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LIVE MARKETS-Herd trading Italy? Think again, look at Intesa's numbers!

* European open higher

* In setback for Trump, Democrats seize U.S. House control

* Earnings in focus: Adidas (IOB: 0OLD.IL - news) , banks Credit Agricole (Swiss: ACA.SW - news) , ABN

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: danilo.masoni.thomsonreuters.com@reuters.net

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.

Well, shares in top retail bank Intesa Sanpaolo (Amsterdam: IO6.AS - news) are outperforming the market for a

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.

(Danilo Masoni)

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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)

With (Other OTC: WWTH - news) the Democrats now in control of the House, the tax-cut induced sugar rush which has

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

Wikipedia.

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

front.

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:

(Julien Ponthus)

*****

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.

Elsewhere the focus is on earnings updates. Adidas shares are expected to get a lift as the

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.

In the battered and cheaply valued banking sector, Credit Agricole reported rising profits,

topping expectations and ABN Amro hinted at a dividend hike after its quarterly profit beat

expectations. Eyes also on BMW (EUREX: BMWE.EX - news) , its shares falling 2.6 percent in pre-market, after the car

makers reported a 27 percent drop in third-quarter operating profit missing analyst expectations

amid currency headwinds and higher research and development expenses.

Stock movers: AXA (Paris: FR0000120628 - news) buys $9.4 billion U.S. real estate debt business from Quadrant; Hermes

says China sales sound, third-quarter revenues rise; Telecom network maker Nokia (Milan: 23568.MI - news) wins $2.3 bln

frame deals in China; Norway wealth fund should not add new equity markets to index amid review;

JD Wetherspoon warns of lacklustre trading, announces wage hike; Wizz Air (Frankfurt: WI2.F - news) downgrades profit

outlook on fuel price, summer disruption; M&S sales declines show pain of latest reinvention

(Danilo Masoni)

*****

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.


(Julien Ponthus)

*****

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

Voestalpine (IOB: 0MKX.IL - news) 's H1 profit drops 19 pct on lower demand from car industry

Snam (Amsterdam: QE6.AS - news) hikes earnings, dividend targets in new plan

Water utility Veolia sees best third quarter earnings growth since 2014

Barry Callebaut FY net profit jumps on strong growth, keeps outlook

Axel Springer (Swiss: SPR.SW - news) hikes EPS forecast as digital properties gain traction

Ahold Delhaize Q3 sales, profit beat market forecast

SGS (LSE: 0QMI.L - news) pares 2020 target as commodity markets sour

MEDIA-Comcast (Swiss: CMCSA.SW - news) sets its sights on European pay-TV market - FT

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

Brazil's TIM Participacoes (Sao Paolo: R2:TIMP3S.SA - news) handily beats profit estimates on one-off item

Italy's Enel (LSE: 0NRE.L - news) plays down talk of move for Colombia's Electricaribe

(Danilo Masoni)

*****

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

dipped.


Financial spreadbetters IG (Frankfurt: A0EARV - news) expect London's FTSE to open 33 points higher at 7,074,

Frankfurt's DAX to open 85 points higher at 11,569 and Paris' CAC to open 39 points higher at

5,114.

(Danilo Masoni)

*****