[MARKET ANALYSIS] ASML boosts the AEX, whilst LVMH weighs down the CAC 40

• European equities are trading mostly lower. The main outperformer in the early trading hours is the AEX (+1.0%), boosted by gains in ASML (+4.7%) after the Co. reported strong earnings in their Q4 report. The CAC 40 (-1.1%) underperforms, weighed down by losses in Luxury giant LVMH (-7.6%) after the Co.’s Q4 results underwhelmed.
• European sectors are trading with a negative bias. Leading sectors is Tech (+1.7%), underpinned by tech giant ASML (+5.6%) after the Co. posted strong Q4 earnings, elevating sentiment for the wider tech industry. Also leading is Basic resources (+0.9%) and Energy (+0.5%), with the former sector gaining strength on the back of stronger metal prices and the latter on the back of firmer crude prices. Contrary to the gains in the tech sector, Consumer Products & Services (-2.8%) lags, pinned back by losses in LVMH (-6.4%) after the Co. reported weak earnings, weighing down sentiment for other luxury brands like Kering (-4.7%) and Hermes (-1.8%)
• Movers this morning include Pets at Home (+4,4%) with the Co. gaining after reporting a strong Q3 trading update. Another key mover is Fresnillo (+2.0%) with the Co. gaining after beating 2025 gold guidance, further increasing sentiment in the Basic Resource sector. On the downside broker downgrade for BBVA (-1.7%) has led to the Co. trading lower this morning.
• US equity futures are mostly positive in the pre-market, with the NQ (+0.8%) outperforming on the back of increased sentiment for the Tech sector after positive ASML earnings. Furthermore, reports that China is said to have approved imports of over 400,000 NVIDIA (NVDA) H200 chips, further underpinning the tech sector.
• Looking ahead all eyes will be on the Fed's policy announcement and Fed Chair Powell’s post policy announcement. Earnings ahead include Microsoft, Meta, Tesla, Lam, ServiceNow, IBM, GE Vernova, AT&T, Starbucks, VF Corp and Danaher.

ASML's strong Q4 earnings have propelled the AEX higher, indicating robust demand in the tech sector and boosting sentiment across European markets. In contrast, LVMH's disappointing results have negatively impacted the CAC 40, signaling potential weakness in the luxury segment and raising concerns about broader consumer trends. Overall, this divergence highlights the varied health of sectors in European equities ahead of key upcoming earnings announcements.