>>> TradeGate Pre-Market Indications

DAX:
  • Zalando (ZAL TH) +9.5%
    • Zalando Says 2024 Profitability Beat Guidance on Customer Growth
  • Infineon (IFX TH) +1.4%
    • Singapore Chip-Gear Maker GVT Says AI Boom Far From Over
MDAX:
  • AUTO1 (AG1 TH) +1.3%
  • Hugo Boss (BOSS TH) +1.1%
    • Watch European Luxury after Richemont’s Unexpected Q3 Sales Beat
SDAX:
  • Draegerwerk (DRW3 TH) +4.5%
    • Draegerwerk Prelim FY Net Sales About EU3.37B, Est. EU3.4B
  • Borussia Dortmund (BVB TH) +2.6%
  • SUSS MicroTec (SMHN TH) +2%
  • SAF-Holland SE (SFQ TH) -0.6%
    • SAF-Holland SE Prelim FY Sales About EU1.88B, Est. EU1.94B
  • Verbio SE (VBK TH) -19%
    • *VERBIO SE: VERBIO REDUCES EBITDA FORECAST FOR 2024/25

>>> What to look at today - 16th of December 2024

Asian equities tracked Wall Street’s gains as cooling US core inflation kept alive the prospect of Federal Reserve easing this year. The yen climbed on Bank of Japan rate-hike expectations. Gauges in Australia, Hong Kong and South Korea all advanced, sending an index of Asian equities higher for a third day. The S&P 500 rose 1.8% Wednesday, the benchmark’s best day since the November election, which erased its 2025 decline. US stock futures declined. The yen rose on a report that BOJ officials see a good chance of a rate increase next week as long as Donald Trump’s arrival at the White House doesn’t trigger too many negative surprises. Treasuries were little changed while an index of the dollar halted a two-day losing streak. Swap traders are back to fully pricing in a Fed rate reduction by July following the US inflation report, reinstating bets that were dashed when December jobs data came in stronger than expected. But the renewed appetite for risk will be tested in the coming days as the Fed and the Bank of Japan hand down policy decisions and Trump takes office. Japan’s currency rallied as much as 0.8%, before paring gains, as BOJ officials were said to acknowledge there’s a likelihood the rate will be raised from 0.25% at the end of its two-day meeting on Jan. 24. That’s so unless Trump ruffles markets or changes expectations about the global economy at the start of his presidency. The cooling in the dollar’s rally helped put emerging-market currencies on course for a third day of gains, their longest run of increases in over a month. The Thai baht, Taiwanese dollar and the Russian ruble all strengthened. The South Korean won swung to a loss after central bank Governor Rhee Chang-yong said all six members of the board were open to a rate cut in the next three months.  Elsewhere in Asia, Taiwan Semiconductor Manufacturing Co.’s profit in the December quarter topped estimates with a 57% rise, giving a boost to investors hoping to see the AI hardware spending spree extend into 2025. The company’s shares in Taipei jumped by the most since October. 
In commodities, oil held a powerful, early-year advance on mounting concerns about risks to global supplies, and as commercial crude inventories in the US posted their longest run of declines since 2021. Gold slipped. Later Thursday, the European Central Bank will release its meeting minutes while US data to be released includes initial jobless claims and retail sales, providing investors with a broader picture of the health of the world’s largest economy. The so-called US core consumer price index — which excludes food and energy costs — increased 0.2% in December. That marked the first stepdown in the rate in six months. From a year ago, it rose 3.2%. That’s still above the Fed’s 2% target. A handful of Federal Reserve officials said the data offered confidence that inflation would continue to ebb. “The process of disinflation remains in train. But we are still not at our 2% goal, and it will take more time until we can achieve that on a sustained basis,” New York Fed President John Williams said Wednesday. Maintaining the dollar as the world’s reserve asset is critical to US economic health and the nation’s future, Scott Bessent, Donald Trump’s nominee for Treasury secretary, will tell a Senate committee, according to prepared remarks. US After Hours SEZL +11.7% soars on uplifting guidance; SNAP -2.4% and META -1.3% slipping on reports Trump may suspend enforcement of TikTok ban.

