LIVE MARKETS-The difference between bitcoin and gold
* Euro STOXX up 0.6 pct
* JP Morgan earnings boost stocks
* EuroSTOXX 50 volatility gauge falls back
* Bank, tech and oil stocks drive gains
Oct (Shenzhen: 000069.SZ - news) 12 - Welcome to the home for real-time coverage of European equity markets brought to
you by Reuters stocks reporters and anchored today by Helen Reid. Reach her on Messenger to
share your thoughts on market moves: helen.reid.thomsonreuters.com@reuters.net
THE DIFFERENCE BETWEEN BITCOIN AND GOLD (1303 GMT)
The case for using cryptocurrencies and bitcoin in particular as a safe haven during market
crashes or to hedge an equity portfolio has been eroded during the last few days. The king of
crypto lost about 5 percent during the storm while gold rose nearly three percent.
Talking about yesterday's market rout, Deutsche Bank (IOB: 0H7D.IL - news) 's Jim Reid noted that "Gold had its
best day since Brexit, gaining +2.42% as investors sought safe-havens".
You can clearly see below how gold came to the rescue while the S&P 500 and bitcoin sank:
Needless to say, critics of the cryptocurrency indulged in a few bursts of sarcasm on social
media:
(Julien Ponthus)
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WHICH DO YOU WANT FIRST: THE GOOD OR THE BAD NEWS? (1205 GMT)
Morgan Stanley (Xetra: 885836 - news) 's equity strategists Andrew Sheets and team offer their takeaways from the
past few days - and manage to find a bright side amid the gloom.
First (Other OTC: FSTC - news) , the bad news: "The 'rolling bear market' has finally reached the markets' most
popular position: growth."
The good news? Tactical indicators are looking more positive, MS says, and many markets have
already de-rated - suggesting there's not much room for more.
Sheets et al also highlight another positive for investors in Europe:
Many believed that value and Europe would both underperform in a down market due to their
high "beta", or correlation to the market, but the recent market moves - where value
outperformed even in a sharp selloff - fly in the face of that belief.
"We disagree, and take recent price action as a silver lining," write Sheets and team.
The number of 3-sigma - or 3 standard deviation - moves in global stock indices is on course
to be its highest since the crisis this year, they calculate, adding "liquidity remains poor."
So one thing's certain, bigger moves are here to stay.
(Helen Reid)
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TEMPTED BY FRENCH PRIVATISATIONS? BE "FLEXIBLE AND PATIENT" (1126 GMT)
Law firm Davis Polk has issued a colourful memo for clients tempted to get a piece of the
action in the upcoming privatisations planned by France's Macron government.
As a reminder, French lawmakers are currently reviewing a bill to allow several large sales
of state assets, including airport operator ADP, energy group Engie (LSE: 0LD0.L - news) and the
national lottery FDJ, in order to finance a 10 billion euro innovation fund.
Investors who lack visibility in France should prepare carefully given "the extreme
sensitivity of the assets concerned" and might consider involving French players to soothe
concerns, Davis Polk says.
"Be patient and flexible" is one of the tips given, which include words of caution such as
"the privatisation processes can be relatively long and can be punctuated by unforeseen events".
The formalism of the process, which will mostly be done in French, can be "destabilising"
and investors are warned that "an aggressive tax structure, even if legal, is likely not to be
viewed favourably".
Here's a link to the memo: https://bit.ly/2yevyKB and here is a recent blog post: French
privatisations: How's Safran (LSE: 0IU8.L - news) as a taster?
Bonus, meet the locals:
(Julien Ponthus)
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MORE THAN HALF THE MSCI WORLD IS IN A BEAR MARKET (1041 GMT)
BAML strategists have the scores on the doors in their flow show piece - and it doesn't look
good.
* 1557 global stocks out of 2767 - or 56% of the MSCI ACWI - are in a bear market (>20%
decline)
* U.S. Treasuries are on course for 3rd largest annual loss in 40 years
* 16 of 21 commodity markets are in correction (>10% price decline)
BAML's indicator of breadth of the market, which measures the percentage of global stocks
trading below their 200-day moving average and 50-day moving average, triggered a "buy" signal
as the ratio hit 89% (see below).
But the strategists don't think it's time to buy back into stocks yet, saying "we remain
fundamentally bearish on peak policy & peak profits... we respect technicals and seasonality but
will sell the rally".
(Helen Reid)
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A HALF-HEARTED BOUNCE REVEALS LINGERING JITTERS (1032 GMT)
Today's bounce looked strong at first but investors seemed to curb their enthusiasm pretty
swiftly, leaving indexes at about half their opening gains. The Euro STOXX is up 0.3
percent while the DAX is up 0.5 percent and the FTSE 100 0.7 percent.
