LIVE MARKETS-Can the bull market power onwards?

* European stocks rise

* Eyes on Wednesday's U.S.-China trade talks

* Trump criticizes Fed raising rates in interview

* Wall Street opens higher

LONDON, Aug 21 (Reuters) - Welcome to the home for real-time coverage of European equity

markets brought to you by Reuters stocks reporters and anchored today by Kit Rees. Reach her on

Messenger to share your thoughts on market moves: kit.rees.thomsonreuters.com@reuters.net

CAN THE BULL MARKET POWER ONWARDS? (1345 GMT)

As the afternoon goes on, European equities are trading at session highs and U.S. stocks

have opened with gains; all seems well. But, more broadly, can this bull market carry on?

"Should investors worry that this new record brings us closer to the peak of the current

cycle? Not necessarily. Bull markets do not die of old age; they die of fright," Tom Stevenson,

investment director for Personal Investing at Fidelity International, says.

Stevenson points to valuations not being excessively high and the boost earnings have

received from tax cuts as suggesting that U.S. stocks could continue with their ascent.

"The euphoria which typically marks the end of a bull market is notably absent this time."

(Kit Rees)

*****

UK STOCKS: CHEAP VALUATIONS BUT UNSATISFYING EARNINGS (1249 GMT)

The UK's second-quarter earnings season has been "a bit mixed," according to Caroline

Simmons, deputy head of the UK chief investment office at UBS Wealth Management.

Only about half of companies are beating earnings expectations, and the average earnings

surprise is about 2 percent, while the average sales surprise is about 5 percent. This mismatch

suggests pressure on company margins, which, Simmons says, tallies with company managers'

comments flagging higher costs partly due to inflation.

Overall, consensus forecasts are for about 8 percent profit growth over the next 12 months,

bringing the UK to a P/E of 13.3x.

But "despite the UK's increasingly attractive valuation, the outlook for earnings growth

isn't as strong as for other regions," Simmons says, adding that she remains neutral on UK

stocks.

To the big issues of the day - trade tariffs and Turkey's crisis - she says UK stocks have

only limited exposure. So it's more the domestic backdrop that is giving investors cause for

concern.

(Helen Reid)

*****

WHO NEEDS A WORLD CUP BOOST? (1124 GMT)

Well, apparently not British supermarkets, which arguably did just fine during the four

weeks to August 12, a period clear of the soccer fever which was very palpable in Britain,

Jefferies analysts note, looking at the latest Kantar data.

"This is the second best reading of 2018, after the 3.1 percent (sales growth) seen in P7

(the previous four weeks), but it is in our view more impressive given that it wasn't World Cup

boosted," they say, adding that "overall industry growth seems healthy, especially in food".

Shares (Berlin: DI6.BE - news) in Sainsbury (Amsterdam: SJ6.AS - news) 's and Morrisons, which Jefferies believe have enjoyed

"healthier levels of growth", are up 0.6 percent and 1.4 percent while Tesco (Frankfurt: 852647 - news) , which was a bit

less fortunate, is down 0.3 percent.

Overall though, British supermarkets are easily outperforming the FTSE 100 since Sainsbury

and Asda announced their combination and broke the old British food retail merger taboo back in

April.

(Julien Ponthus)

*****

A TORRID SUMMER FOR TECH-HEAVY HEDGE FUNDS (1014 GMT)

It's been a difficult few months - to say the least - for hedge funds whose average

year-to-date return is now -1 percent.

"Large performance swings in the broad market and the most popular stocks have created a

difficult investing environment," say Goldman Sachs (NYSE: GS-PB - news) analysts.

Unsurprisingly given some sharp falls including Facebook (NasdaqGS: FB - news) 's which wiped out as much as $150

billion in market cap, the basket of most popular hedge fund positions has lagged the S&P 500.

This has driven investors away: hedge funds suffered their worst outflows in Q2 since Q4

2016, with $1.2 billion lost, according to Preqin.

Hedge funds began rotating from tech into healthcare in 2017, but the sharp drop in Facebook (Swiss: FB-USD.SW - news)

shares after results accelerated this shift. A record 28% of funds owned the stock at the start

of Q3.

Information Technology is still the largest net sector weight for hedge funds, at 25

percent, but the Healthcare (Shanghai: 603313.SS - news) overweight is now the largest in the past five years, GS says.

"The combination of recent Info Tech volatility, M&A activity, and the easing of policy

concerns has lifted Health Care stocks in recent months, rewarding hedge fund overweights," they

note.