Nikkei +0.33% Hang Seng +1.17% CSI +0.10% Shanghai +0.24% Shenzen +0.38%

Eur$ 1.0286 CNH 7.3494 CNY 7.3316 JPY 156.22 GBP 1.2216 CHF 0.9126 RUB 102.5106 TRY 35.4658 WTI$ 80.23 +0.24% Gold 2,693 -0.12% BTC 99,700 +0.02% ETH 3,374 -1.72%

S&P +0.11% Nasdaq +0.13% EuroStoxx +0.21% FTSE +0.22% Dax -0.01% SMI +0.50%

Macro :
- Dealmakers fear cross-border M&A will be hostage to Trump diplomacy
- Israel and Hamas Reach a Deal to Pause 15-Month-Long War in Gaza
- India achieves 'historic' space docking mission
- Dollar Bulls Overstretched Enough to Signal Peak May Be In
- Advent Said to Name D’Angelo to Lead Health Care Deals in Europe
- Euro to Fall Below Parity in 2025 on Tariffs, ECB, UBS Predicts
- Crypto Exchange Kraken Says Chief Legal Officer Santori Leaves
- EM Assets Inch Higher Ahead of Trump’s White House Return
- Geller’s $10.4 Billion Multifamily Office Is Acquired by Corient
- Short Seller Hindenburg Research to Be Disbanded, Founder Says
- FTC Chair Khan on Deere Suit, Big Tech and M&A (Video)
- Waltz: Trump Will Find a Way to Preserve TikTok, User Data
- Investors Seek $5 Billion for Basketball League to Rival NBA

Keep an eye on :
- AKRBP NO : Aker BP Prelim 4Q Avg Production Beats Estimates
- ALO FP : Alstom in Pact With Metrolinx for GO Transit Cars Overhaul
- APAM NA : Universal Stainless Stockholders Approve Acquisition by Aperam
- ARYN SW : Aryzta Says it Expects to Achieve 2025 Targets One Year Early
- ASML NA : *TSMC SEES 2025 CAPEX $38B TO $42B, EST. $35.15B
- BX US : Blackstone Said to Seek $3 Billion in Dylan, Adele Rights Sale
- ROO LN : Deliveroo 4Q Gross Transaction Value Matches Estimates
- DNO NO : DNO 4Q North Sea Net Output 19,031 Boepd, Kurdistan 17,424 Boepd
- DKNG US : DraftKings, Flutter Slide as Maryland Proposes Tax Hike
- DD US : DuPont to Speed Up Sale of Electronics Unit, Retain Water Unit
- EIX US : Edison International Bonds, Shares Rally After Analyst Upgrade
- LLY US : Eli Lilly Wins US FDA Approval for Omvoh in Crohn’s Disease
- FAST NA : Fastned 4Q Revenue Related to Charging EU26.6M
- FM CN : First Quantum Minerals 2025 Copper Prod Forecast Misses Est.
- FRA GY : Fraport 2024 Frankfurt Airport Passenger Traffic rose 3.7% to 61.6M
- GEBN SW : Geberit FY Sales Matches Estimates
- IDIA SW : Idorsia Sees 2025 Net Revenue About CHF110M, Est. CHF122.3M
- INCY US : Incyte, Syndax’s Niktimvo Gets FDA OK in 9mg, 22mg Vial Sizes
- KER FP : Kering and Ardian in Investment Pact on Paris Real Estate
- KESKOB FH : Kesko Dec. Comparable Sales +3.9%
- LHA GY : Italy’s ITA Airways Names Joerg Eberhart CEO, New Board Slate
- META US : Meta Falls on Report Trump Considering Action to Stop TikTok Ban
- MOWI NO : Mowi Prelim 4Q Ebit About EU226M, Est. EU205.3M
- ORNBV FH : Orion Upgrades FY Outlook for 2024 on Better Than Expected Sales
- PARA US : Paramount Global falls as lawmaker says Skydance deal should get CFIUS scrutiny
- PLUG US : US to Finalize Billions in Funding for Rivian, Plug Before Trump
- RNO FP : Renault Group 2024 Global Vehicle Sales Up 1.3% vs. 2023, Renault Says New Model Launches Helped Bolster 2024 Deliveries, Renault Confident on Outlook for EV, Hybrid Sales This Year
- REP SM : Repsol 4Q Downstream Refining Margin/BBL Beats Estimates
- CFR SW : Richemont 3Q Sales at Constant Exchange Rates Beats Estimates
- RIO LN : Rio Tinto 4Q Pilbara Ore Shipments Misses Estimates
- RIO LN : GOP Eyes Fast-Track Budget Bill for Rio Tinto Mine Approval
- SFQ GY : SAF-Holland SE Prelim FY Sales About EU1.88B, Est. EU1.94B
- 3382 JP : KKR Considers Joining Seven & i Management Buyout After Apollo
- SLXN US : Silexion Therapeutics Shares Jump After Pancreatic-Cancer Treatment Data
- SIVE SS : Sivers Semiconductors Sets SEK105 million Shares ATM Offering
- STLA US : Stellantis 4Q Consolidated Shipments Decline 9% Y/y
- TSLA US : Tesla is offering Cybertruck discounts as EV market gets crowded
- 2330 TT : TSMC Profit Beats Estimates After Year of Rapid AI-Driven Growth
- UMG NA : Universal Music Plans US Share Sale for Pershing Square Stake
- VAIAS FH : great
- VOW GY : Exclusive-Chinese buyers interested in unwanted German Volkswagen factories, source says
- ZAL GY : Zalando Says 2024 Profitability Beat Guidance on Customer Growth

