LIVE MARKETS-Earnings recession, are you sure there won't be one?

* European shares trade higher

* Michelin (Paris: FR0000121261 - news) outlook boosts autos

* Kering (LSE: 0IIH.L - news) reverse course to rise after results

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: rm://josephine.mason.thomsonreuters.com@reuters.net

EARNINGS RECESSION, ARE YOU SURE THERE WON'T BE ONE? (1107 GMT)

Bernstein strategist Inigo Fraser-Jenkins and team are not so sure and their earnings

indicator is now pointing to a 0.1 percent earnings drop over the next 12 months for Europe due

to a sharp increase in policy uncertainty.

That surely provides food for thought, especially it you consider that even excluding the

effect of policy uncertainty, Bernstein gets to a 3.8 percent growth forecast, which is still

well below the consensus of 7.4 percent for 2019.

In the snapshot you can see all the variables Bernstein used to construct its earnings

indicator but for more on the indices to measure policy uncertainty, check out: http://www.policyuncertainty.com

(Danilo Masoni)

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U.S.-CHINA TRADE TALKS: WHERE TO FROM HERE? (1032 GMT)

As U.S. trade representative Robert Lighthizer arrives in Beijing for high-level trade talks

between the world's two largest economies, Citi reckons the market is already partly pricing in

a deal, even though it could be more complicated than that.

"Markets seem to be positioned for a U.S.-China trade deal, but trade war risks remain,"

Citi strategists write.

Citi expects additional trade and investment restrictions, especially on emerging

technologies and sectors related to the "Made (Paris: FR0010328302 - news) in China 2025" plan even if a preliminary trade

deal is achieved.

Their base case (with a 55% probability) is a "veneer" of a deal with chances of a deadline

roll-over, though a tariffs limbo remains.

They think the deal could include the following commitments by China:

* Reduce the goods trade deficit by $100-$200 billion by end 2020

* Grant (by mid-2020) higher market access for U.S. exports and services

* Structural changes like enforcing stricter intellectual property protection

* Increase transparency on currency practices

Their bear case (with a 40% probability) is that the U.S. increases pressure on the Chinese

economy and increases the tariffs on Chinese imports from 10 to 25% on March 2. Citi sees global

equities falling 10 to 15 percent in the short term.

The bull case has only a 5% probability: a comprehensive deal, a rollback of tariffs and a

softening of the U.S. stance on China. This would boost global equities up around 10 percent by

end-2019

Below you can see their full scenarios and impact on different asset classes:

(Helen Reid)

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OPENING SNAPSHOT: TRADE & TYRES (0846 GMT)

European shares are up for a second day after taking a beating last week, helped by hopes

around the resumption of trade talks between China and Washington and a strong update from

Michelin, which is rallying 10 percent to the top of the STOXX 600 after the

tyre maker pledged a profit gain this year.

Its gains are spreading to the whole autos sector, while shares in other companies

that supply the automotive industry, such as chipmakers, are also doing well.

Well-received results also from German wholesaler Metro (Dusseldorf: 62M.DU - news) and staffing company

Randstad boosted their shares, while a small beat from luxury giant Kering (Swiss: KER.SW - news)

failed to impress investors.

Also lifting sentiment is the possible aversion of a second government shutdown after U.S.

lawmakers reached a tentative deal on border security funding.

Here's your opening snapshot:

(Danilo Masoni)

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WHAT WE'RE WATCHING BEFORE THE OPEN (0755 GMT)

European shares are expected to open higher, boosted by optimism about the U.S.-China trade

negotiations and relief after U.S. lawmakers reached a tentative deal on border security funding

to avert another government shutdown. Futures on main euro-zone benchmarks are trading up more

than 0.5 percent, with trade-sensitive DAX up as much as 0.8 percent.

Earnings will also help drive direction, with strong numbers from Gucci owner Kering,

Michelin and Randstad, while Thyssenkrupp (IOB: 0O1C.IL - news) delivered a mixed report.

The German steel-to-elevator maker stood by its 2018/19 targets but warned the global

economic environment is darkening after reporting a big drop in Q1 results. Its shares are up

1.5 percent in early Frankfurt trade.

Randstad, the world's second-largest staffing company, posted a 1 percent rise in

fourth-quarter underlying earnings, slightly ahead of analysts' estimates, amid slowing European

markets. German online classifieds company Scout24 (IOB: 0RB8.IL - news) stood by its 2019 guidance. Its shares were

indicating higher.

Gucci owner Kering reported a 24.2 percent rise in comparable sales in the fourth quarter,

slightly above forecasts even against a cooling economic backdrop in China. Echoing upbeat

comments from rival LVMH about China's appetite for luxury goods last week, the company said it

did not observe any sales slowdown among its Chinese clientele in Q4.

