LIVE MARKETS-More luxury M&A after LVMH/Tiffany?

* European shares cruise higher * STOXX 600 climbs back to April 2015 highs, up 0.3% * Trump says U.S. China trade deal near * Wall St at record levels on trade hopes, economic data Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters and anchored today by Joice Alves. Reach her on Messenger to share your thoughts on market moves: rm://joice.alves.thomsonreuters.com@reuters.net MORE LUXURY M&A AFTER LVMH/TIFFANY? (1552 GMT) LVMH has quietly hit a new record high as investors celebrate the world's largest luxury goods company's latest acquisition: that of U.S. jeweller Tiffany for $16.2 billion. The takeover of Tiffany is surely a big deal - the biggest ever for the acquisitive French giant - but the feeling among traders and executives is that luxury M&A has more room to go. "Indeed there could be some consolidation within the sector," says Stephane Ekolo, equity strategist at Tradition in London. Maybe after LVMH it's time for another big name like Richemont or probably Kering to take the initiative, as Michele Norsa, former CEO of Ferragamo, suggested in a TV interview with Bloomberg today. shorturl.at/bemIZ Separately, market chatter is keeping tabs on names ranging from turnaround story Burberry to Italy's Ferragamo, Tod's and Moncler, according to a M&A arbitrage trader. (Danilo Masoni) ***** MANUFACTURING TO DRIVE GROWTH IN 2020 (1146 GMT) European manufacturing is likely to drive the global economy rebound going into next year and the rationale behind that is: people keep buying and soon companies will have to start restocking. Growth will likely be led by a positive inventory cycle for manufacturers after a prolonged period of slow activity while demand hasn't slowed that much, says John Stopford, head of multi asset income at Investec Asset Management, which will soon be rebranded Ninety One. "If demand holds up, you've got an inventory draw down which has to be restocked," he says in an interview. And the bounce back won't come from the U.S. as usual, he adds. "This time around, the central growth is more likely to be Europe in particular, and to some extent Asia." Here is some more for 2020: - In the optimistic case, focus on some more cyclical equities - More non U.S. equities over the rest of the world - Opportunities surrounding decarbonisation, especially electric cars (Joice Alves) ***** IT'S NOT JUST CORBYN: WATER NATIONALISATION RISK IN ITALY? (1041 GMT) Labour leader Corbyn has promised to nationalise rail, mail, water, and broadband but the temptation to bring assets back into state hand is not confined to Britain. Take Italy for example, where the ruling Five Star Movement has for long been canvassing to bring water distribution back under state control. According to a report today in Il Sole 24 Ore, Five Star leader Di Maio is trying to get legislation on the matter approved in January. But how real is that risk? While water nationalisation would help unite Di Maio's fractious movement, it would likely meet stiff resistance from its coalition Democratic Party partner, the paper said. Also the cost of such move looks prohibitive: 15 billion euros. "It seems difficult that the nationalization of the water sector (Daga law) can be approved in this phase...", says Equita analyst Stefano Gamberini. Anyhow, for future reference, here's the water exposure of Italian utilities, according to Equita. Acea (45% Ebitda) Hera (25% Ebitda) Iren (22% Ebitda) A2A (5% Ebitda) (Danilo Masoni and Stephen Jewkes) ***** "WE SEE UPSIDE..." (0925 GMT) Markets are buoyant this morning and it all boils down to Trump keeping the mood music on trade positive. And rather upbeat broker notes on what lies ahead next year are also playing a role in keeping investors hopeful. There's one this morning from Barclays strategists - fresh out of the press. "We see upside for European equities in 2020," they say. But then add: "investor nerves will continue to be tested amid lingering geopolitical tail-risks and late-cycle fears." "Still, we believe the improving growth policy trade-off, light positioning and relative expensiveness of 'safe assets' will provide the preconditions for an extension of the equity bull market into the delayed end of cycle." So, what's their target for the STOXX 600 in 2020? 430 points - which would be a lifetime high for the pan-European index and is above the median estimate of 420 (which also is a record) from a Reuters poll just published. Have a look here: POLL-Trade and Brexit deals could push European stocks to record highs (Danilo Masoni) ***** OPENING SNAPSHOT: FLYING HIGH (0902 GMT) European shares hit a four-year high at the opening after Trump said the U.S. and China are close to a deal, which could end a prolonged trade war between the two countries. The pan-European STOXX 600 index reached its highest since April 2015, led by trade-sensitive miners, up 0.75%. Among top movers, Virgin Money and Aroundtown are both up more than 3% after better-than-expected results. British soft drink company Britvic shares lead STOXX losers, down 3.1% after it posted a 31% drop in its annual profit after tax, as the company grappled with a new law in France and wrote down the value of some assets in the country. Future shares are down almost 10% after share placement. Here is a snapshot of European bourses: (Joice Alves) ***** EUROPEAN BOURSES SEEN HIGHER ON TRADE HOPES (0756 GMT) Stock futures point to a slightly higher open for European bourses on hopes that China and the U.S. are nearing a trade deal. The pan European index STOXX 600 had three positive sessions since Friday on reports that negotiations between Washington and Beijing are progressing with Trump saying that the two countries are close to inking a deal. On the corporate front, this week is calm after the storm with very few earnings updates compared to the super busy past few weeks. Despite a slowdown in the U.S. vaping market, British American Tobacco raised its full-year revenue forecast today. Not so well for pub operator Marston's, which cut its annual profit today, hurt by lower food sales, rising costs and sluggish consumer spending. Here are some other corporate headlines: HSBC private banking sees double-digit asset, revenue growth on Asia boost Epiroc appoints Helena Hedblom new CEO GUESS WHAT? IT'S ALL ABOUT CHINA-US TRADE TALKS(0635 GMT) European bourses are expected to extend gains as the U.S. and China trade talks seem to progress after Donald Trump said yesterday that negotiators were close to inking an initial deal. Asian shares rose on hopes that the two countries will seal a deal ending months of trade war. The positive mood also pushed Wall Street indexes to fresh record closing highs yesterday, and expectations the Federal Reserve will keep rates low underpinned sentiment. Financial spreadbetters at IG expect London's FTSE to open 12 points higher at 7,415, Frankfurt's DAX to open 30 points higher at 13,266 and Paris' CAC to open 14 points higher at 5,944. (Joice Alves) ***** (Reporting by Danilo Masoni, Joice Alves, Julien Ponthus and Thyagaraju Adinarayan)