EUROPEAN OPEN: HSBA LN annual profits decline though still top estimates; DGE LN cuts dividend; Ofgem to reduce energy price cap by 7%; FTSE100 indicative changes suggest BBOX LN and IGG LN to join, while EZJ LN and RMV LN to leave; NVDA earnings due

• EUROPEAN OPEN: European equities have opened on the front foot. Overnight, APAC stocks traded higher amid a rebound on Wall Street after Anthropic’s presentation helped soothe AI concerns. President Trump delivered a record-long State of the Union address, defending his leadership and describing the past year as a “turnaround for the ages”; he promoted tariffs as strengthening the US economy, and said they would “substantially replace” income taxes; he offered limited details on Iran, China and Ukraine. In Japan, PM Takaichi nominated academics Ayano Sato and Toichiro Asada to the BoJ policy board, replacing Asahi Noguchi and Junko Nakagawa; analysts said the picks are viewed as reflationist and dovish, and may reduce expectations of near-term rate hikes. Asia FX rose amid a weaker USD and steady CNY gains. Bitcoin climbed above USD 66k, but pared gains during Trump’s SOTU address. Gold rose, recovering from its fall in the previous session, as traders assessed uncertainty over US import tariffs, concerns about an US military buildup in the Middle East ahead of upcoming nuclear talks with Iran, and a weaker USD. Oil rose as traders assessed prospects for a US-Iran nuclear deal ahead of talks, with Brent near USD 71/bbl and WTI near USD 66/bbl after a fall in the previous session; Trump said Iran was reconstituting its nuclear programme, heightening speculation over potential military action. Today’s docket features final Eurozone inflation stats, as well as earnings from Nvidia (NVDA) after the US close (see below for primer).
• STOCK SPECIFICS: In index news, FTSE 100 indicative reshuffle suggests Tritax Big Box Reit (BBOX LN) and IG (IGG LN) are expected to join the FTSE 100, while easyJet (EZJ LN) and Rightmove (RMV LN) are set to drop out; a final decision is due on 4th March. In financials, Chancellor Reeves is facing calls from the Association for Financial Markets and KPMG to cut bank taxes, urging the phasing out the bank levy and avoiding further increases, and warning that sector-specific taxes raise costs for customers and risk undermining competitiveness. HSBC (HSBA LN) lifted its ROTE target to 17%+ through 2028; annual pretax profit -7% to USD 29.9bln (exp. 28.9bln), amid USD 4.9bln in one-off charges; declared a 0.45 final dividend, and targets USD 900mln in synergies from Hang Seng, with USD 600mln in restructuring costs. Santander (SAN SM) proposed a final dividend of EUR 0.125/shr for 2025, and will increase its cash dividend payout to around 35% of group profits from 2027 results onwards, with around 15% allocated to share buybacks; expects to see continued growth in customers, forecasting its customer base will grow from 180mln in 2025 to 210mln+ by 2028. In utilities, Ofgem announced that the UK energy price cap will fall by 7% from April (or GBP 117). E.ON (EOAN GY) will raise its investment plan by EUR 5bln (to EUR 48bln) for 2026-2030, with around EUR 40bln allocated to energy networks; said the increased spending addresses grid bottlenecks as wind and solar projects and power-intensive users such as data centres seek connections across Europe. In consumer sectors, the Arnault family has raised its stake in LVMH (MC FP) to 50.1% from 49%. Diageo (DGE LN) cut FY guidance for a second time, and now sees a 2-3% decline in organic net sales, as demand weakens in the US and China. The company also said it will reduce its dividend. In autos, Aston Martin (AML LN) forecast another year of free cash outflows, saying it expects to materially improve on the GBP 410mln outflow in 2025, but gave no timeline for turning positive; it reported a GBP 493mln total loss last year, with US tariffs adding pressure to its turnaround. Lucid (LCID) shares fell 4.2% in extended trading after it reported a wider than expected Q4 loss despite revenue growth beating estimates, underscoring ongoing profitability challenges, while its FY26 vehicle production view also missed expectations. In materials, Heidelberg Materials (HEI GY) expects FY26 results from current operations of EUR 3.4-3.75bln (vs 3.4bln in 2025) as core markets in Europe and North America stabilise; return on invested capital rose to 10.4% in 2025 (vs 9.9%) and is forecast to remain above 10% this year. In healthcare, Sandoz (SDZ SW) FY25 revenue USD 11.09bln (exp. 11.1bln), with biosimilars +13% to USD 3.29bln, and generics +2% to USD 7.79bln; Core EBITDA was USD 2.41bln (exp. 2.36bln); sees 2026 revenue growth in the mid-to-high single-digits, and proposed a USD 0.80 dividend. In industrials, Adecco (ADEN SW) Q4 adj. EPS of EUR 0.76 (exp. 0.71), revenue +3.9% Y/Y to EUR 5.96bln; sees Q1 organic growth of about 3.5%, and proposed a CHF 1.00 dividend; sees gross margin and SG&A expenses, ex-one-offs, to be broadly stable sequentially. In tech, SAP (SAP GY) receives a cautious mention in Bloomberg, which writes that investors and partners are questioning the value of its AI products; some early users have reportedly expressed disappointment, raising concerns as the company looks to AI to drive growth and counter competition from LLMs. HP Inc. (HPQ) shares fell almost 5% in extended trading after it issued mixed guidance, with Q2 earnings expectations below estimates, and FCF seen at the low end of its range, overshadowing stronger-than-expected Q1 results. Workday (WDAY) shares fell more than 8% in extended trading following a soft outlook. In notable broker updates, Endesa (ELE SM) was upgraded at BNP Paribas; Commerzbank (CBK GY) was upgraded at Keefe Bruyette; Severn Trent (SVT LN) was downgraded at Kepler Cheuvreux.

