[MARKET ANALYSIS] Tentative trade in early hours and ahead of key US data; Utilities and Construction outperform

European bourses are mixed to lower, broadly tracking similarly mixed APAC trade. The DAX is the key outperformer and the only major index in positive territory, though there is little on the macro front to clearly explain the move. Data this morning included Eurozone construction PMI, which beat both expectations and the previous level, and German unemployment, where the unemployment rate came in line with expectations.
European sectors are mixed but slightly skewed to the red. Utilities (+1.9%), Construction & Materials (+1.9%), and Real Estate (+1.5%) are outperforming. Utilities gained on strong performances from key companies such as Iberdrola (+2.1%), Enel (+2.4%) and National Grid (+1.4%), charging up sentiment for the sector. Strength in Construction appears linked to the Eurozone PMI beating expectations, which has supported modest gains in construction-related stocks. On the downside, Energy (-1.7%), Consumer Products & Services (-1.5%) and Media (-1.0%) lag. Energy lags due to lower crude prices and geopolitical tension with Russia-Ukraine eases for the time being.
Movers include gains in Skanska (+2.8%) after the Co. divested project in Copenhagen for SEK 890mln, further propelling gains for the construction sector. Shell (-2.5%) weighed on the Energy sector after shares fell following a deal to acquire a stake in Chevron’s Angola oil blocks, according to Bloomberg.
US equity futures are mixed/lower, with slight gains in the YM (+0.1%) and RTY (+0.1%), while the ES (-0.2%) and NQ (-0.3%) are modestly lower. Not much on the macro front this morning; ahead, markets will focus on ISM Services PMI, ADP, JOLTS and remarks from Fed’s Bowman.