* STOXX 600 up 0.3 pct
* Hopes of U.S.-China truce lift stocks further
* Spain's IBEX lags after parliament votes down govt budget
Feb 13 - Welcome to the home for real-time coverage of European equity markets brought to
you by Reuters stocks reporters and anchored today by Julien Ponthus. Reach him on Messenger to
share your thoughts on market moves: firstname.lastname@example.org
A LOVE LETTER TO RISKIER ASSETS (1219 GMT)
strategy, Alain Bokobza, and team are in the mood for love of riskier assets ... specifically
It's too early to be extremely bearish but also too late to be extremely bullish, so for the
time being, the team says it's best to keep a tactical positive bias for equities.
That's because of the paradigm shift with the Fed indicating it wouldn't raise interest
rates as quickly as expected. They're bearish the dollar for the same reason.
"As the dust settles, we are building the case for adding more protection for portfolios,
notably through gold but also China equities," they write.
The reason for giving Chinese equities some love? Equity valuations are extremely low, with
the market P/E back to October 2014 levels and expectations are for the trade war tensions to at
least not turn totally ugly, they say.
But will Beijing and Washington feel the romance as talks to hammer out a truce to end the
protracted trade spat continue tomorrow?
SANTANDER COCO POPS: "AN EARTHQUAKE OF THE SCALE OF 1" (1140 GMT)
definitely grabbing a lot of attention. (Our story here:)
Here are a few quotes from our conversation with Jerome Legras, head of research at Axiom
Alternative Investments who doesn't think it's such a big deal.
* "When you look at the bond price, for a shock wave, it's a very, very small shock, it's an
earthquake of 1 on the Richter scale"
* "A shock wave is when everyone expects something and the opposite turns out, when there's
a sudden realization that things are not the way one thought and there's a feeling of betrayal,
it's really not the case here".
* "I think that some people may be in need of sensationalistic news, it's really not a shock
wave, just a few days ago, most people we talked about it were saying there was 50/50 percent
chance they would call."
* "Some people may have been taken by surprise but then again, a lot of people were
* "There is a risk of extension, we're well paid to take it".
Anyhow, Santander share price is flat, another sign that this is not a big issue for the
BIG OIL: A CASH FLOW STORY (1044 GMT)
Oil stocks haven't grabbed many headlines recently but the sector is up a handsome 9.5
percent so far in 2019 and even though it may face more headwinds from falling crude oil prices,
solid balance sheets are a reason not to worry too much.
Their strength boils down to strong cash flows, a gift of their past restructuring efforts.
"Sector cash flow is back to levels last seen in 2014, when crude prices were above $100/b,"
say HSBC analysts Gordon Gray and Kim Fustier, highlighting how Q4 results from oil majors that
have already reported were solid.
Q1 however is set to be a tougher test, but HSBC remain confident, even if they expect a $9
drop in Brent prices from the previous quarter.
comfortably above our expectations for FY19 capex plus dividends. This illustrates the sector’s
robustness, with its FCF breakeven of $53/b in 2019e," they say.
At a $70 Brent price forecast, HSBC sees excess cash flow for US and European oil majors at
around $40 billion per year through 2020-2022.
AT THE OPEN: EUROPE IN JUBILANT MOOD (0838 GMT)
The European market's in jubilant mood again today, with Frankfurt once more leading the
gains as investors cling to hopes of progress in the U.S.-China talks this week.
Individual moves are being driven by earnings: ABN Amro was the standout loser, dropping 7.5
percent and set for its worst day since June 2016 after Q4 profits missed expectations.
billion. Its shares were down 1.5 percent.
Here's your snapshot:
WHAT WE'RE WATCHING AT THE OPEN: EARNINGS (DUH!) (0750 GMT)
Risk-on spirit this morning as trade war optimism lifts world markets and a fresh burst of
European earnings are – so far – not spoiling the show.
Better than that, overnight data from Refinitiv shows that earnings growth expectations are
no longer falling even if the big picture show a big fall since November (see post below).
A lot of earnings from the low countries with notably, ABM AMRO posting profits below
demand in Asia.
adverse market conditions in Q4 to undermine its 2020 profit targets.
Outside earnings a few significant corporate developments such as Airbus nearing a decision
to embrace constructive talks with Eliott Management and Thyssenkupp bowing to Cevian and
simplifying its structure.
In the UK, another sign that Brexit angst is starting to bite, real estate agent Countrywide
profits halved and British homewares retailer Dunelm became the latest company to start
stockpiling some of its best-selling products to beat potential supply disruptions.
Here's a list of top headlies:
Banco Santander opts to roll-over CoCo bond
Orpea FY Revenue Up At 3.42 Billion Euros
Temenos FY Non-IFRS Revenue Up 14 Pct
Heineken sees 2019 profit growth at similar pace to last year
Airbus to give update on A380 shutdown plans -sources
Clariant hits Q4 headwinds in plastics business
Akzo Nobel's fourth-quarter earnings top estimates
ABN Amro Q4 net profit dives 42 pct as loan impairments surge
Aurubis Q1 earnings fall almost half on plant shutdowns
Asset manager Amundi confirms profit target although adverse markets hit Q4
German minister backs tougher rules on telecoms suppliers
Banks seek government support to help firms at risk from no-deal Brexit
Pernod CEO pursues change and engages activist shareholder
MEDIA-Deutsche Bank Seeks to rebuild in Mideast
(Julien Ponthus and Josephine Mason)
FUTURES ARE UP (0715 GMT)
European futures are trading comfortably in the black as it seems that the content of the
earnings galore this morning isn't going to spoil the risk-on spirit lifting global markets due
to trade optimism.
U.S. futures are also rising by the way.
SPEAK OF THE EARNINGS...(0703 GMT)
Speak of the earnings and they shall appear. It's earnings galore this morning, so much so
that the list of companies reporting today couldn't fit on a single screenshot without
de-zooming from the Reuters Morning News Call !
Just to name a few of the blue chips reporting this morning (a lot of Dutch companies it has
to be said), we've got Heineken, Koninklijke Vopak NV, Clariant
, Amundi or Akzo Nobel.
EARNINGS: Q4 EXPECTATIONS NO LONGER FALLING (0640 GMT)
Good news! Q4 earnings forecast for STOXX 600 companies are no longer in free fall and have
actually edged up to 3 percent year-on-year , I/B/E/S Refinitiv data shows.
Data showed last week a 2.3 percent earnings growth expectation, which constituted a sharp
fall from earlier forecasts.
You can see the evolution of Q4 earnings growth expectations here:
EUROPEAN BOURSES READY TO GO WITH THE (GOOD) FLOW (0620 GMT)
European bourses seem ready to go with the (good) flow and follow their Asian and U.S. peers
higher as optimism that Washington and Beijing might be able to hammer out a trade deal lifts
Frankfurt's DAX up 53 points and Paris' CAC to rise 15 points.