Nov 7 - Welcome to the home for real-time coverage of European equity markets brought to you
by Reuters stocks reporters and anchored today by Danilo Masoni. Reach him on Messenger to share
your thoughts on market moves: firstname.lastname@example.org
BREXIT ODDITIES (DOES SOMEONE KNOW SOMETHING WE DON'T?) (1626 GMT)
The Brexit saga is a tough one to cover, let alone to trade on, particularly in the last few
It's hard to read across and get a feel from the flurry of headlines hitting the wire these
last few hours. Consider this in the last two hours:
15:26 Irish PM sees fading chance of Brexit deal in November
15:14 BREXIT: UK EMERGENCY CABINET MEETING TO SIGN OFF BREXIT DIVORCE DEAL SET TO
HAPPEN EITHER TOMORROW OR MONDAY - POLITICS HOME REPORTER
15:01 EU's Barnier says more work needed for Brexit deal
14:52 UK PM May Invites Ministers To Read Nearly-There Brexit Text-Bloomberg
14:25 EU's Barnier cannot say when Brexit deal could be reached
While FX traders seem to agree there's an optimistic mood floating around, it's still quite
tough to make a guess, even an educated one, on when or if a deal can be struck.
There's one thing however that is only very rarely put into question and that's the fact
that the UK - deal or no deal - will exit the EU at the end of March 2019.
planned in 2019?
Just put the question to an economist who jokingly answered: "maybe they know something we
HERD TRADING ITALY? THINK AGAIN, LOOK AT INTESA'S NUMBERS! (1346 GMT)
Let's take a brief break from the day's big focus - the implications for policy and markets
of the U.S. midterm elections - and take a look at what's going in Italy.
second day after posting solid results. Beyond the obvious impact for the bank itself, there's a
general takeaway for the whole Italian market, which has been indiscriminately sold off on the
back of worries over its populist government's budget plans.
This takeaway is that selling everything Italian is not a great idea after all.
"High-quality numbers argue against herd trading in Italy," says Alberto Cordara, an analyst
at Bank of America Merrill Lynch who rates the stock with a buy rating.
Meanwhile still in Italy, there has been some other good news on the IPO front: demand for
Garofalo Health Care shares was three times the offer in its IPO.
The company is small - 267 million euro of market cap - but its debut on Nov. 9 may be one
to watch to test investors' appetite towards battered Italy.
REALITY CHECK: A POST-MIDTERM RALLY IS NO ROTATION (1116 GMT)
With European benchmarks rising well above one percent and faster than Wall Street futures
this morning, one might be tempted to think that cheap European stock markets are finally
getting sexier than their U.S. peers.
After all, with the effects of the U.S. tax cuts slowly fading out, the divergence between
U.S. stock markets and the rest of the world could very well lose its raison d'être.
Fat chance of that, according to ING analysts.
"The growth stories outside of the U.S. aren't looking particularly robust right now so it
is hard to see a dramatic rotation into overseas asset markets on the back of these results,"
they wrote this morning.
They also note that "a bi-partisanship on some pro-growth strategies such as infrastructure"
is still on the cards.
Today's bounce may have legs though.
Sylvain Goyon, head of equity strategy at the Oddo brokerage in Paris, says many investors
had been on the sidelines before the election due to what he called "an uncertainty premium".
"Now (the election) is behind us, there's a good reason for them to get back to the market."
(Julien Ponthus and Josephine Mason)
MIDTERMS: FROM SUGAR RUSH TO SUGAR CRASH? (0930 GMT)
lifted U.S. stock since Trump took over is set to slowly fade into a sugar crash, whose fancy
name is reactive hypoglycemia.
For those not yet fully up to speed with this condition, "it is described as a sense of
tiredness, lethargy, irritation, or hangover, although the effects can be lessened if a lot of
physical activity is undertaken in the first few hours after food consumption," according to
It's quite funny actually how the medical metaphor actually applies in this case with so
many analysts already wondering how to stimulate the U.S. economy further after the likely loss
of a second round of tax cuts.
