CAPIS Capital Institutional Services : European Close January 28th, 2016

After a decent start to the day indices moved lower a couple of hours in before attempting a short-lived rebound that stopped at the US open. All major European markets moved off with all sectors but Energy and Basic Resources lower. Healthcare and Autos saw losses in excess of 3% as pharmas took it on the chin today. Energy names rallied with oil up on a headline from the Russian press. It noted their Energy Minister said Saudi Arabia has proposed that each oil producer cut output by 5%. A meeting in February is said to be planned (This has since been denied). Volumes were again lower, off nearly 20% vs the recent 5 days activity.

Italian banks saw sharp losses today with Italy yesterday reaching a deal with the EU to let banks group bad debts into securities back by the government. Additionally, TTN reporting that the gov there is looking at merging Monte de Paschi -7.9%, Banca Popolare di Milano -9.8%, and UBI -5.9%.

Despite 4Q net sales coming in just light of estimates Electrolux +4.2% traded to the upside today as the operating loss was considerably less than expected. The $23.7M loss was of course created by the $175M break-up fee that was paid to GE on the failed acquisition. The view is for 3-4% growth in the US this year with Europe up 2-3%.

Atlas Copco -7.2% closed at lows despite seeing 4Q revenue inline with estimates and noting overall demand will remain at current levels. However, order levels are down in the US, China, and Brazil. Operating profit was light.

Bouygues -1% along with Aeroporte de Paris -.9% announced they will build and manage a new Tehran airport terminal. Airbus -.8% won a contract to supply $25B in aircraft to Iran as well.

Tonight, focus will be in Japan with the BoJ statement out along with CPI, Industrial Production , and Vehicle Production. The annual rise is the Monetary Base is expected to remain at ¥80T. SK Industrial production out as well. In Europe, EZ CPI due with UK sentiment readings expected. Retail sales expected in Germany with French GDP and CPI out. Honda and Sony to report with only a handful of names expected to release in Europe.