Will companies lower prices?
STOXX 600 DOWN 1.4%
U.S. futures edge lower
UK dodges technical recession
Ueda is likely next BOJ governor
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WILL COMPANIES LOWER PRICES? (1206 GMT)
Some companies in Europe have said they may unwind price hikes introduced in recent years as soaring costs of energy and other raw materials have eased.
Reuters asked strategists and analysts what declining production costs could mean for company margins across Europe and if consumers will ultimately start to see more companies flagging intentions to cut prices following examples from packaging giant Smurfit Kappa SKG.I and Italian mass-market clothing retailer OVS OVS.MI.
Magesh Kumar, an equity strategist at Barclays, says input prices have declined quickly for some time now and that could encourage some price reduction.
"As demand slows, firms then start to cut prices to hold top line and thus start to lose out on pricing power, ultimately causing margins start to shrink. While this is positive at the broader economy level (ie. Because it brings inflation lower), firms that have over earned/had margins expanded over the last couple of years will be facing some pressure," he says.
John Leiper, Chief Investment Officer at Titan Asset Management says while “the reduction in input costs is a positive" there is no shortage of headwinds for euro zone companies. Falling demand and weak money are some of the "headwinds facing companies in the region", he says.
On a more positive note, at least from a consumer perspective, Daniel Bornemann, Partner in consultancy firm Simon-Kucher & Partners says declining raw material costs and energy process "might be passed on to customers soon", at least in some industries.
"Procurement has started to ask for price decreases in parts of the industry, putting sales organisations under pressure," he says.
(Joice Alves)
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CYCLICALS OUTPERFORMANCE BODES WELL, BUT WITH CAVEATS - MS (1119 GMT)
Cyclical stocks have massively outperformed defensives in Europe over the last six months, boding well for the broader macro environment, but investors shouldn't get too excited just yet, according to a team of Morgan Stanley equity strategists led by Graham Secker.
"European cyclicals have outperformed defensives by 18% over the last six months, a relative rate of return only exceeded 3% of the time since 1990," the MS strategists wrote.
Despite the optimism that the outperformance will be followed by more of the same, they offer three caveats that warrant caution.
"First, prior episodes of strong cyclical outperformance usually occur after a significant drop in ROE (return on equity) which paves the way for a commensurately strong rebound in profitability", they say - flagging the lack of such a drop in cyclicals' ROE over the last year.
This factor "would limit the potential for any EPS recovery", they say.
An inverted yield curve also doesn't usually work well for cyclical stocks. An inversion is typically followed by cyclical underperformance, and the recent divergence from this trend looks "unusually striking" to the MS strategists.
Some negative economic indicators from Morgan Stanley's cross-asset strategy team around economic growth are another reason for their caution, as they suggest "investors' safety cushion is deflating and hence that the market's risk-reward profile has deteriorated".
Luxury, capital goods and semis are showing the most elevated cyclical valuations at present, based on MS's analysis of European sectors based on their relative valuation to the market.
They add that autos stands out as the cheapest cyclical sector, "by some distance".
(Lucy Raitano)
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EUROPE IN THE RED, BUT OIL STOCKS FLY (0921 GMT)
The STOXX 600 .STOXX is down 0.6%, wiping out its weekly gain and now on track for a five-day loss of 0.2%.
Oil is pretty much the only sector trading higher, and by quite a high margin, with the oil and gas stocks index .SXEP up 1.4%.
BP .BP is providing a big boost, as shares rise 2.8% to their highest since April 2019.
But it is Swedish defence equipment maker Saab SAABb.ST that tops the index, with shares soaring 8.8% after reporting a rise in fourth-quarter operating profit.
Retail names .SXRP meanwhile are struggling, down 2.1%, and weighed down by Zalando ZALG.DE - down 3.1% - and Zara owner Inditex ITX.MC - down 2.9%.
Here is your opening snapshot:
(Lucy Raitano)
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EUROPEAN FUTURES SIGNAL DECLINES (0740 GMT)
European futures are flashing red this morning, with the STOXX 600 looking poised to lose around 0.5% at the open .STXEc1 and just about wipe out the 0.3% gain so far this week.
It's not even 8am, and there's already talk that the Bank of Japan is set to appoint its next governor, while the UK has managed to dodge a recession. FTSE futures .FFIc1 seem to be enjoying the latter, outperforming the rest of Europe so far, though still down 0.3%.