There's already talk about how the Fed could possibly slow down the pace of monetary
tightening and BNY Mellon notes that "there is some risk that tariffs and restrictions will pose
an adverse cost shock to the US economy".
"With a better balance of power, even with a little bit of continued malaise in equity
markets, a stable infrastructure plan can be a good way of invigorating the domestic economy,"
BNY Mellon economists write, arguing the U.S. could take a leaf out of the China's book on that
Of course with European markets up above 1 percent in early deals and Wall Street futures in
the black, there isn't much of a case for doom and gloom, but it could have been a different
story this morning.
"Had the Republicans retained control of both the House and Senate then we would have
expected a big bounce in US equities, Treasury yields, and the dollar", due to prospects for
further fiscal stimulus, ING economists noted.
Below, lots of sugar:
WHAT YOU NEED TO KNOW BEFORE EUROPE OPENS (0747 GMT)
European shares were set to open today higher after U.S. midterm elections delivered a split
Congress, which historically has been positive for stocks, while some good-looking earning
updates could also help lift the mood.
Futures on main European benchmarks were trading up 0.6 percent, setting the pan-regional
STOXX 600 on course to recover the losses suffered in the past two days.
Drugmakers and builders with US exposure are the watchlist as investors ponder what could be
the impact on drug prices and infrastructure spending on the new power slip in Washington.
German sportswear firm hiked its 2018 profit guidance, citing a strong financial performance in
the first nine months of the year, although it trimmed revenue target due to
weaker-than-expected growth in western Europe.
topping expectations and ABN Amro hinted at a dividend hike after its quarterly profit beat
makers reported a 27 percent drop in third-quarter operating profit missing analyst expectations
amid currency headwinds and higher research and development expenses.
frame deals in China; Norway wealth fund should not add new equity markets to index amid review;
outlook on fuel price, summer disruption; M&S sales declines show pain of latest reinvention
EUROPEAN FUTURES RISE SLIGHTLY, SAME FOR WALL STREET (0714 GMT)
European futures have started the day in positive territory with the outcome of the midterm
election in the United States broadly in line with market expectations.
U.S. futures are also in the black as it seems that the prospect of political gridlock in
Washington, which arguably creates some uncertainty, is not enough to put investors off.
HEADLINES ROUNDUP: HEAVY FLOW OF EARNINGS (0657 GMT)
Let's not forget that this is another earnings-heavy day with updates from heavyweights
including Adidas, Credit Agricole and BMW - just to name a few,
Here's your headlines round-up:
Adidas hikes 2018 profit guidance, trims sales outlook
Credit Agricole Q3 profits rise, buoyed by retail and investment banks
ABN Amro beats expectations with 8 pct rise in Q3 profit
Munich Re returns to profit in Q3, affirms 2018 guidance
BMW Q3 hit by upfront expenditure for electric car development
Water utility Veolia sees best third quarter earnings growth since 2014
Barry Callebaut FY net profit jumps on strong growth, keeps outlook
Ahold Delhaize Q3 sales, profit beat market forecast
BHP expects derailed train to have some impact on its Australian iron ore exports
Dassault pulls out of race to supply Canada with jets - sources
EUROPE SEEN HIGHER AFTER DEMOCRATS WIN U.S. HOUSE CONTROL (0630 GMT)
European shares are seen opening higher today after Democrats took control of the U.S. House
in midterm elections, removing uncertainty over possible surprise outcomes.
The broadly expected results mean Democrats will resume House control in January for the
first time since the 2010 election, beginning a split-power arrangement with the Republican-led
Senate that may force Trump to scale back his legislative ambitions.
Meanwhile, Wall Street stock futures and Asian shares held earlier gains, while the dollar
Frankfurt's DAX to open 85 points higher at 11,569 and Paris' CAC to open 39 points higher at