DJ Global Equities Roundup: Market Talk

The latest Market Talks covering Equities. Published exclusively on Dow Jones Newswires throughout the day.

0811 ET - European markets mostly fall ahead of an expected higher open on Wall Street later. The Stoxx Europe 600 drops 0.1%, the FTSE 100 retreats 0.3% and the CAC 40 is down 0.5%, but the DAX gains 0.3%. Brent crude gains 1.6% to $69.86 a barrel. IG futures data show the Dow rising about 50 points at the open. "The day ahead looks quiet in terms of events, with U.S. new home sales providing one release of note," IG analysts say. "Aside from that, we're likely to see a growing focus on the Jackson Hole Symposium, where expectations are gradually shifting toward a more dovish scenario than previously priced in." (philip.waller@wsj.com)

0747 ET - Despite IG Design Group's trading in fiscal 2022 starting well, it has faced some cost headwinds, Canaccord Genuity says. The designer and manufacturer of gift packaging and stationery has experienced cost headwinds especially in terms of sea freight, as well as regional operational disruption due to the impact of pandemic-related restrictions on logistics, Canaccord says. Still, earnings to date have been in line with the board's expectations thanks to a combination of strong sales growth and actions taken across the company to mitigate cost pressures, the Canadian investment bank says. "The recently announced ambitious new growth plan to double revenue and Ebitda through a combination of organic growth and acquisitions should further support the group's medium-term growth ambitions," Canaccord says.(anthony.orunagoriainoff@dowjones.com)

0737 ET - Ritchie Bros. Auctioneers' acquisition of Euro Auction will be easier to integrate thanks to similar culture between the two companies, National Bank of Canada says. The machinery auction house acquired Euro Auctions on Aug. 8 for around $1.08B, which conducts unreserved heavy equipment auctions with onsite and online bidding. "The integration complexities when compared to the highly disruptive IronPlanet deal [in 2017] seem to be more benign as Euro Auction's ethos is much closer to that of legacy RBA," the investment bank says. (adriano.marchese@wsj.com)

0735 ET - German gross domestic product increased by 1.6% in the second quarter on the back of strong household spending and a lower savings rate, HSBC says. Household spending should continue to contribute substantially to GDP growth in 3Q, HSBC's chief economist for Germany Stefan Schilbe says. Exports and business-fixed investment grew slightly, but this could change once supply-side constraints ease, the economist says. Despite rising coronavirus infections, German GDP growth is expected to be substantially higher in 3Q than in 2Q. HSBC forecasts the German economy will grow 3.1% in 3Q, followed by more "normal" growth rates in the quarters thereafter, Schilbe says. For the whole of 2021, HSBC forecasts an expansion of the German economy of 3.4%. (maria.martinez@wsj.com)

0730 ET - A new partnership with Beyonce and Jay-Z is spurring performance at U.S. jeweler Tiffany, social-media agency Launchmetrics says. Since being announced as the official ambassadors for the brand --now part of French luxury-goods group LVMH-- the pop-culture power couple has garnered $10.5 million in media-impact value, a measure of the monetary value ascribed to brand campaigns, according to Launchmetrics. One post alone on Beyonce's Instagram account generated $2 million in value in just one day, the agency says. Tiffany said this week that a new campaign starring the Carters marks a new creative direction for the brand, and Launchmetrics agrees: "With Beyonce and Jay-Z becoming the new campaign faces, Tiffany is yet again reaching new audiences and successfully driving brand performance," the agency says. (joshua.kirby@wsj.com; @joshualeokirby)