TODAY’S AGENDA:

• DAY AHEAD: Eurozone final inflation data for January is expected to see HICP revised down to 1.7% Y/Y from 2.0%, and the core rate at 2.2% Y/Y from 2.3%. The US Day features weekly MBA mortgage applications data. Today’s speakers include: Fed’s Barkin (2027 voter, neutral; no text expected, but there is a Q&A) in a moderated discussion, Fed’s Schmid (2028 voter, hawk; no text expected, but there is a Q&A) on the policy outlook, Fed’s Musalem (2028 voter, hawk; no text expected, but there is a Q&A) will speak on the role of the Fed; elsewhere, Riksbank’s Jansson and Thedeen, Norges Bank’s Bache and Longva are due. Notable US companies reporting today include: Nvidia (NVDA; preview below), Salesforce (CRM), TJX Companies (TJX), Lowe’s Companies (LOW), Synopsys (SNPS), Snowflake (SNOW). On the supply slate, Germany will sell EUR 2bln of 2038 and 2041 debt, and the US Treasury will auction USD 28bln of 2yr FRNs and USD 70bln of 5yr notes.
• PRIMER - Nvidia (NVDA) Earnings: Investors closely watch its metrics given its leadership in AI, with its guidance also of paramount importance, in addition to the Blackwell production ramp, and gross margins. Nvidia continues to benefit from surging CapEx, with AMZN, GOOGL, META and MSFT having already committed USD 622bln in 2026, while CEO Huang has reiterated the strong trajectory of AI chip demand. Although, some do note signs of risk to Nvidia’s long-held dominance are also emerging from hyperscalers’ plans to design their own cheaper AI chips. Participants will be looking at the geopolitical landscape as commentary regarding China still remains a wildcard. Options pricing suggests a move of roughly +/- 5.5%. In terms of Nvidia performance, YTD shares are up 2.7% and trading at around USD 190/shr, vs ATH’s of USD 203.20/shr. After earnings and the conference call, attention turns to the GTC in mid-March.
• Newsquawk’s full Nvidia (NVDA) earnings primer is here