In European Equity Markets stocks fell on Thursday, though Zodiac Aerospace’s shares rose after a takeover offer by France’s Safran and Moneysupermarket.com also jumped after it reported strong results. The pan-European STOXX 600 index ended down 0.1 percent after a choppy day. Zodiac Aerospace rocketed 22.8 percent after Safran offered $9 billion to buy the aircraft seat manufacturer. After an initial positive reaction, shares in Safran turned lower to end down 5.4 percent. Royal Mail’s results were badly received. Its shares fell 6 percent, weighing on the blue chip FTSE 100 index, which lost 0.5 percent. Dutch-Belgian food retailer Koninklijke Ahold Delhaize rose 5.9 percent after posting strong fourth quarter sales figures.
In Currency Markets the dollar climbed on Thursday as solid U.S. data reinforced a theme of robust U.S. economic growth, while the euro fell after European Central Bank chief Mario Draghi alluded to sagging inflation and the need for further monetary policy assistance. The euro fell to a session low of $1.0590 against the dollar and to a 10-day low of 86.11 pence against sterling. The dollar rose to a nearly one-week high against the yen as investors laid bets on further dollar strength. The greenback moved to 115.29 yen, its highest since Jan. 13. The dollar also booked gains against the Swiss franc, rising to 1.0115 franc. The dollar index was up 0.28 percent at 101.58.
In Commodities Markets oil prices rose on Thursday, but swelling crude stockpiles in the United States limited the rebound from a one-week low after the International Energy Agency said oil markets had been tightening even before cuts agreed by OPEC and other producers took effect. Benchmark Brent crude was up 0.7 percent, at $54.30 a barrel and U.S. crude rose 0.7 percent, to $51.44 a barrel. U.S. crude inventories rose unexpectedly last week as refineries sharply slowed production, while gasoline stocks rose amid weak demand, the EIA said on Thursday. Crude inventories rose 2.3 million barrels in the week to Jan. 13, compared with analysts’ expectations for an increase of 342,000 barrels. Spot gold fell 0.2 percent to $2,201.76 an ounce.
In US Equity Markets stocks edged lower on Thursday as investors appeared wary of taking on too much risk ahead of Donald Trump’s swearing-in as president on Friday. The Dow Jones Industrial Average was down 0.25 percent, at 19,755.51. The S&P 500 was down 0.22 percent, at 2,266.93 and the Nasdaq Composite was down 0.15 percent, at 5,547.24. Railroad provider CSX Corp jumped 17 percent after a source said CP Rail CEO Hunter Harrison, who steps down on Jan. 31, is in advanced talks to team up with a former Pershing Square Capital partner to shake up CSX. Union Pacific was up 2.7 percent after the company reported a better-than-expected quarterly net profit. Exxon was off 1.5 percent following a UBS downgrade to “sell”.
In Bond Markets U.S. Treasury yields rose to two-week highs on Thursday after data showed solid economic growth, a day after Federal Reserve Chair Janet Yellen signaled further rate hikes are likely. Benchmark 10-year notes fell 20/32 in price to yield 2.46 percent, up from 2.39 percent late Wednesday, and the highest since Jan. 4. Euro zone bond yields rose 4-6 basis points across the board, with Germany’s 10-year government bonds rising 5 basis points to a one-month high of 0.33 percent. Dutch and Finnish 10-year government bond yields also hit one-month highs, rising 5 bps each to 0.50 percent and 0.53 percent respectively.
European Equity Earnings
Carrefour (CA FP) – Co. reports Q4 group sales rose 2.9% LFL to EUR 23.366bln vs. Exp. EUR 23.3bln, international LFL +4%.
Remy Cointreau (RCO FP) – Co. reports Q3 FY 2016/17 groups sales rose 7.4% to EUR 323.3mln vs. Exp. EUR 307.5mln and affirm FY operating profit.
Ahold Delhaize (AH NA) – Co. reports Q4 pro form revenue EUR 15.5bln in line with expected, while US SSS feel 0.2%.
European Equity Upgrades/Downgrades
ITV (ITV LN) DONWGRADED TO SELL FROM NEUTRAL AT UBS
COCA-COLA HBC (CCH LN) UPGRADED TO BUY FROM NEUTRAL AT GOLDMAN SACHS
TULLOW OIL (TLW LN) DOWNGRADED TO HOLD FROM BUY AT HSBC
INTERTEK GROUP (ITRK LN) UPGRADED TO BUY FROM HOLD AT BERENBERG
UNITED UTLITIES (UU LN) UPGRADED TO OUTPERFORM FROM NEUTRAL AT CREDIT SUISSE
SEVERN TRENT (SVT LN) UPGRADED TO NEUTRAL FROM UNDERPERFORM AT CREDIT SUISSE
G4S PLC (GFS LN) UPGRADED TO EQUALWEIGHT FROM UNDERWEIGHT AT BARCLAYS
SAGE (SGE LN) REMOVED FROM CONVICTION BUY LIST AT GOLMAN SACHS
LAGARDERE (MMB FP) DOWNGRADED TO HOLD FROM BUY AT KEPLER CHEUVREUX
MEDIASET (MS IM) DOWNGRADED TO SELL FROM NEUTRAL AT UBS
ERTIS (ABE SM) RATED OUTPERFROM AT RAYMOND JAMES
LUNDIN PETROLEUM (LUPE SS) UPGRADED TO HOLD FROM SELL AT NORDEA
ERICSSON (ERICB SS) DOWNGRADED TO SELL FROM NEUTRAL AT GOLDMAN SACHS