Elsewhere in retail, Germany’s Metro shares are up 2.8 percent after its results, while

embattled department store Debenhams (Frankfurt: D2T.F - news) is expected to get a boost after securing a 40 million

pound in funding.

Some good news for the autos suppliers which, like luxury goods companies, has been rattled

by worries over China demand - Michelin pledged to deliver a further rise in operating profit

this year despite challenging conditions in its main tyre markets as it posted

better-than-expected results for 2018. Its shares were seen up 2-3 percent.

But Renault will be in focus after Nissan slashed its FY outlook.

In banking, Vontobel posted a 14-percent rise in adjusted full-year net profit, as Swiss

private bank and asset manager took in 5 billion Swiss francs ($4.98 billion) in fresh client

money. Its shares were indicated to open down 2 percent.

Hot on the heels of its profit warning last week, TUI (LSE: 0NLA.L - news) said underlying losses had widened in

its first quarter, inline with company expectations.

In dealmaking, pressure is mounting for logistics firm Panalpina, with Artisan Partners,

which owns 12 percent of the company, calling on the board to reassess DSV (LSE: 0JN9.L - news) 's takeover offer.

Other headlines of interest:

Online trading platform Plus500 (Stuttgart: P55.SG - news) expects 2019 results to be below expectations;

Indivior Says Court Denied Its Motion To Prevent Sale Of Suboxone Copycats;

Norway's Kvaerner to pay first dividend since 2015;

'Hold your nerve on Brexit,' Theresa May to tell British lawmakers;

Debenhams Announces Additional 40 Mln Stg Credit Agreement;

Bayer (IOB: 0P6S.IL - news) 's Monsanto (Hamburg: 1132157.HM - news) wins arbitration ruling over royalties from Indian seed company;

European insurer ERGO to sell non-life business in Russia;

Norway's sport retailer XXL (LSE: 0R3P.L - news) scraps dividend for 2018 amid poor results;

Renault (LSE: 0NQF.L - news) 's Senard to meet Nissan CEO Saikawa in Japan this week - Nissan

(Josephine Mason)

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EARNINGS A PLENTY (0658 GMT)

We've got plenty of earnings to digest this morning: Gucci-owner Kering, TUI, Thyssenkrupp (Amsterdam: TH6.AS - news)

and Bank Vontobel to name a few.

Just days after its FY profit warning, TUI has reported a widening loss in its first quarter

to end-December, inline with the company's expectations, and said it expects bookings broadly

inline with the previous year.

Thyssenkrupp saw a drop in Q1 adjusted EBIT and warned that the global economic environment

is darkening, but the number was higher than the Refinitiv estimate and the German industrial

giant stood by its 2018/19 targets.

In banking, Vontobel posted a 14-percent rise in adjusted full-year net profit, as Swiss

private bank and asset manager took in 5 billion Swiss francs ($4.98 billion) in fresh client

money.

Delivering an increase in 2018 revenue and operating income, Kering CFO has just said the

company did not observe any sales slowdown among Chinese clientele in Q4. That echoes comments

from LVMH last week.

Elsewhere in retail, Norwegian sport retailer XXL has scrapped its dividend, citing

disappointing results in the fourth quarter of 2018. That follows a major profit warning in

December.

Some good news from the autos sector which, like luxury goods companies, has been rattled by

worries over China demand - Michelin pledged to deliver a further rise in operating profit this

year despite challenging conditions in its main tyre markets as it posted better-than-expected

results for 2018.

British Airways owner, IAG has said it would cap ownership of its shares by non-Europeans at

the current 47.5 percent level to maintain its status as a European-owned airline. That will

ease concerns about possible disruption after Brexit.

In seed and drug news, Bayer's Monsanto unit has won proceedings against Indian seed maker

Nuziveedu Seeds Ltd (NSL (SES: N02.SI - news) ) in a royalty dispute, lawyers familiar with the matter said.

(Josephine Mason)

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EUROPE SEEN STRONGER (0623 GMT)

European shares are expected to open higher this morning

There's no new news on the trade talks, mind, and there might not be for days (if at all) -

discussions among deputy-level officials started on Monday before minister-level meetings later

in the week. At the end of January, talks ended with some progress, but mostly U.S. declarations

that much more work was needed.

Underscoring the risks facing the world's No. 2 economy as it navigates the trade spat

though, China's commerce ministry warned that consumption growth is likely to slow further this

year as the economy cools.

Financial spreadbetters IG (Frankfurt: A0EARV - news) expect London's FTSE to open 17 points higher at 7,146,

Frankfurt's DAX to open 63 points higher at 11,078 and Paris' CAC to open 31 points higher at

5,045.

(Josephine Mason)

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