>>> Europe : Brokers Upgrades & Downgrades - 16th of January 2025

>>> Up
* BAE Raised to Neutral at BNPP Exane; PT 1,286 pence
* Balder Raised to Buy at SEB Equities; PT 83 kronor
* Balder Raised to Buy at Nordea; PT 85 kronor
* Ferrovial Raised to Overweight at JPMorgan; PT 49 euros
* First Solar Raised to Buy at Seaport Global Securities; PT $274
* Goldman Sachs PT Raised to $660 from $560 at Argus
* Indutrade Raised to Buy at ABG; PT 325 kronor
* Iren Raised to Buy at Kepler Cheuvreux
* JPMorgan PT Raised to $275 from $235 at Argus
* Leonardo Raised to Overweight at Morgan Stanley; PT 35 euros
* Orange Polska Raised to Buy at Erste Group; PT 9 zloty
* Orsted Raised to Neutral at Grupo Santander; PT 360 kroner
* Randstad Raised to Buy at BofA
* Rapala VMC Raised to Accumulate at Inderes; PT 2.20 euros
* Rolls-Royce PT Raised to 700 pence at Morgan Stanley
* Sagax Raised to Buy at SEB Equities; PT 270 kronor
* Thales Raised to Outperform at BNPP Exane; PT 176 euros
* Witted Megacorp Raised to Buy at Inderes; PT 2 euros

>>> Down
* AB Foods Cut to Sell at Citi; PT 1,770 pence
* Adecco PT Cut to 19.50 Swiss francs at BofA
* BlueNord Cut to Hold at DNB Markets; PT 680 kroner
* First Quantum Minerals Cut to Hold at Canaccord; PT C$20
* ISS Cut to Underperform at BofA
* Nokia Cut to Sell at Goldman; PT 3.50 euros
* Nokia ADRs Cut to Sell at Goldman; PT $3.60
* Prosus Cut to Hold at Kepler Cheuvreux
* Safran Cut to Equal-Weight at Morgan Stanley; PT 243 euros
* Saint-Gobain Cut to Neutral at UBS
* Var Energi Cut to Hold at DNB Markets; PT 39 kroner