0728 ET - Bulgari's decision to make Priyanka Chopra Jonas its official ambassador looks smart given the value the Indian actress was already generating for the jeweler, part of French luxury-goods company LVMH, social-media agency Launchmetrics says. In the first half of 2021, Chopra Jonas helped Bulgari with $8.9 million in media-impact value which measures the monetary impact of brand campaigns. This made her the second-most valuable celebrity for jewelry companies in the period, after Egyptian star Yasmine Sabri for Richemont's Cartier, according to Launchmetrics. Chopra Jonas's announcement of the ambassadorship alone brought Bulgari close to $1 million in MIV, more than six times the brand's own announcement post. This demonstrates the power of celebrities to drive heat and sales, the agency says. (joshua.kirby@wsj.com; @joshualeokirby)

0725 ET - Although Zurich Insurance's first-half earnings beat expectations and its business mix is balanced, its value is now fairly reflected in its shares, Jefferies says. Consensus expectations are high, but may be overly optimistic on how much underwriting returns will offset investment income run-off, the brokerage says. "Although we agree that Zurich has an exceptionally well-positioned business mix for the current market conditions, we struggle to see additional upside from here," Jefferies says. In addition, the Swiss insurer may not be able to sustain consensus predictions of 92.5% in combined ratio going forward, after its 1H ratio of 93.9% was the best ever reported, Jefferies says. The brokerage maintains its hold rating. Shares are up 0.1% at CHF407.80. (edward.frankl@dowjones.com)

0718 ET - Policy reforms proposed by Zambia's incoming government could hurt the profitability of the country's mining industry, says Yvonne Mhango, an economic analyst at Renaissance Capital. Opposition leader Hakainde Hichilema's victory last week gives Zambia, which became Africa's first pandemic-era sovereign defaulter last year a chance to recover from its current economic woes. But the incoming government will move ahead to deliver on its campaign promise of reforming Africa's no.2 copper producer's mining sector which includes tax reforms. "We view these proposed policies as potentially negative, as they may reduce the profitability of mining firms," Ms. Mhango says. "The earliest we may hear of any changes to mining taxes is in late September/late October, when the 2022 budget is typically due." (Nicholas.Bariyo@wsj.com;@Nicholasbariyo)

0715 ET - Adidas's collaboration with Puerto Rican rapper Bad Bunny has proved a success for the German sportswear company, social-media agency Launchmetrics says, noting that celebrity tie-ups remain a surefire spark for brand heat. The partnership with Bad Bunny generated $12 million in media-impact value, a metric used by Launchmetrics that ascribes monetary value to brand campaigns. A single post on the rapper's Instagram page accounted for $2 million in value, Launchmetrics says. "As brands look for new ways to engage with their audiences, collaborations with celebrities seem to be the go-to for bringing excitement, revenue and media-impact value," the agency says. (joshua.kirby@wsj.com; @joshualeokirby)

0700 ET - Advance Auto Parts says it saw higher incentive compensation within its professional business, wage inflation within store labor, higher delivery costs associated with professional delivery and normalized hours of operation in 2Q compared with the prior year. All of that led to 2Q selling, general and administrative expenses rising to $944.3M from $833.9M in the same period last year. The automotive-parts retailer says the cost increases were partially offset by a decrease in Covid-19-related expenses. (dave.sebastian@wsj.com; @depsebastian)

0654 ET - Finance companies led Indian shares higher, with the benchmark Sensex rising 0.7% to close at 55958.98. Bajaj Finance added 3.3% and ICICI Bank gained 1.7%. HDFC Bank climbed 2.3% after it targeted issuing 300,000 credit cards a month in two months--a move that Jefferies says is likely to boost its revenue potential. The session's biggest gainer was Bajaj Finserv, which rose 7.9% after getting approval to sponsor a mutual fund, notes Jefferies. A mixed bag of companies led losses, with Nestle India dropping 1.3%, Infosys shedding 1.1% and Asian Paints falling 0.9%. (yongchang.chin@wsj.com)Jefferies has an underperform rating on Wood Group. "Wood Group Shares Fall as 1H Cash Disappoints -- Market Talk," at 0809 GMT, incorrectly said the rating was outperform.

(END) Dow Jones Newswires

August 24, 2021 08:11 ET (12:11 GMT)

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