LVMH Share News (MC.PA)

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STOXX 600 set for weekly gains
  
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H&M shares slump on Q4 profit miss
  
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Food & beverage shares lag
  
 
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WHY TO EXPECT A HAWKISH ECB MESSAGE (1214 GMT)
Many analysts say a tug-of-war between markets and the ECB is underway. 
We don't know whether this is true. However, it's a fact that central bank officials, or at least some of them, have 
pushed back against market pricing of the monetary tightening 
path as they saw it as too dovish. 
Now markets focus has shifted to next week's ECB meeting.
According to Nomura analysts, euro area inflation numbers, due next week, for January "risk coming in softer than markets 
and consensus expect." 
"If this happens, we expect markets to challenge the ECB and bring down pricing of rate hikes beyond the February meeting as 
well as further cement pricing of rate cuts from September 2023 
onwards," they argue. 
"We expect a markedly hawkish ECB message in order to recalibrate market expectations on near-term rate hikes and put 
an end to market pricing of rate cuts during 2023," they add. 
Financial markets bet on the ECB's depo rate to peak at 3.2% in August 2023 and fall to 2.9% by May 2024, according to ECB 
short-term interest rate forwards. 
FTSE 350 BUY RECOMMENDATIONS SURGE (1122 GMT)
Buy recommendations for UK listed companies have risen to the highest level since at least 2015, as the FTSE 350 index 
kicked off the year up 4.5% in January. 
Two thirds of analysts' recommendations for the FTSE 350 companies are buys, just 8% are sells, according to data 
compiled by AJ Bell. 
FTSE 100                FTSE 350 
Buys  Holds  Sell      Buys   Holds  Sells 
s 
2015                47%    39%   14%        49%    39%    12% 
2016                47%    40%   13%        48%    40%    12% 
2017                45%    40%   15%        47%    39%    15% 
2018                49%    37%   14%        48%    38%    13% 
2019                52%    36%   12%        51%    38%    11% 
2020                46%    38%   16%        47%    39%    14% 
2021                54%    35%   14%        54%    35%    12% 
2022                57%    34%    9%        62%    31%    8% 
2023                57%    34%    9%        63%    29%    8% 
 
Average 2015-2023   51%    37%   13%        53%    37%    11% 
Source: Refinitiv data, analysts’ consensus 
However, AJ Bell investment director Russ Mould notes that analysts' top picks have not beaten the blue chip index once 
since 2015, other than in 2019. 
“This is not to poke fun. It just shows how hard picking individual stocks can be, even if it is your full-time job. 
Markets will tend to do what causes the greatest degree of 
surprise and analysts do not intentionally set to out to sit on 
the fence." 
Q4 EARNINGS: NOT GREAT BUT NOT A SHOCKER (1030 GMT)
Fourth quarter earnings season is in its early stages but results have been broadly in-line with expectations so far, 
according to Barclays equity strategists led by Emmanuel Cau. 
"Early Q4 results confirm what everyone seemed to have expected, i.e. slowing demand, margins pressure and an uncertain 
outlook for '23, but are not a shocker either," Barclays says in 
a note. 
Looking forward, Cau's team says the Fed and ECB meetings next week are likely to hold the fate of the recent rally, a 
rally that has seen the STOXX 600 jump near 7% this month, its 
biggest January gain since 2015. 
"The rebound in equities of the past 3 months or so has been largely built on market expectations of a dovish pivot in 
monetary policy," Barclays says. 
"Falling yields have acted as a tailwind for P/Es, but a lot of (too much?) dovishness seems priced in now, in our view," 
they say adding that the question next week will be whether the 
central banks push back on current market pricing. 
Money markets are pricing in rate cuts from the Fed this year and from the ECB early in 2024. 
"A dovish (but unlikely) tilt would likely be cheered by markets, while a hawkish surprise may lead to short term 
downside," Barclays writes, adding that the ECB will likely 
sound more hawkish, "which could add more upward pressure on 
euro-dollar." 
STOXX EDGES UP: EARNINGS, CENTRAL BANKS IN FOCUS (0845 GMT)
European shares are edging up as investors digest a mixed batch of earnings reports, ahead of a slew of central bank 
meetings next week. 
The pan-European STOXX 600 is up 0.1%, with losses in retailers offseting gains in the energy 
sector. 
Shares in the world's second-biggest fashion retailer H&M are down 6% after the company reported a much 
larger-than-expected dive in September-November operating 
profit, slammed by soaring costs and weakening consumer 
confidence. 
Shares of LVMH - Europe's biggest company by market value - opened lower but recovered, rising 0.8%. Some 
analysts expressed disappointment over the company's margins, 
which initially took some of the shine off its strong 
fourth-quarter sales figures. 
Investors are refraining from positioning too aggressively ahead of a week packed with central bank meetings, major 
economic data and a slew of megacap earnings. Markets expect 
policymakers at the Bank of England and European Central Bank 
(ECB) to deliver 50-bps rate hikes and for the Federal Reserve 
to raise rates by just 25 bps. 
STUMBLING AWAY (0800 GMT)
Chip giant Intel's grim earnings report along with mixed U.S data that showed a resilient economy but a labour 
market that remains tight will likely dominate investors' minds 
and dictate Friday's trading. 
The U.S. chip bellwether expects to lose money in the current quarter as two pillars of its success in the past few 
years -- the PC and data centre businesses -- face slowing 
demand.
"We stumbled ... we lost momentum," said Chief Executive Pat Gelsinger. 
In contrast, European chipmaker STMicroelectronics cited strong demand from automotive and industrial customers on 
Thursday as it beat earnings and sales targets. 
Meanwhile, better-than-estimated U.S. GDP data has provided a fillip to investors for some risk-on rally, with MSCI's 
broadest index of Asia-Pacific shares outside Japan 
at a nine-month high and set for its best ever 
January performance. 
The Japanese yen rose against the dollar after Tokyo's consumer inflation, a leading indicator of nationwide 
trends, touched a near 42-year high and reinforced market 
expectations that the Bank of Japan will soon have to step away 
from its ultra-easy policy. 
Before next week's central bank meetings (that's Fed, ECB and BOE on the deck) take all of investors' attention, the focus 
on Friday will be on the Fed's preferred inflation gauge, the 
personal consumption expenditures (PCE) data. The core PCE price 
index is expected to rise 0.3% in December, according to Reuters 
poll of economists. 
Key developments that could influence markets on Friday: Economic events: Sweden unemployment rate for December, 
Spain Q4 GDP data and core U.S. PCE data 
 
(Ankur Banerjee)