LIVE MARKETS-Better than bonds & FANGs

* European stocks extend Thursday's gains; STOXX 600 +0.9% * German real estate stocks up after some comforting news on Berlin rent freeze * Deutsche Wohnen +9.9%, Vonovia +5.3% * CNH Industrial +5.9% after reports co considering hiving off truck unit Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters and anchored today by Josephine Mason. Reach her on Messenger to share your thoughts on market moves: josephine.mason.thomsonreuters.com@reuters.net BETTER THAN BONDS & FANGS (1156 GMT) While investors are busy gobbling up negative-yielding bonds, shunning risky assets, to safeguard their money from the ongoing U.S.-China trade spat and a teetering global economy, one stock is benefitting from the rush for bonds. Marketaxess - the electronic bond trading platform - has more than doubled in value in the last one year and is now valued at nearly $15 billion. The electronic model helps traders forgo investment-bank middlemen to buy and sell bonds. Amid tit-for-tat tariffs and rising tensions between U.S. and China, monthly bond futures volumes have surged to 2008 highs, helping Marketaxess' commissions-based business pick up strongly in the last few months. (See bond vols chart below) It recently acquired a provider of an electronic U.S. Treasuries marketplace, helping it enter the half-a-trillion-dollar-a-day market. Baillie Gifford, Britain's 8th biggest fund management firm, is the biggest shareholder in Marketaxess. Marketaxess vs. FANG YTD performance: U.S. bond futures volumes: (Thyagaraju Adinarayan) ***** AS SUN SETS ON SUMMER, WHAT NEXT FOR STOCKS? Most global stock indices have notched up losses this month - Denmark, Romania, Italy and Switzerland are the only ones in Europe to eke out any gains. See the chart below for performance as of yesterday: Still, the bullish mood around the U.S.-China trade dispute ahead of the weekend is giving European bourses a lift, ending the month on an upbeat note. But some analysts are warning investors may be getting a little ahead of themselves. After all, little has changed - the latest batch of U.S. import duties on Chinese goods will go into effect on Sunday and the two sides have had talks about having talks. "Investors are buying into the trade war optimism theme although if one looks through the Chinese press little optimism around U.S. trade war is evident," says Peter Garnry, head of equity strategy at Saxo Bank. Investors appear to be in holiday mood still, but summer is nearly over. Labour Day on Monday marks the end of summer driving season in the United States and is considered the unofficial close to summer. And Garnry's pretty downbeat about prospects for the month ahead. The major event will be the ECB's next policy meeting on Sept. 12 when the bank is expected to cut rates and unleash a fresh round of stimulus to help shore up the flagging economy. That alongside more cuts coming later in the year have helped drive the equities market higher in recent months and are largely priced into the market now. But Garnry thinks sentiment around ECB policy will turn sour. "We expect equities to come under pressure in September as central banks will deliver more easing, but it will eventually be viewed as weakness compared to initial positive reaction," he says. A drop in September wouldn't be unusual though. The pan European STOXX 600 has fallen on average about 1.3% in the month, according to data going back to 1986. The chart below shows the typical September path for the index. Signs are also emerging in the futures market that investors are going timid ahead of the weekend. German stock futures broke through a major resistance at 11,850 yesterday, but closed below it. This morning, they opened above that level which was a signal of strength. But if the futures cannot push above it before the weekend, it would suggest investors don't want to put too much risk on the books, says Garnry. (Josephine Mason) ***** DON'T GIVE UP ON STOCKPICKING! (0846 GMT) The popularity of passive investment that's fueled the decade-old U.S. stock market bull run shows no signs of dropping and the rewards have been huge: * the S&P 500 is up 333% from its 666 intraday low hit on March 6 2009 * it is 85% above the previous cyclical high reached in October 2007 * the biggest drawdown through this cycle was in Q4 2018, but it only took four months for that to be reversed * compare that with the MSCI AC World excluding the US, which is still below its 2007 peak "For most other markets, this has been a lost decade," say Citi's global strategy team in a report published today. But don't despair - there are still some gems to be had, so don't give up on stockpicking entirely, they say. The team screened the MSCI ex U.S. index for $5 billion plus market cap companies that have beaten the U.S. on EPS growth (above 6% per annum), DPS growth (above 10% per annum) and profitability (pre-tax margin of 12%) since 2012. Those U.S. metrics compare with a meagre 1% EPS growth per year for regions outside of the United States and DPS of 2% per year. The team has now identified 45 stocks that have had a better fundamental performance than the U.S. market. Out of those, 21 companies are trading on a PE below the U.S. 12-month forward PE of 17 times. So plenty of cheap valuations on offer. The not so great news for Europe? There are only five companies from the region and they're German and UK companies on the list - Hannover Re, Henkel, Legal & General, Ashtead Group, Berkeley Group. Europe versus U.S.: (Josephine Mason) ***** OPENING SNAPSHOT: GERMAN REAL ESTATE RALLIES (0733 GMT) European shares are holding at the Aug. 2 highs hit yesterday and look set to end the last day of the month on a positive note as investors pile into riskier assets amid signs that the United States and China are on friendlier