LIVE MARKETS-Closing snapshot: hold on tight

* European shares rise slightly * Focus on Federal Reserve policy decision * UBS downgrades luxury sector to neutral * Logistics stocks fall after FedEx warning * Wall Street ticks lower Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters and anchored today by Thyagaraju Adinarayan. Reach him on Messenger to share your thoughts on market moves: rm://thyagaraju.adinarayan.thomsonreuters.com@reuters.net CLOSING SNAPSHOT: HOLD ON TIGHT (1622 GMT) European stocks managed to eke out small gains on Wednesday as investors readied for the Federal Reserve to cut rates by 25 basis points, but with the U.S. economy chugging along at a pretty decent rate the accompanying update might not be as dovish as many have hoped for. "Some dealers are expecting the Fed to lay the ground work for a series of rate (cuts), but keep in mind the jobs market is robust, plus wages are impressive, so a very dovish update is not a done deal," says David Madden, market analyst at CMC Markets UK. The pan European STOXX 600 ended the day up 0.2%. (Josephine Mason) ***** SPAIN: GETTING HARDER TO RECOVER (1609 GMT) Spanish assets showed muted reaction to Madrid politicians failing to form a government. But with the country heading towards its fourth election in four years, it may be harder for its top stock index to keep up with its regional peers even as the euro zone's fourth largest economy remains in relatively good shape. The key reason to be downbeat about the IBEX, which is up only 5.8% so far this year against a more than 16% gain for the pan European STOXX 600 index, is that the new vote due on Nov. 10 is unlikely to magically resolve the political stalemate. "The election result is likely to depend on voter turnover amid widespread political disenchantment. It is unlikely to lead to a strong, stable government able or willing to undertake major structural reforms," says Roberto Ruiz, chief investment officer for Spain at UBS. "Protracted political uncertainty is likely to impede spread tightening for the Spanish sovereign and prevent the IBEX from reversing its recent underperformance versus Eurozone equities overall," he adds. Natixis economist Jesus Castillo also sees more clouds ahead for Spain. "It will be the second year in a row that the previous budget is extended. Yet, the country needs to introduce new reforms. In addition, Spain is going to face a possible no-deal Brexit with an interim government," he says. "Finally, the deterioration in the global environment with international risks rising (trades war, China and U.S. slowdown, oil outages) is going to become more challenging and they will request effective political answers," he says. (Danilo Masoni) ***** WILL EUROPE GO DUTCH? (1420 GMT) With the ECB running out of ammunition, stock investors are increasingly looking at what governments could do to prop up the economy and bring Europe Inc out of an earnings recession. The debate took a new twist after the Dutch government announced plans for more spending in 2020 after two decades of fiscal rigidity, raising the question of whether Europe or Germany could follow its example. "What's more striking is that the Netherlands is one of the most fiscally conservative members of the Eurozone. So this could well put more pressure on Germany. Certainly one to watch," said Deutsche Bank strategist Jim Reid. Many however appear to think that any big fiscal boost out of Europe is unlikely for now. Among them is Brooks Macdonald. "We remain sceptical that coordinated fiscal stimulus will come from Europe until the economic situation deteriorates further however the shift towards increased government spending has also increased prospects for growth," said Edward Park, deputy CIO at the UK investment manager. That scepticism would explain why despite its value bias, European stocks have not outperformed Wall Street during this month's sudden revival of value stocks. And Rabobank strategists rightly point out that the Netherlands "are just a drop in the ocean" and then they add: "the need for fiscal stimulus is actually the biggest in those countries that tend to have the least fiscal space. As such, European coordination may prove essential if this is to become a real success story". For more on fiscal stimulus check out our previous posts: Fiscal stimulus in Germany: how likely, how big? "Large-scale fiscal expansion in euro area looks unlikely" Euro zone eyes biggest fiscal easing in a decade Fiscal fizz in Germany? (Danilo Masoni) ***** VALUE PLAY OR VALUE TRAP? (1138 GMT) That's been the trillion dollar question in the last few weeks among investors, strategists, sell-side and buy-side as we saw glimpses of some sharp rotation in value/growth play. State Street multi-asset strategists, who visited the Reuters London office today, say they've faced similar questions from their clients. "Last couple of weeks everybody has been asking if the great rotation is here, back to value, value stocks doing very well," Marija Veitmane, senior multi-asset strategist at State Street says. In stark contrast to sell-side research from Bank of America Merrill Lynch and JPMorgan, Veitmane says in a world of low interest rates, low growth there is hardly any scope for the rotation to sustain for a longer period. And, that's already evident with the rotation in Europe taking a back seat in the last couple of sessions ahead of Fed as jittery investors position themselves in defensive sectors. Veitmane's colleague Benjamin Jones says the move was mostly due to bond yields rising a bit and he thinks the rotation won't last long unless, bund yields are back into positive territory and Treasuries move to 4% or 5%. So when