Early Morning Call: Europe indices open marginally higher ahead of US CPI

US CPI data

APAC equity markets fell overnight, following the lead of US indices, as investors await key US CPI data.

US consumer price index (CPI) is expected to rise by 5% in April on an annual basis, unchanged on last month. Core CPI, which excludes food and energy prices, is forecast to rise by 5.5% year-on-year (YoY), after 5.6% the previous month.

While hiking interest rates by 25 basis points (bp) last week, the Federal Reserve (Fed) changed the wording of its statement, signalling a higher probability for a pause in the tightening cycle in June. However, Fed chair, Jerome Powell, reiterated that any decision remains data-dependent.

Earnings

ASOS swung to a first half (H1) loss. The online retailer felt the squeeze on household budgets, but said it was confident of a return to profit in the second half and beyond. The group posted adjusted loss before tax of £87.4 million, compared to a profit of £14.8Mln in the same period last year.

JD Wetherspoon forecast record full-year (FY) sales and its annual profit to be closer to the top-end of market expectations. The company said like-for-like sales rose 9.1% in first three months of 2023 from pre-pandemic levels, and sales during the Easter week were the highest seen by the group.

Elsewhere in Europe, TUI expects "significantly" higher operating profit in 2023, helped by strong bookings for the summer. TUI's revenue reached €3.2 billion in the first quarter, compared to €2.1Bln a year ago. Underlying EBIT swung back to profit, at €88Mln, after a loss of €242Mln. The world's largest holiday company says bookings for the summer season are currently 13% ahead of last year.

In France, Credit Agricole doubled its net income to about €1,23Bln in the first quarter (Q1), beating expectations of €816Mln. FICC trading sales jumped 42%, outperforming its bigger French rival, BNP Paribas.

Dutch bank ABN Amro also beat analyst expectations with a 77% jump in first quarter net profit to €523 million, thanks to higher rates and lower costs.

Airbnb shares shed 11% in extended hours on Tuesday after posting disappointing earnings and expectations for the current quarter. The vacation rental booking company earned 18 cents per share in the first quarter, two cents lower the analysts' forecast. Revenue rose 20% to come broadly in line at $1.80Bln.

During the first three months of 2023, active listings increased by 18% YoY. However, if bookings rose 19% to 121.1million, they were lower than the 122.4 million expected. And the company also warned the market it forecast fewer bookings and lower average daily rates this quarter.

Walt Disney, the largest media company in the world, is due to report after market close. With Bob Iger Back at the helm, investors are curious to see what impact his return has had on the company's different divisions. The street expects earnings of 95 cents per share, to be compared with $1.08 for the same quarter a year ago. Revenue is anticipated to rise by 7.5% to $21.80Bln.

In February 2020, Iger decided to move on after 15 years as CEO of the the Walt Disney company. Another Bob, Bob Chapek, then chairman of Disney Parks, became the new CEO, but not for long. Last November, in a surprise move, Disney's board brought Iger out of retirement in an attempt to boost profits and put a cap on swelling spending at Disney Plus.

Disney's last earnings report beat estimates, thanks to its theme parks. But streaming services saw their first subscriber decline since launching at the end of 2019. Iger announced then the group was embarking on a significant transformation, announcing 7,000 job cuts as part of a strategy to reduce costs by $5.5Bln.

Commodities

US crude oil and gasoline inventories rose last week, according to the American Petroleum Institute. Crude stocks rose by about 3.6 million barrels last week. Gasoline inventories also rose by 400,000 barrels, but distillate stocks fell by 3.9 million barrels.