>>> Initiation
* Altria Rated New Equal-Weight at Morgan Stanley; PT $54
* Bankinter Rated New Outperform at RBC; PT 9.75 euros
* Beazley Reinstated Outperform at Autonomous; PT 1,000 pence
* CaixaBank Rated New Sector Perform at RBC; PT 5.65 euros
* Hannover Re Reinstated Neutral at Autonomous; PT 265 euros
* Hiscox Reinstated Neutral at Autonomous; PT 1,115 pence
* Intercos Rated New Buy at Kepler Cheuvreux; PT 17.50 euros
* Lancashire Reinstated Outperform at Autonomous; PT 840 pence
* Munich Re Reinstated Neutral at Autonomous; PT 520 euros
* Philip Morris Rated New Overweight at Morgan Stanley; PT $140
* Pluxee Rated New Hold at Stifel; PT 25 euros
* Prisma Properties Rated New Hold at Pareto Securities
* Scor Reinstated Neutral at Autonomous; PT 27.50 euros
* Swiss Re Reinstated Outperform at Autonomous

>>> Call
* Euro to Fall Below Parity in 2025 on Tariffs, ECB, UBS Predicts

FT : Quality control merger fails the investor smell test

Quality control merger fails the investor smell test
A putative tie-up between Switzerland’s SGS and France’s Bureau Veritas sent the combined market capitalisation dipping

In most sectors, big is most definitely better. Corporate behemoths are more profitable, have stronger brands, can more easily attract talent and build capabilities, and tend to take share from minnows. The business of auditing financial accounts, by way of example, is largely concentrated among the Big Four. 

Not so the business of auditing real-world stuff — a roughly €150bn market that involves inspecting beaches for cleanliness, testing products for quality, and certifying processes for compliance. The top 10 companies only hold about a quarter of the market according to Karl Green at RBC Capital. A potential €32bn tie-up between two of its leading players — Switzerland’s SGS and France’s Bureau Veritas — has gone down like an adulterated yoghurt, with the combined market capitalisation dipping on Wednesday. 

That reflects the specifics of this sector, which deals in the rich tapestry of the physical world. Sums, spreadsheets and — to a large extent — accounting standards are universal. Work can be optimised to increase efficiency. But a unit that sends out marine experts with clipboards to inspect ships, for instance, cannot easily take on a job inspecting clothing for residue chemicals.

While there would be room to slim down corporate overheads, that’s unlikely to be transformative. This limits the possibility of SGS — the larger business with a SFr16.4bn (€17.5bn) market capitalisation — paying much of a premium for Bureau Veritas without destroying value. 

Market share gains, too, may prove elusive. The cost of testing, inspection and certification (TIC) is relatively small. That does not give clients much of an incentive to shop around, which makes for sticky relationships with existing suppliers. 


For the inspectors, a merger makes most sense as a defensive move. The TIC market will at some point need to transform to keep up with the world around it. Human testers will, over time, be replaced by sensors and drones. Artificial intelligence can help create product prototypes, which can then be put through their paces on laptops rather than in labs. That will require a cycle of capital investment better shared than borne alone. 

On top of that, the market for TIC services isn’t looking quite as hot as it was. Secular drivers of demand include economic growth, increasing regulation and international trade. That squares poorly with President-elect Donald Trump’s desire to impose tariffs and his dislike of clean energy pledges and red tape.

That a bigger entity could better withstand heavy investments and lumpier demand makes intuitive sense. But if the test is one of appealing to investors, this putative union could struggle to scrape through.

FT : Gucci owner to sell stakes in glitzy Paris properties to private equity fir

Gucci owner to sell stakes in glitzy Paris properties to private equity firm Ardian
Luxury brand Kering seeking to unlock cash for its drive to woo more affluent customers

The luxury group that owns brands Gucci and Saint Laurent has struck a deal to sell majority stakes in three of its high-profile Parisian real estate properties to French private equity group Ardian.

Paris-listed Kering said it would sell 60 per cent of the stake it holds in the properties on Paris’ famed Place Vendôme and avenue Montaigne shopping areas to Ardian for €837mn.

