LIVE MARKETS-Companies to be cautious using cash

Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com

COMPANIES TO BE CAUTIOUS USING CASH

Operating cash flows for Europe Inc. are expected to grow 7% in 2025, according to Citigroup equity strategists, but companies are likely to remain cautious in their spending, given the macro uncertainties.

"Despite resilient growth in operating cash flows, we find that 25E will be characterized by relatively muted growth in both payouts (dividends up slightly, buy-backs down) and investment (flat M&A and capex)," writes Citi strategist Beata Manthey.

On share buy-backs, Citi sees a 5% drop even as most sectors should see a pick up, as a "rollover is expected in Banks, Energy, and Materials, which together account for c50% of European buyback activity."

Citi Research analysts generally think capex will remain muted apart from select industries such as defence as companies wait for greater clarity on tariffs and U.S. policy.

"When it comes to investment decisions, companies will likely favour M&A over capex," writes Citi.

(Samuel Indyk)

FOR WEDNESDAY'S OTHER LIVE MARKETS POSTS:

MODERATE DOLLAR SELLING EXPECTED INTO MONTH-END CLICK HERE

STOXX MAKES TENTATIVE GAINS AS AEROSPACE, AUTOS PROVIDE LIFT CLICK HERE

EUROPE BEFORE THE BELL: FUTURES UP AS CEASEFIRE LIFTS RISK APPETITE CLICK HERE

A FRAGILE CEASEFIRE IS GOOD ENOUGH FOR MARKETS CLICK HERE