footing, albeit coming from a low base. Investors are also tidying up their books ahead of the month end. The pan European STOXX 600 is up 0.5%, with all the major bourses firmly in positive territory. Stock indices are lower for the month though. Among individual moves, German real estate companies are leading the charge after a German newspaper reported the rent freeze planned by Berlin's regional government might be less strict than previously expected. Vonovia is up 5% and the biggest gainer on the DAX 30, Deutsche Wohnen has rallied 11.4% and is top of the STOXX 600 pack and LEG Immobilien is up 3.2%. The real estate index is up more than 2% at its highest since end-July. Milan-listed shares in Italian-American industrial vehicles maker CNH Industrial jumped 4.2% after reports the company is considering spinning off its truck unit Iveco. The only sectors under pressure are telecoms. (Josephine Mason) ***** AHEAD OF THE OPEN: FRAGILE GAINS (0649 GMT) Hopes that Washington and Beijing will soon hold face-to-face talks over their messy trade spat are providing further cheer to European stock futures this morning, extending yesterday's gains that saw benchmarks end the day close to one-month highs. While the market is only ever one Presidential Tweet away from a turn in the mood, the gains are fragile ahead of the long U.S. weekend with the latest round of U.S. tariffs on China goods hitting on Sunday. Disappointing retail sales from Germany will also stir worries that the slowdown in manufacturing may now be hurting consumer spending in Europe's top economy. For now investors are upbeat with the United States and China discussing the next face-to-face meeting and China yesterday holding back from all-out retaliation in what would have been a severe escalation of the spat. It's been a rocky month for European stocks though - this week's gains fueled by China trade hopes and the ending of Italy's three-week political crisis have helped markets recoup most of the ground lost in early August after Trump's threat to hit China with more punitive duties. Except for Switzerland, all the major bourses are in the red this month though - August is typically one of the weakest months of the calendar year as investors head to the beach for the summer holidays, but even so the FTSE 100 is heading for its worst monthly performance since before the Brexit vote. In corporate news this morning, Italian-American industrial vehicles maker CNH Industrial , is considering a possible spin-off of its truck unit Iveco as part of a wider reorganisation plan. Its shares are expected to rise 5% on the news, according to one dealer. CNH Industrial's main shareholder is Exor, the holding group of Italy's Agnelli family. Norwegian industrialist John Fredriksen says he is seeking investors to take larger stakes in his companies, which include oil-tanker firm Frontline, dry bulk shipper Golden Ocean, and rig owner Seadrill, as well as fish farmer Mowi, and could relinquish control of operations as part of a plan to reduce his workload. German consumer goods companies Beiersdorf and Henkel may come under pressure after U.S. rival Ulta Beauty reported weaker-than-expected results and warned on FY profits. Its shares sank as much as 22% in after hours trading. Ferrexpo shares are seen lower after a review of the use of funds that were donated by the iron ore pellet producer to a charity in Ukraine concluded that some of the money could have been misappropriated. One dealer says the shares will fall 3%. Top headlines so far: UK house prices rise in August at fastest pace in 3 months - Nationwide Deutsche Bank reviews cuts to German retail operations - Wirtshaftswoche CNH Industrial considers spin-off of Iveco truck unit - source BNP Paribas plans bid for Deutsche Bank's equity derivatives Vodafone UK appeals move to ease price caps on BT business lines Novartis begins hunt for piece of Roche's growing MS empire FOCUS-Thyssenkrupp CEO's last roll of the dice: sell the family silver Ferrexpo says some funds to Ukraine charity could have been "misappropriated" Premier Foods appoints new CEO, says finance head to step down (Josephine Mason) ***** EUROPE SEEN EXTENDING GAINS (0522 GMT) Talks about having talks between Washington and Beijing are expected to continue lifting spirits and stocks in Europe today, the last trading session of the month ahead of a long U.S. bank holiday weekend while the United States prepares to impose the latest round of tariffs on China on Sept. 1. Investors are also likely to tidy up books ahead of the month-end. Asian shares jumped to one-week highs overnight after U.S. President Trump said some trade discussions were taking place with China on Thursday, with more talks scheduled. That followed placatory comments from China's Commerce Ministry earlier in the day. Europe's benchmark indices closed near to one-month highs yesterday, extending what has been a remarkable turnaround over the past week to recoup ground lost at the start of the month when U.S. President Trump threatened fresh tariffs on one of the United States' top trading partner, reigniting concerns about the trade dispute. "There's always that nagging doubt that we're only a Presidential tweet away from another sharp sell-off and for all of the gains of the last few days, and what appears to be a fragile truce, the fact remains that tariff barriers will increase further on the 1st September, increasing the costs of doing business for companies worldwide," says Michael Hewson, chief market analyst at CMC Markets UK. IG financial spreadbetters expect London's FTSE to open 19 points higher at 7,203, Frankfurt's DAX to open up 38 points at 11,877, and Paris' CAC to rise 12 points to 5,462 at the open. (Josephine Mason) ***** (Reporting by Danilo Masoni, Josephine Mason and Thyagaraju Adinarayan)