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LIVE MARKETS-Netherlands: Time to join the equity party?

* European stocks hit fresh record high

* FTSE gets a boost from weaker pound

* Poland's CD Projekt shares slump 12%

* Wall Street opens slightly higher

* 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:


The Amsterdam Exchanges Index hit its highest today in almost 19 years.

Stock prices in the index, which is home to some of the world's largest companies such as Royal Dutch Shell, Unilever and Heineken, have ballooned gaining 29.1% in two years.

See below:

The Dutch economy sweetly transitioned from a disinflation boom to inflation. House prices are rising and wages are growing at circa 4%. Real interest rates are minus 3%, possibly the lowest in the world. So is it good time to jump in and buy those stocks? Jefferies' equity strategy analysts have mixed feelings: "The equity market has certainly benefited from the ‘risk-free rate rally’ as earnings revisions have been lacklustre. Hence, the PE has inflated as real interest rates have plunged," according to Jefferies' team.

"That said, our valuation, risk and momentum indicators for the market are flashing overbought. Hence, there may be a better time to enter the market."

(Joice Alves)



Stock markets have had an eventful week with Beijing and Washington signing the 'phase one' trade deal and U.S. banks out with Q4 fireworks. The amplitude of the market moves has been limited even if in record-high territory.

The pan-European STOXX 600 looks set to close 1.3% higher for the week, while the S&P 500 at 1.7%.

U.S. banks had a blow-out fourth quarter, triggering a knee-jerk rally in the sector, driven by their trading revenues. European banks ticked bit higher, but nothing remarkable.

Why? UniCredit equity strategist Christian Stocker says the "results are mainly based on a solid rebound in trading revenues, which are volatile and, therefore, not long-lasting."

Okay that's with the results, what's wrong with a trade deal, why not a massive 2%-3% rally?

"Investors realize that the signing of the phase-one trade deal between the US and China does not solve the underlying issues affecting the economy, with most of the existing tariffs on Chinese goods likely to remain in place until after the US presidential election in November," Stocker adds

It looks like markets will be stuck in a range until the recovery in global economy is confirmed by a solid bounce back in PMI numbers.

Here's a look at how euro zone markets have rallied ignoring the manufacturing data:

(Thyagaraju Adinarayan)



Close to nobody, it emerges from a survey among Deutsche Bank's clients.

Asked to pick 3 among a list of all the biggest threats to markets and the economy, a banking crisis scored a meagre 1%. What difference a decade makes hey?

Instead, geo-politics, trade wars or Sanders or Warren winning the U.S. presidential race are the top three dangers singled out.

Not that DB's clients seem to worried about this political outcome with a whopping 89% believing Trump's reelection is likely.

Quite interestingly, an asset price bubble is fourth, another sign of growing melt-up fears.

Here's the survey:

(Julien Ponthus)



While the spotlight is on the STOXX 600 new record of 424.54 points, let's not forget to cast a wary eye towards Paris and Frankfurt where big milestones seem ripe for the picking.

At 6,109 points, its session high so far, the CAC 40 was 0.95% from its ante financial crisis high hit on June 1, 2007. The French blue chip's life high of 6944.77 points was reached on September 4 2000 in the height of the dot-com bubble era.

On the other side of the Rhine, Germany's export-heavy DAX rose to a high of 13557.78 this morning, a meagre 0.3% from its record high of January 2018 is 13596.89 points.

(Julien Ponthus)



With Alphabet hitting the trillion-dollar mark, its worth noting that Wall Street's top five listed companies -- Apple, Microsoft, Alphabet, Amazon and Facebook -- are actually worth more than Europe's top 50 stocks.

The 'fantastic five', as they are called by Vincent Deluard at INTL FCStone, have a combined market cap of about 5.3 trillion dollars, so roughly 4.7 trillion euros.

The STOXX Europe 50 is worth only 4.1 trillion euros...

And now, lets compare indexes. The U.S. S&P 500 has a $29 trillion price tag, almost three times the $11.32 trillion on the pan-European STOXX 600. Yes, having a hundred more companies doesn't help. Europe's highest-value company is Nestle, worth 290 billion Swiss francs -- just $314 billion.