There's clearly still some anxiety in the air, and investors are also likely sitting on
their hands ahead of results from the big U.S. banks in a couple of hours.
(Helen Reid)
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WHAT'S ON OUR RADAR: A BOUNCEBACK TO END A TURBULENT WEEK (0648 GMT)
A rebound in Asian shares (which excluded China) was set to spread to Europe on Friday with
futures extending gains up 0.7 to 1.3 percent across the main euro zone and UK benchmarks. If
the bounce is sustained the euro zone STOXX could make up some of this week’s heavy losses which
have left it on track for its worst week since the February selloff.
Positive comments from the IMF could help cement Europe’s bounceback: the head of the IMF’s
European unit said the direct impact of potential U.S. car tariffs on Europe would be relatively
limited, though they could still affect investor sentiment.
Investors’ eyes will be on U.S. banks today kicking off the Q3 earnings season, a crucial
test for both U.S. and European markets which have shown how flimsy they can be in recent days.
Europe’s big brewers ABInBev and Carlsberg (LSE: 0AI3.L - news) could be moved by a source-based Reuters report
that India’s antitrust watchdog raided their offices in at least two Indian cities as part of an
investigation of price-fixing allegations.
In the UK results from more asset managers are likely to move shares after Jupiter and
Hargreaves Lansdown (Frankfurt: DMB.F - news) disappointed on Thursday. Both Man Group’s and Ashmore’s funds under
management rose thanks to market gains and net inflows.
In other company news or stock movers:
Atalaya Mining (LSE: ATYM.L - news) to explore strategic options
Sports Direct buys Glasgow department store Frasers for 95 mln stg
Man Group Q3 assets up 0.4 pct on inflows
Inflows buoy Ashmore Q1 assets, up 3 pct to $76.4 bln
(Helen Reid)
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EUROPEAN FUTURES UP STRONGLY (0622 GMT)
Futures have opened up strongly across European benchmarks, with the Eurostoxx 50 futures up
0.9 percent, DAX futures up 0.8 percent and FTSE 100 futures up 0.5 percent.
(Helen Reid)
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EARLY MORNING HEADLINES ROUND-UP (0554 GMT)
All eyes will be on Wall Street's banks kicking off the reporting season later on today, but
here are the potentially stock-moving headlines so far.
In interesting consequences of the stock selloff, sources say Tencent Music is delaying its
$2 billion U.S. IPO. News the Gulf of Mexico's oil output has been cut by 40 percent due to
Hurricane Michael is helping support oil prices rebounding after two days of heavy losses.
Lockheed, Rheinmetall (IOB: 0NI1.IL - news) to make joint bid to supply German navy helicopters
EXCLUSIVE-Top brewers raided by Indian watchdog in price-fixing probe -sources
Italy's Carige to look at naming investment bank for tie-ups
Italy could have around 15 pct of new Alitalia (Stuttgart: 2278962.SG - news) , Italy railways on board
Virgin's Branson halts talks on $1 bln Saudi investment in space ventures
EXCLUSIVE-Shell (LSE: RDSB.L - news) seeks to sell Venezuela JV stake to France's Maurel & Prom -sources
U.S. Gulf of Mexico oil output cut by 40 percent on Hurricane Michael -BSEE
Tencent Music delays $2 bln U.S. IPO due to weak markets - sources
India to raise import tariffs on electronic and communication items
Vonovia Buys Stake in Residential Portfolio From SNCF As Part Of Consortium
Brexit negotiators eye Monday breakthrough, N.Irish party ups the ante
(Helen Reid)
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MORNING CALL: RESPITE FOR EUROPEAN STOCKS? (0526 GMT)
European stocks look set for a bounce today after a stronger session in Asia overnight. Wall
Street extended its slide into a sixth session before that, though, and the Nasdaq (Frankfurt: 813516 - news) flirted with
correction territory, down as much as 10.3 percent from its Aug 29 closing record high.
Asian shares found a slightly firmer footing to set course for their first gains in two
weeks, but the rout continued in Shanghai where shares hit lows last seen in 2014.
The euro zone's STOXX is currently set for its worst week since February, but that may
change if the bounce proves material.
Spreadbetters expect London's FTSE to open 27 points higher at 7,034, Frankfurt's DAX to
open 110 points higher at 11,649 and Paris' CAC to open 53 points higher at 5,160.
(Helen Reid)
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(Reporting by Helen Reid, Danilo Masoni, Julien Ponthus)