European Equities: Can the Bulls End April on a High?

The Futures are pointing to a positive open, but economic data out of the EU and the U.S could weigh later in the day.
Bob Mason
List of stock market indices

Economic Calendar:

Monday, 29th April

N/A

Tuesday, 30th April

French GDP (QoQ) (Q1) 1st Estimate

GfK German Consumer Climate (May)

French Consumer Spending (MoM) (Mar)

Spanish GDP (QoQ) (Q1)

German Unemployment Change (Apr)

German Unemployment Rate (Apr)

Italian CPI (MoM) (Apr)

Eurozone GDP q/q (Q1) 1st Estimate / Eurozone GDP y/y (Q1) 1st Estimate

Eurozone Unemployment Rate (Mar)

German CPI (MoM) (Apr)

Wednesday, 1st May

N/A

Thursday, 2nd May

German Retail Sales (MoM) (Mar)

Spanish Manufacturing PMI (Apr)

Italian Manufacturing PMI (Apr)

French Manufacturing PMI (Apr) Final

German Manufacturing PMI (Apr) Final

Eurozone Manufacturing PMI (Apr) Final

Friday, 3rd May

Eurozone Core CPI (YoY) (Apr) Prelim

Eurozone CPI (YoY) (Apr) Prelim

The Majors

It was a mixed week for the European majors last week. While the DAX and EuroStoxx600 gained 0.76% and 0.14% respectively, the CAC ended the week down 0.2%.

The CAC’s losses came in spite of a 0.21% gain on Friday, with the European majors resuming the upward trend following a mid-week blip.

Economic data out of the Eurozone was limited to French jobseeker figures that had a muted impact on the majors.

The focus through the European session was on corporate earnings. Out of Germany, all eyes were on Deutsche Bank earnings results. Results were due out in the wake of Thursday’s announcement that merger talks with Commerzbank would cease.

While net profit came in well ahead of forecasts, disappointing revenue numbers and a negative revenue outlook weighed. Deutsche Bank ended the day down 2.39%, the slide coming off the back of a 1.25% fall on Thursday.

The auto sector was also in the spotlight as Daimler released its earnings results. A slide in earnings was attributed to production bottlenecks, slower demand from China and slowing global economy.  Daimler gained 0.8% on Friday, however. Support came from its outlook for 2019, where growth is anticipated in unit sales, revenue, and earnings.

From the U.S, support came from economic data, which included a better than expected 1st quarter GDP estimate of 3.2%.

While the headline number was impressive, a slide in consumption and investment continued to support the prospect of a FED rate cut later in the year, which was positive for riskier assets.

The Day Ahead

There are no material stats scheduled for release out of the Eurozone. With a lack of key stats, we can expect Eurozone business confidence figures to have an impact in the early part of the day.

Disappointing consumer confidence figures weighed last week. Anything in line with or worse than forecasts today could hit the majors in the early part of the session.

From across the Pond, Alphabet Inc. earnings will be the headline release of the day, with no headline earnings results due out of the EU.

On the data front, expect risk appetite to be influenced by the FED’s preferred Core PCE Price Index and personal spending numbers later this afternoon.

At the time of writing, the futures were pointing to a positive open. The DAX30 was up 34.5 points, with the CAC40 was pointing to a 16 point rise at the open.

In spite of the U.S futures being in the red, support also came from a bounce in the Hang Seng and CSI300 ahead of the open

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