EU CONSUMER CYCLICALS: Fnac Darty; 1Q sales
Apr-23 16:10
(FNACFP unsec; NR/BB+/BB+; S)
Priced a 7yr 35bps through our FV in March. Sub 1% falls should be enough for bullish sentiment to hold (low levered).
LFL -0.6% but it says calendar effects was -1%. Net revenue is up +29% on acquired Unieuro.
Core France (60% of group) was -1.2%, rest of Europe +0.4%.
Expects mid-single-digit growth in adj. EBIT excluding Unieuro.
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BOE: Bailey could possibly outline the MPC's new risk cases in more detail today
Mar-24 16:08
- Governor Bailey is due to deliver a speech on “growth in the UK economy”, with text due at 18:00GMT today and it would be very possible that he could set out the new risks cases for the MPC more granularly. As we noted in our BOE Review (see here), perhaps the most significant thing to come out of the March MPC meeting was the lack of any discussion over the three cases that have previously been the bedrock of MPC communication for the past few months. Instead, the MPC outlined the intention for how its guidance would evolve with two new risk cases.
- If Bailey does elaborate on these tonight, we would expect other MPC members to stick to this new script and to move away from the old case 1/2/3 rhetoric.
- This is far from certain, however, as there are many uncertainties ahead of the May MPR, and it might be a bit too early for the MPC to have really fully settled on where their new baseline forecast would be (and may prefer to wait until that is more certain before filling in the gaps any further). Indeed, ahead of the May MPC we will receive two more flash PMI prints, CPI data for both February and March (albeit PPI data has been postponed) and one more labour market report. In addition, the Chancellor’s Spring Statement will have been delivered and there may (possibly) be some more clarity on the global trade / tariff situation (albeit that may be wishful thinking on the latter!)
- We note that Governor Bailey introduced the three cases used up until now in his Jackson Hole speech on 23 August 2024, around three weeks after the August 2024 MPR was published. These cases then appeared in the September MPC Minutes before being fully fleshed out in the November 2024 MPR. However, before November we had MPC members referencing the three case scenario in their speeches and public comments.
- Here is the text from the MPC Minutes regarding the new risk cases:
- “Ahead of the May Report, the Committee was likely to consider scenarios for the risks around medium-term inflation, building on its recent deliberations. The MPC was currently focused on two particular risks. First, the extent to which there could be greater or longer-lasting weakness in demand relative to supply in the economy, in part reflecting uncertainties globally and domestically, which could push down on inflationary pressures in the medium term. Second, the extent to which there could be more persistence in domestic wage and prices, both from more constrained supply relative to demand and from additional second-round effects related to the projected near-term increase in CPI inflation. The MPC would review the evidence on the impact and likelihood of these broad risks as a part of its May policy round, alongside its baseline forecast.”
US TSY FUTURES: BLOCK: Jun'25 30Y Ultra Bond Buy
Mar-24 16:05
- +6,606 WNM5 121-18, well through post time offer of 121-14 at 1147:09ET, DV01 $1.25M. The contract trades 121-18 last (-29)
US STOCKS: Midday Equities Roundup: Risk-On as Tariffs Turn Targeted
Mar-24 15:46
- Stocks are firmer ahead midday, risk sentiment improving as the Trump administration's universal tariff plans take a narrower focus ahead of the April 2 "Liberation Day" implementation. Currently, the DJIA trades up 550.62 points (1.31%) at 42531.49, S&P E-Minis up 90.25 points (1.58%) at 5808.5, Nasdaq up 343.5 points (1.9%) at 18127.15.
- Consumer Discretionary and Information Technology sectors outperformed in the first half, retail buyers helping Tesla rally over 9%, outperforming other Discretionary sector shares: Deckers Outdoor +5.85%, Darden Restaurants +4.66%, Ralph Lauren Corp +4.16%, Royal Caribbean Cruises+3.95% and DoorDash +3.87%.
- Semiconductor makers buoyed the Tech sector in the first half as AI demand for high performance chips continued: Advanced Micro Devices +6.42%, ON Semiconductor +5.46%, NXP Semiconductors +5.31% and Palantir Technologies +5.21%.
- On the flipside, Utilities and Consumer Staples underperformed ahead midday, water and independent energy providers weighed on the former: AES Corp -1.99%, NextEra Energy -0.75%, American Water Works -0.69% and CenterPoint Energy -0.62%.
- Meanwhile, Consumer Staples weighed by food producers & distributors: Hormel Foods -1.93%, Brown-Forman -1.44%, Kraft Heinz -1.20% and Dollar General -0.85%.
