In European Equity Markets stocks pulled back on Friday with UBS dragging bank stocks lower after posting a fall in full-year profit, while Britain’s biggest supermarket Tesco rose after a 3.7 billion-pound takeover deal to buy a supplier. The pan-European STOXX 600 index was down 0.3 percent at its close, while the UK’s FTSE 100 rose 0.3 percent, supported by Tesco, which rose 9.3 percent after agreeing to buy wholesale supplier Booker in a deal that cements its dominant position in the UK. UBS, however, fell 4.5 percent. The world’s biggest wealth manager posted a 47 percent fall in 2016 net profit but struck a more optimistic tone for 2017 as its fourth-quarter net profit came in well ahead of market expectations.
In Currency Markets the dollar rose to a one-week high against the yen on Friday, once again buoyed by expectations that U.S. President Donald Trump would deliver on his campaign promise to put policies in place to further bolster an economy that has improved but has sputtered at times. The dollar briefly wobbled after advance data showed U.S. economic growth slowed more than expected to 1.9 percent in the fourth quarter due to weak exports. In midmorning trading, the dollar was up 0.4 percent against the yen to 114.96. It rose against sterling, which fell 0.2 percent to $1.2569. The euro gained 0.3 percent against the dollar to $1.0710, leaving the dollar index slightly higher on the day at 100.42.
In Commodities Markets oil prices fell on Friday, giving up gains from earlier in the day, as the market shifted its focus toward production increases in the United States and away from efforts by OPEC and other producers to support prices by cutting supplies. Brent crude futures were trading at $55.56 per barrel, down 68 cents from their previous close. U.S. West Texas Intermediate crude futures were at 53.25 a barrel, down 53 cents. Spot gold was down 0.2 percent at $1,185.15 an ounce. Silver was down 0.3 percent at $16.71 an ounce, while platinum was 0.4 percent lower at $970.10. Palladium was up 0.7 percent at $726.20, having earlier hit its lowest since Jan. 4 at $708.97.
In US Equity Markets stocks were slightly lower on Friday, weighed down by underwhelming corporate earnings and gross domestic product data. The Dow Jones Industrial Average was down 0.09 percent, at 20,082.35. The S&P 500 was down 0.14 percent, at 2,293.29 and the Nasdaq Composite was down 0.03 percent, at 5,653.55. Microsoft rose 2.1 percent, while Intel gained 1.8 percent after the two companies reported quarterly results above Wall Street expectations. However, Google parent Alphabet was down 0.4 percent after it posted fourth-quarter profit below analysts’ estimates. Chevron fell 2 percent to after its quarterly profit fell short of analysts’ expectations.
In Bond Markets U.S. Treasury yields fell on Thursday, with benchmark yields falling below 2.50 percent, as data showing a sharper-than-forecast slowing in economic growth in the fourth quarter spurred buying of U.S. government debt. Benchmark 10-year Treasury yield was down 1 basis point at 2.495 percent, retreating further from a four-week high reached on Thursday.
European Equity Earnings
LVMH (MC FP) – FY revenue EUR 37.6bln vs. Exp. EUR 37.4bln and FY Net EUR 3.98bln vs. Exp. EUR 4.03bln.
JCDecaux (DEC FP) – Q4 revenue EUR 982.8mln vs. Exp. USD 983.9mln Y/Y and FY revenue EUR 3.39bln vs. Exp. USD 3.4bln.
Altran Technologies (ALT FP) – Co. Q4 revenue EUR 562mln vs. Prev. EUR 521mln Y/Y (Co. expects to continue growth in profits this year)
UBS (UBSG VX) – Q4 net profit CHF 738mln vs. Exp. CHF 339mln, Q4 Adj. pretax profit CHF 1.11bln vs. Prev. CHF 754mln Y/Y, Op. revenue CHF 6.94bln vs. Prev. CHF 6.85bln and CET 1 Capital Ratio 13.8% vs. Prev. 14%.
SFS Group (SFSN VX) – Co. report FY16 Revenue CHF 1.44bln vs CHF 1.38bln Y/Y.
Telia Company (TELIA SS) – Q4 Net SEK 7.34bln vs. Exp. SEK 7.05bln, EBITDA SEK 6.38bln vs. Prev. SEK 6.56bln Y/Y, Revenue SEK 21.1bln vs. Exp. SEK 20.8bln, guides FY17 EBITDA flat Y/Y.