Anyhow, enough of these comparisons for now. Instead, here are 6 points copy-pasted from Deluard's recent research note on the 'fantastic five'.

* Owning the largest stock of the index used to be a dumb strategy, but AAPL and MSFT almost doubled in 2019

* The “fantastic five” stocks contributed 25% of the market's gain last year thanks to multiple expansion

* 70% of high-fee active US equity mutual funds have no significant exposure to the fantastic five stocks

* The rotation towards passive funds creates structural demand for the largest stocks: this will not stop in 2020

* We still favor unloved assets (EM stocks, value sectors) because of cheap valuations and our inflation outlook, but we are concerned about melt-up risk for the fantastic five.

* The implied volatility of calls on the fantastic five is historically low and hedging costs usually fall after earnings season. (Julien Ponthus and Thyagaraju Adinarayan) ****


The FTSE just got a shot in the arm as weak UK retail data hit sterling on the head with investors rushing in to price an interest rate cut from the BOE.

It seems like another good old pound down, FTSE-up move but there's a catch: the Export-heavy FTSE 100 is rising 0.6% and, this time, the FTSE 250 midcap index is also rising, a perhaps sign that investors believe a rate cut benefit UK PLC as a whole.

Here's the story:

UK consumers cut back on spending again, adding to economic gloom

(Julien Ponthus and Thyagaraju Adinarayan)



Taking the lead from Wall Street and Asia, STOXX 600 has hit a new record high at the open and is now cruising slightly above 423 points.

There won't be any celebration among French retailers however. Casino was the top loser among European shares at the open, losing 10% after slashing its forecast due to the impact of transport strikes in the fourth quarter.

France's Fnac Darty took an even bigger hit, down 13% after it estimated losses in fourth quarter revenues at 70 million euros due to the social protests.

On Paris' CAC 40 blue chip index, supermarket operator Carrefour is also one of the biggest losers, down 1.4%.

Another company under the spotlight is CD Projekt which slumped 12% after delaying the premiere of its flagship Cyberpunk 2077 game.

Hard to say how the shares in Poland's largest video game maker will end the session with seemingly a lot of investors waiting to buy the dip.

"If CD Projekt gets hit hard on the open we’d be advocating to those who have ‘missed it’ to buy", Neil Campling head of TMT Research at Mirabaud wrote this morning.

Most indexes and sectors are well in the black however in what seems to be building up as a very positive end of the week.

Among the biggest winners are shares in Swedish Orphan Biovitrum, up 6.7% after topping its 2019 sales and core profit expectations.

Here are the top movers on the STOXX 600:

(Julien Ponthus)



While the earnings season has yet to begin in earnest, there are a few headlines that can probably give a taster of what’s coming.

Protest in France against Macron’s plan to reform pensions is starting to bite.

French retailer Casino slashed its forecast on Thursday for 2019 French operating profit growth due to the impact of transport strikes in Q4. Another retailer Fnac Darty said it estimated losses in fourth quarter revenues at 70 million euros due to social protests.

Both stocks are expected to open lower.

Another big loser could be Hasting which said it expects a steep drop in annual earnings and plans to lower its 2019 dividend, citing a challenging market environment.

Richemont said unrest in Hong Kong is denting sales but the luxury group is expected to rise at the open on an otherwise decent batch of results.

Bayer is also seen making some gains after mediator Ken Feinberg told Bloomberg he was "cautiously optimistic" a deal could be reached to settle more than 75,000 cancer claims related to its Roundup herbicide.

Ladbrokes-owner GVC is expected to rise after it said annual core earnings will be at the top end of its guidance, driven by stronger demand for its online games.

(Julien Ponthus)



It would only take one point to bring the STOXX 600 to a new record.

So given that Wall Street and Asia closed their session overnight on fresh new highs, it's quite likely that a new milestone is in store this morning for European equities.

On that note, financial spreadbetters at IG expect London's FTSE to open 13 points higher, Frankfurt's DAX to rise 58 points and Paris' CAC to gain 15 points.

While there's a recurrent trend of underperformance by European bourses, China's economic growth matching expectations should brighten things up a tad and lift sentiment.

(Julien Ponthus)


(Reporting by Danilo Masoni, Joice Alves, Julien Ponthus and Thyagaraju Adinarayan)