European Equities: Eurozone and Member State Manufacturing Sector PMIs in Focus

The Majors

It was a bullish start to the week for the European majors on Monday.

The CAC40 rose by 0.92%, with the DAX30 and the EuroStoxx600 ending the day up by 0.75% and by 0.73% respectively.

Market concerns over inflation took a back seat. Corporate earnings delivered record highs at the start of the month.

Economic data from China also provided some comfort. The Caixin survey did reveal a more marked pickup in cost pressures. In October, the Caixin Manufacturing PMI increased from 50.0 to 50.6. Economists had forecast a PMI of 50.0.

The Stats

German retail sales were in focus going into the European open.

In September, retail sales slid by 2.5% month-on-month versus a forecasted 0.6% increase. Retail sales had risen by 1.2% in August. Year-on-year, retail sales was down by 0.9%.

According to Destatis,

Retail turnover was up 3.7% in September 2021 on the pre-crisis month of February 2020.

From the U.S

Manufacturing PMI numbers were in focus later in the European session.

In October, the ISM Manufacturing PMI slipped from 61.1 to 60.8.

Looking at the sub-components,

• The New Orders Index fell by 0.1 percentage point to 59.3%, while the Price Index jumped 4.5 percentage points to 85.7%.
• Backlogs were in decline, falling by 1.2 percentage points to 63.6.
• The Supplier Deliveries Index increased 2.2 percentage points to 75.6%.
• Employment conditions improved, however, with the Employment Index up 1.8 pp to 52.0%.

According to the survey, all segments of the manufacturing sector continued to struggle amidst record-long raw material lead times. There were also continued shortages of critical materials, rising commodities prices, and difficulties in transporting products.

The Market Movers

For the DAX: It was another mixed day for the auto sector on Monday. Continental fell by 0.90% to buck the trend. Daimler rallied by 2.05% to lead the way, however with BMW and Volkswagen seeing gains of 1.16% and 0.66% respectively.

It was a bullish day for the banks. Deutsche Bank rose by 1.80%, with Commerzbank gaining 0.84%.

From the CAC, it was a particularly bullish day for the banks. BNP Paribas rallied by 3.06%, with Credit Agricole and Soc Gen rising by 1.21% and 2.06% respectively.

It was also a bullish day for the French auto sector. Stellantis NV and Renault rose by 1.65% and by 2.16%  respectively.

Air France-KLM rallied by a further 4.42%, while Airbus SE ended the day down by 0.85%.

On the VIX Index

It was back into the green for the  VIX on Monday, marking a 3^rd increase in 5-sessions.

Partially reversing a 1.63% decline on Friday, the VIX increased by 0.92% to end the day at 16.41.

The NASDAQ rose by 0.63%, with the Dow and the S&P500 gaining 0.26% and 0.18% respectively.