(Helen Reid)

*****

THE BIG GLOBAL DIVIDEND BONANZA (0911 GMT)

The dividends paid by the planet's 1,200 biggest market capitalisations jumped 12.9 percent

in the second quarter to reach 500 billion dollars (497.4 to be more precise), according to

Janus Henderson's Global Dividend Index.

The underlying growth of 9.5 percent was the fastest in 3 years, and 12 countries saw record

payouts.

"Mining dividends grew fastest but technology, energy and consumer cyclicals also saw

double-digit increases," the asset manager's report said, adding that "consumer basics and

utilities lagged behind".

With (Other OTC: WWTH - news) total dividends expected to reach $1.358 trillion (yep, trillion) in 2018, corporate

payouts are seen rising 8.6 percent in headline terms.

To put that into perspective, even if it's a bit like comparing apples and oranges, only 14

countries out of 190 had a GDP higher than that in 2017, according to the IMF.

(Julien Ponthus)

*****

OPENING SNAPSHOT: EUROPEAN STOCKS MUTED AS TRADE TALKS LOOM (0715 GMT)

European stocks are struggling for direction in early trading, with investors cautious ahead

of trade talks between the U.S. and China. The STOXX 600 is flat while Germany's DAX is up 0.2

percent.

A stronger euro isn't helping euro zone markets either, as the dollar falls after Trump's

comments against the Fed's rate rises.

A few notable stock movers in relatively calm trading overall:

BHP Billiton (NYSE: BBL - news) is bottom of the FTSE 100 after the global miner warned of cost

pressures at some of its operations and flagged a delay in future savings.

Wood Group is leading the STOXX 600 with a 3.6 percent gain after its first-half

results came in at the higher end of its forecast and it raised its cost-savings target for

merger synergies by $40 million.

Oil services peer Saipem (LSE: 0NWY.L - news) is another top gainer, top of the FTSE MIB after it won

contracts from ExxonMobil in Guyana.

Despite news the Italian government is working on penalties to apply to Atlantia (LSE: 0I2R.L - news) after the

deadly Genoa bridge collapse, shares in the motorway operator are up 3.3 percent.

(Helen Reid)

*****

ON THE RADAR AHEAD OF THE OPEN (0644 GMT)

European shares are set for a weaker open as investors eye tomorrow's U.S.-China trade

talks, with stocks futures trading 0.1-0.4 percent lower.

Likewise comments in a Reuters interview from U.S. President Donald Trump criticizing the

Fed raising rates haven't done much to boost market sentiment. Trump also accused China and

Europe of manipulating their respective currencies.

Earnings are thin on the ground but we've had full-year numbers from mining heavyweight BHP

Billiton, whose shares are seen slightly lower as underlying profit came in just below

expectations, while UK housebuilder Persimmon (Frankfurt: 882058 - news) saw a rise in first-half profit.

Atlantia shares are expected to come under further pressure after Italy's PM said the

government is working on penalties against the company over the Genoa bridge collapse.

Here are this morning's key company headlines in Europe:

BHP profit, dividend jump but warns on costs, savings

UK builder Persimmon's first-half profit rises, sees more growth

ECB fines Credit Agricole (Swiss: ACA.SW - news) and subsidiaries

Italy working on penalties against Atlantia over bridge disaster

Sky (Frankfurt: 893517 - news) expects to pay advisers on Fox deal up to $123.7 million in fees

UK's Wood Plc eyes faster merger synergies after first half results

(Kit Rees)

*****

EUROPEAN STOCKS FUTURES DIP (0615 GMT)

It's a weak open for European stocks futures which are retreating slightly, as trepidation

ahead of the U.S.-China trade talks sets in.

Here's your futures snapshot:

(Kit Rees)

*****

MORNING CALL: EUROPEAN STOCKS SEEN OPENING LOWER (0535 GMT)

Good morning. European stocks are seen opening slightly lower, according to financial

spreadbetters, with trading likely to be cautious ahead of trade talks between the U.S. and

China due to start on Wednesday.

"The trade war story has been weighing on stocks ... so any signs that the risk is

moderating on a serious scale will boost investors’ appetite for riskier assets and push equity

indices higher," analysts at London Capital Group said in a note.

The FTSE was expected to open 0.2 to 0.3 percent lower, Germany's DAX was seen retreating

0.1 percent and France's CAC was expected to dip 0.1 to 0.2 percent, according to spreadbetters.

Overnight, China stocks gained while Wall Street enjoyed a stronger close, though U.S.

stocks pared gains following comments by President Donald Trump criticizing the Fed raising

rates. In the interview with Reuters, Trump also accused China and Europe of manipulating their

respective currencies.

(Kit Rees)

(Reporting by Helen Reid, Kit Rees and Julien Ponthus)