Elisa (ELI1V FH) – Co. reports Q3 PBT EUR 74mln vs. Prev. EUR 62mln Y/Y, Ebitda EUR 139mln vs. Exp. EUR 138.9mln, revenue EUR 434mln vs. Exp. EUR 425mln and to buy back 5mln in shares.
Ahlstrom (AHL1V FH) – Q4 Adj Op EUR 8mln vs EUR 16.4mln y/y, EBITDA EUR 20.0mln vs EUR 14.8mln y/y Rev EUR 266.1mln vs EUR 255mln y/y.
Wartsila (WRT1V FH) – Reports Q4 EPS EUR 0.87 vs EUR 0.79 y/y, adj EBIT EUR 253 mln vs Exp. EUR 232 mln, Rev EUR 1.56bln vs Exp. EUR 1.52bln.
Elior (ELIOR SS) – Q1 Rev EUR 1.59bln vs. Prev. EUR 1.48bln y/y and Co. affirms outlook.
Axis (AXIS SS) – Co. reports Q3 revenue SEK 2.06bln vs. Prev. SEK 1.76bln Y/Y.
Banco Sabadell (SAB SM) – Q4 net profit EUR 64mln, FY16 net interest income EUR 3.8bln, FY16 Net profit EUR 710mln.
BT (BT/A LN) – Q3 Rev GBP 6.13bln up 32%, EPS down 22%, Q3 Adj EBITDA GBP 1.87bln vs. Exp. GBP 1.97bln, Q3 Pretax profit GBP 526mln vs. Prev. GBP 832mln Y/Y.
NCC (NCCA SS) – Co. report Q4 revenue SEK 16.5bln vs. Exp. SEK 16.9bln.
European Equity Upgrades/Downgrades
IAG (IAG LN) UPGRADED TO BUY FROM NEUTRAL AT GOLDMAN SACHS AND UPGRADED TO
SECTORPERFORM FROM UNDERPERFORM AT RBC
EASY JET (EZJ LN) DOWNGRADED TO NEUTRAL FROM BUY AT GOLDMAN SACHS
OLD MUTUAL (OML LN) UPGRADED TO OVERWEIGHT FROM NEUTRAL AT JP MORGAN
NEXT (NXT LN) UPGRADED TO NEUTRAL FROM UNDERPERFORM AT EXANE BNP PARIBAS
DEUTSCHE LUFTHANSA (LHA GY) UPGRADED TO HOLD FROM REDUCE AT HSBC AND UPGRADED TO OUTPERFORM FROM NEUTRAL AT DAVY
AAREAL BANK (ARL GY) DOWNGRADED TO HOLD FROM BUY AT HSBC
MTU AERO ENGINES HOLDING (MTX GY) DOWNGRADED TO HOLD FROM BUY AT BERENBERG
STMICROELECTRONICS (STM FP) UPGRADED TO NEUTRAL FROM UNDERWEIGHT AT JP MORGAN
SCOR (SCO FP) DOWNGRADED TO NEUTRAL FROM BUY AT GOLDMAN SACHS
METROPOLE TELEVISION (MMT FP) UPGRADED TO HOLD FROM UNDERPERFORM AT JEFFERIES
ELIS (ELIS FP) DOWNGRADED TO EQUAL WEIGHT FROM OVERWEIGHT AT MORGAN STANLEY
PROXIMUS (PROX BB) DOWNGRADED TO UNDERWEIGHT FROM EQUAL WEIGHT AT MORGAN STANLEY
LUXOTTICA GROUP (LUX IM) UPGRADED TO HOLD FROM BUY AT HSBC
GRANDVISION NV (GVNV NA) UPGRADED TO OUTPERFROM FROM NEUTRAL AT EXANE
SWISS RE (SREN VX) UPGRADED TO BUY FROM NEUTRAL AT GOLDMAN SACHS
NORDEA (NDA SS) DOWNGRADED TO HOLD FROM BUT AT DEUTSCHE BANK
BANKINTER (BKT SM) DOWNGRADED TO HOLD FROM BUY AT SANTANDER
ERICSSON (ERICB SS) DOWNGRADED TO REDUCE FROM HOLD AT KEPLER CHEUVREUX
JC DECAUX (DEC FP) UPGRADED TO BUT FROM HOLD AT LIBERUM CAPITAL