[MARKET ANALYSIS] European bourses broadly softer to start Q3, softer NKE outlook weighs on its European peers

European bourses (STOXX 600 -0.2%) start Q3 on a softer footing, with Germany's DAX 40 (+0.2%) the only index printing modest gains; perhaps welcoming recent pension reform progress and the possible involvement of the Bundesbank. Final manufacturing PMI figures were broadly positive, with the majority of PMIs being revised higher. Commentary was relatively upbeat, with S&P stating that the sustained growth was accompanied by a welcome cooling of cost pressures.
Sectors tilt to the negative side. Chemicals (+0.7%), Telecoms (+0.3%) and Health Care (+0.3%) are the top 3 sectors. To the downside lies Media (-1.6%), Consumer Products & Services (-1.2%) and Real Estate (-0.8%).
An M&A story for Schneider Electric (-2.3%). The Co. acquired Aker's (+6.6%) stake in Cognite for USD 3.1bln in cash. Markets have taken this as a negative for Schneider, with analysts at JPMorgan stating that the deal is very expensive and slightly unhelpful, adding that it will only add c. 0.4% to group sales.
Key movers include: AB Foods (-2.1%), as Primark LFL sales dropped by 2.2% and stated a profit-hit at its sugar unit due to the Iran conflict; Galderma (-5.6%), the US FDA rejected its Botox treatment; Air Liquide (+1.8%), to invest over USD 170mln to assist SK Hynix build a global AI memory ecosystem; Nokia (+1.5%), upgraded to Buy at Danske Bank.
Following on from Nike's (-3.3% pre-market) earnings after-hours, its European peers have come under pressure (Adidas -1.1%, JD Sports -1.7%). Despite the stronger-than-expected Q4 earnings, its outlook seemed to cloud the broader sportswear space. The Co. guided a further drop in revenue through H1'27 and commented on further weakness in China.
US equity futures are softer across the board, with underperformance in the NQ (-0.5%). Overnight, Business Insider reported that Microsoft (+1.0% pre-market) is planning to announce fresh job cuts of under 2.5%.