Kering will retain 40 per cent ownership, and receive guarantees its brands can continue to occupy the buildings.

Top luxury groups including Kering and bigger rival LVMH have spent billions on properties in major cities in recent years, in a fierce rivalry to secure limited real estate on the top shopping streets that project luxury groups’ carefully curated image of prestige and attract well-heeled shoppers.

For Kering this competition has come at a difficult time, however. It has lagged behind rivals as it invests heavily in creating a more premium offering to woo affluent clients. It has also struggled to improve performance at Gucci, its biggest brand that accounts for half of group sales and two-thirds of profits. Kering issued profit warnings last year, a rarity for big luxury groups, and its shares have fallen more than 38 per cent in the past year, giving it a market value of €27bn.

Competition for real estate requires tying up large amounts of capital potentially indefinitely. But Wednesday’s deal, which is expected to close in the first quarter of this year, will allow the group to free up some of its investment while keeping control of the properties. 

“We are very pleased with this partnership, which allows us to secure for the long term highly prominent retail locations while preserving our financial flexibility,” said Kering deputy chief executive Jean-Marc Duplaix. Stéphanie Bensimon, Ardian’s head of real estate, said it was “a transformative approach to real estate strategies for luxury groups”.

Kering spent €1.3bn to acquire a large block on Via Monte Napoleone in Milan from US private equity group Blackstone last spring, in what was the largest European real estate deal for two years at the time. The luxury group also announced the $963mn purchase of a building at the corner of Fifth Avenue and 56th Street in New York last January, adding to a portfolio of flagship assets in other cities including Paris and Tokyo.

However, Kering has insisted it does not want to be managing a real estate portfolio as a business strategy, but rather that it makes the investments to support its labels.

“Once a brand is making over €3bn in sales, these [kinds of locations] become indispensable,” Kering chief executive François-Henri Pinault told reporters in February. But “just because a building is available in a premium location, it doesn’t mean we’ll buy it. We will take it only if it makes sense.”

The properties in Wednesday’s deal include the historic home of the Boucheron jewellery brand on Place Vendôme, which underwent a big renovation in 2018, and stores for Valentino and Balenciaga on Avenue Montaigne, just off the Champs Elysée. Both Boucheron and Balenciaga are owned by Kering. It bought a 30 per cent stake in Valentino in 2023.

>>> US After Hours Summary: SEZL +11.7% soars on uplifting guidance; SNAP -2.4%

After Hours Summary: SEZL +11.7% soars on uplifting guidance; SNAP -2.4% and META -1.3% slipping on reports Trump may suspend enforcement of TikTok ban

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: SEZL +11.7%, CSWC +0.6%

Companies trading higher in after hours in reaction to news: TALO +5.2% (Katmai West #2 successfully encountered commercial quantities of oil and nat gas), SLDB +5.1% (outlines priorities), IBRX +4.6% (regulatory update), BBAI +4.1% (appoints new CEO; files stock offering), EVH +2.1% (reiterated long-term outlook in investor presentation), SSRM +1.4% (provides update on incident), DUOL +1.3% (massive spike in U.S. users learning Chinese amid TikTok ban, according to TechCrunch), CODI +1.2% (amends management services agreement), SQ +0.3% (to pay $80 mln in fines), SDST +0.1% (stock offering)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: HOMB -6.4%, CNXC -4.7%, FUL -2.7%, OEC -2.7%, SNV -0.9%

Companies trading lower in after hours in reaction to news: SNAP -2.4% (Trump mulls executive order to suspend enforcement of the TikTok ban, according to The Washington Post), MNPR -1.5% (stock offering), CLLS -1.3% (stock offering), META -1.3% (Trump mulls executive order to suspend enforcement of the TikTok ban, according to The Washington Post), USAP -0.4% (shareholders approve acquisition by Aperam), ARMN -0.3% (2024 gold production), DD -0.3% (separation plan update; reiterates guidance), GOOG -0.3% (The AP to deliver real-time info to help Gemini app results), LLY -0.1% (FDA approves Omvoh for Crohn's disease)