Elsewhere, the oil bonanza continues, with Norwegian independent oil firm Aker BP AKRBP.OL saying it will boost its dividend by 10% after posting $2.2 billion operating profit for the final quarter of 2022.
Swedish defence equipment maker Saab SAABb.ST also reported a fourth-quarter operating profit, while Zara owner Inditex has reached an agreement to raise salaries in its Spanish stores by an average 20%.
(Lucy Raitano)
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openerhttps://tmsnrt.rs/3K5kTay
Europe's gas price rollercoasterhttps://tmsnrt.rs/40JRF7i
متعلقہ اثاثے
تازہ ترين خبريں
دستبرداری: XM Group کے ادارے ہماری آن لائن تجارت کی سہولت تک صرف عملدرآمد کی خدمت اور رسائی مہیا کرتے ہیں، کسی شخص کو ویب سائٹ پر یا اس کے ذریعے دستیاب کانٹینٹ کو دیکھنے اور/یا استعمال کرنے کی اجازت دیتا ہے، اس پر تبدیل یا توسیع کا ارادہ نہیں ہے ، اور نہ ہی یہ تبدیل ہوتا ہے یا اس پر وسعت کریں۔ اس طرح کی رسائی اور استعمال ہمیشہ مشروط ہوتا ہے: (i) شرائط و ضوابط؛ (ii) خطرہ انتباہات؛ اور (iii) مکمل دستبرداری۔ لہذا اس طرح کے مواد کو عام معلومات سے زیادہ کے طور پر فراہم کیا جاتا ہے۔ خاص طور پر، براہ کرم آگاہ رہیں کہ ہماری آن لائن تجارت کی سہولت کے مندرجات نہ تو کوئی درخواست ہے، اور نہ ہی فنانشل مارکیٹ میں کوئی لین دین داخل کرنے کی پیش کش ہے۔ کسی بھی فنانشل مارکیٹ میں تجارت میں آپ کے سرمائے کے لئے ایک خاص سطح کا خطرہ ہوتا ہے۔
ہماری آن لائن تجارتی سہولت پر شائع ہونے والے تمام مٹیریل کا مقصد صرف تعلیمی/معلوماتی مقاصد کے لئے ہے، اور اس میں شامل نہیں ہے — اور نہ ہی اسے فنانشل، سرمایہ کاری ٹیکس یا تجارتی مشورے اور سفارشات؛ یا ہماری تجارتی قیمتوں کا ریکارڈ؛ یا کسی بھی فنانشل انسٹرومنٹ میں لین دین کی پیشکش؛ یا اسکے لئے مانگ؛ یا غیر متنازعہ مالی تشہیرات پر مشتمل سمجھا جانا چاہئے۔
کوئی تھرڈ پارٹی کانٹینٹ، نیز XM کے ذریعہ تیار کردہ کانٹینٹ، جیسے: راۓ، خبریں، تحقیق، تجزیہ، قیمتیں اور دیگر معلومات یا اس ویب سائٹ پر مشتمل تھرڈ پارٹی کے سائٹس کے لنکس کو "جیسے ہے" کی بنیاد پر فراہم کیا جاتا ہے، عام مارکیٹ کی تفسیر کے طور پر، اور سرمایہ کاری کے مشورے کو تشکیل نہ دیں۔ اس حد تک کہ کسی بھی کانٹینٹ کو سرمایہ کاری کی تحقیقات کے طور پر سمجھا جاتا ہے، آپ کو نوٹ کرنا اور قبول کرنا ہوگا کہ یہ کانٹینٹ سرمایہ کاری کی تحقیق کی آزادی کو فروغ دینے کے لئے ڈیزائن کردہ قانونی تقاضوں کے مطابق نہیں ہے اور تیار نہیں کیا گیا ہے، اسی طرح، اس پر غور کیا جائے گا بطور متعلقہ قوانین اور ضوابط کے تحت مارکیٹنگ مواصلات۔ براہ کرم یقینی بنائیں کہ آپ غیر آزاد سرمایہ کاری سے متعلق ہماری اطلاع کو پڑھ اور سمجھ چکے ہیں۔ مذکورہ بالا معلومات کے بارے میں تحقیق اور رسک وارننگ ، جس تک رسائی یہاں حاصل کی جا سکتی ہے۔