we asked them who's been buying into this? They believe its a bit of short covering in value and a bit of profit taking in growth amid small signs of retracement in bond yields. Other highlights from the State Street meeting: * U.S. equities by far their favourite equity markets, marginally positive on China * Overweight on large UK equities purely on a view that Sterling weakness will help * Prospect of a no-deal Brexit underappreciated (Thyagaraju Adinarayan and Josephine Mason) ***** WHY VALUE IS WORTH IT (0909 GMT) Debate over whether rotation into neglected and inexpensive value stocks continues and while long-term investors appear to be reluctant to join the trade, another big bank - Barclays - has joined the club of those saying the move has further to run. "Taking a stance against Value has worked well for a while, but we think the recent reversal could have legs, irrespective of market conditions. Crowded positioning and stretched valuations make Growth vulnerable to either a broadening of the macro slowdown, or a revival of the reflation trade," Barclays says. Strategists at the UK bank led by Emmanuel Cau see a double benefit from being exposed to Value and see it as a win-win trade. 1) Value might be less vulnerable to bad news than Growth: "The common wisdom is that the space will work as a recessionary hedge, but we disagree. On the contrary, our view is that crowded positioning, extreme valuations and earnings cyclicality make Growth stocks more vulnerable to a downturn than Value" 2) Value also offers a cheap hedge against a revival of the reflation trade: The latest Value bounce is no more than a mere reversal of the August risk-off, but if the recovery trade were to gather speed, it could feed further style rotation". (Danilo Masoni) ***** OPENING SNAPSHOT: FEDEX RIVALS SLIDE; INVESTORS AWAIT FED (0730 GMT) Another subdued session in Europe with no major sectoral moves as investors await Fed interest rate decision before making any major bets on risky assets. Luxury is the only sector that's making some noise today after Swiss bank UBS downgraded the sector to "neutral" from "overweight", saying the sector is in overbought territory. Moncler (-3.3%) CEO's cautious comments citing Hong Kong unrest is adding to weakness. As expected logistics firms Deutsche Post, DSV, Kuehne & Nagel, Royal Mail and PostNL are all sliding between 0.5% to 1% on FedEx's profit warnings overnight. Apple component suppliers AMS, STMicro and Infineon rise on strong pre-orders for the latest iteration of iPhone. In single stock moves, EDF is seeing a bit of a relief rally (+2%) after the French utility company says there is no need to close any of its nuclear reactors over welding problems, which roiled the stock last week. Here's a snapshot on sectoral moves: (Thyagaraju Adinarayan) ***** ON OUR RADAR: FEDEX RIVALS, APPLE SUPPLIERS, LUXURY (0656 GMT) Stock futures point to a flat to slightly weaker open for Europe as investors head for the sidelines ahead of the Fed's interest rate decision later today. In corporate news, FedEx's profit warning overnight citing trade war is likely to cast shadow on European logistics companies. The U.S. package delivery firm's shares tumbled 10% in extended trading. DHL owner and European rival Deutsche Post is sliding 3.2% in early Frankfurt trade. DSV, Kuehne & Nagel, Royal Mail , PostNL and other European mail delivery firms are also expected to come under pressure on FedEx warning. Apple component suppliers could rally following their Asian peers on strong pre-orders for the latest iteration of iPhone, traders say. AMS , STMicro, Infineon and Dialog Semi are some names to watch out for. Luxury stocks, mainly Swatch and Richemont are expected to slide after a bearish note by UBS, according to traders. Moncler is seen sliding 2% after CEO says he is cautious on FY sales due to Hong Kong unrest. Italian toll road operator Atlantia in focus yet again after its CEO resigned as the company moves to deal with the fallout from a deadly bridge collapse last year. In the UK, Cobham shares are seen opening 3%-5% lower as the UK CMA's intervention in Advent’s merger proposal raises worries of possible rejection. Traders call B&Q owner Kingfisher shares -2% after weak sales and cautious outlook. Other key headlines: MEDIA-Lloyds-Schroders wealth management venture to launch price war - FT Diageo averts strike with unions over pay at Scottish distilleries Roche bid to recycle Gayzva for lupus nephritis wins FDA breakthrough tag Atlantia CEO resigns in Benetton-led shake up UK's BAE Systems wins $318 mln contract from U.S. Army Britain orders security investigation into Cobham-Advent deal Kingfisher profit falls 6.4% on weak French performance Pendragon Flags Brexit Uncertainty (Thyagaraju Adinarayan) ***** CALM BEFORE FED (0540 GMT) European stocks are seen opening slightly lower as jittery investors brace for Fed meeting later today, where the U.S. central bank is widely expected to cut rates by 25 bps. Volatile oil prices, ongoing U.S.-China trade war and upcoming Fed rate decision have darkened investor mood this week with stocks in defensive sectors such as utilities, food & beverage and telecom in demand. "Today's Fed decision is once again likely to be a contentious one, given the two dissents we saw to the last cut in rates, which saw the US central bank cut by 25bp at its July meeting," Michael Hewson at CMC Markets UK says. Financial spreadbetters IG expect London's FTSE to open 12 points lower at 7,309, Frankfurt's DAX to open 2 points lower at 12,370, and Paris' CAC to open 4 points lower at 5,611. (Thyagaraju Adinarayan) ***** (Reporting by Danilo Masoni, Josephine Mason and Thyagaraju Adinarayan)