2025 - 10:00- ForexData- Source: Newsquawk
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