EUROPEAN EQUITIES UPDATE: Stocks give back early morning strength; Luxury stocks weighed on by poor Chinese data

STOXX 600: -0.1%

• European bourses began the session on a firmer footing, in contrast to a mostly negative APAC session, where China considerably underperformed after the region’s poor Manufacturing PMI figures.


• Soon after the cash open, equities then gradually dipped lower with Europe now displaying a mostly negative picture, but without a clear catalyst. Today’s slew of EZ Manufacturing PMI figures were either unrevised or only incrementally revised; the inner reports continued to forecast a dire outlook for the region; “Even in December, the manufacturing sector is not delivering any holiday cheer. It is the same old story – downward”.

Sectors: Mixed

• European sectors initially opened with a positive bias, but now display a mixed picture.


• Energy is the clear outperformer today, for two reasons; firstly, crude oil prices are a touch higher today, helping to prop up the likes of Shell and BP. Secondly, gas companies such as Saipem, and Eni both benefit from the earlier strength in gas prices after Gazprom halted natgas supplies via Ukraine.


• Autos and parts are found at the foot of the pile today, joined closely by Consumer Products; the latter weighed on by Luxury names, which are being hit following the poor Chinese Manufacturing PMI metrics overnight.

Majors: CAC 40 -0.9%, FTSE 100 +0.1%, DAX 40 U/C

• The CAC 40 is one of the worst performers in Europe thus far, given its heavy weighting to Luxury names, which has a large exposure to China. Overnight, China’s Manufacturing PMI slowed to 50.5 (prev. 51.5), missing expectations. Luxury stocks opened on a firmer footing, potentially as traders betted on further stimulus measures; however, the likes of Kering (-1.1%) and Hermes (-1.8%) were then swept into the red alongside pressure across the complex.


• The FTSE 100 is flat and performing a little better than peers, largely attributed to gains in mining names, which is propped up by broader strength in metals prices; Fresnillo (+1.5%), Antofagasta (+1.3%), Glencore (+0.8%). Elsewhere, UK Nationwide house prices rose 0.7% M/M and 4.7% Y/Y; well above expectations. Nationwide’s Chief Economist noted that homebuyers will bring forward their purchases to the first three months of 2025 to avoid the looming stamp duty changes.

US Equity Futures: ES +0.6% NQ +0.8% RTY +0.5%

• Futures are on a firmer footing, despite a mostly negative Europe session thus far; the NQ marginally outperforms.


• The US Day sees the release of weekly MBA mortgage applications data, weekly initial jobless claims for the week of December 28th (seen at 222k from 219k), continuing claims for the week of December 21st (seen at 1.89mln from 1.91mln; note, neither this week's initial or continuing claims data coincide with next week's release of the December jobs report), final S&P Global manufacturing PMI data for December, and construction spending stats for November (seen +0.3% M/M from the prior +0.4%).

02 Jan 2025 - 09:55- EquitiesData- Source: Newsquawk