LIVE MARKETS-European autos: running on empty or about to shift gears?
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EUROPEAN AUTOS: RUNNING ON EMPTY OR ABOUT TO SHIFT GEARS?
Europe's autos and parts .SXAP sector has had a disappointing year, but a strong week, and major banks are taking differing views on the outlook for next year.
The index is up over 4% this week, helped by the Trump administration reversing rules on fuel economy standards finalised by the Biden government.
But the autos sector has fallen more than 3% this year, compared to a 14% gain for the STOXX 600 .STOXX. It is set for its second straight yearly drop after sliding over 12% in 2024.
And while Citi are not outright positive, they have upgraded the sector to neutral from underweight, based on improving EPS outlook and a potential boost from lower energy prices.
"SXAP underperformance has been justified by margin trends," writes Citi.
"These should stabilise in 2026," they add.
Goldman Sachs remains underweight autos, where they continue to see vulnerability to Chinese competition, both at home in Europe and in China itself.
"Chinese manufacturers have been gaining share both in Europe and in China," GS writes.
But they do see some green shoots, favouring some of the more premium automakers, such as Mercedes, BMW and Ferrari.
"We like the lower degree of organisational complexity at the Premium/Luxury Players," GS says.
They also believe that tariff headwinds and compliance with emission standards pose challenges but are "manageable" for the premium players.
(Samuel Indyk)
EARLIER ON LIVE MARKETS:
STOXX 600 HEADS FOR WEEKLY RISE CLICK HERE
EUROPE BEFORE THE BELL: FUTURES IN THE GREEN CLICK HERE
FIRMING FED CUT BETS BUOY STOCKS, UNDERCUT DOLLAR CLICK HERE
Where experts think the Fed is headed https://www.reuters.com/graphics/AUTOMATED-20251205/BENCHMARK-FED-RATE-ECONOMIST-POLL-OUTLOOK/lgpdqjwzwvo/chart.png
European shares rise, Wall Street futures higher https://www.reuters.com/graphics/GLOBAL-STOCKS/jnpwkjwrepw/chart.png
Europe's autos sector has lagged for two years 
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