Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters. You can share your thoughts Joice Alves (email@example.com) and Julien Ponthus (firstname.lastname@example.org) in London and Stefano Rebaudo (email@example.com) in Milan.
RISK OF FRESH SELLOFF? (1055 GMT)
Stock prices have been sliding for a few days as investors worry about a possible second wave of coronavirus infections. Some analysts are suggesting you better be super cautious, as what markets are pricing in at the moment is still being debated.
Investors are taking the view that the easing of lockdowns will continue in the coming weeks but they aren't ruling out a second wave of infections and potential new restrictive measures being reimposed intermittently in 2020, according to UBS' Daily Europe.
Since financial markets are not off the hook yet, the Swiss bank shared a list of investment tips:
- Go for credit, which is supported by the Fed's action and looks cheaper than equity, considering U.S. stocks are trading at 18.5x p/e on 2021 estimates
- Be selective, diversify and protect against the downside in equities, because new selloffs cannot be ruled out
- Take advantage of higher volatility with options as put-writing strategies can provide additional yield.
OPENING SNAPSHOT: RISK-OFF AND VIRTUAL ROADSHOW (0759 GMT)
European bourses are well in the red as fears COVID-19 is here to stay intensify after WHO emergencies expert suggested the virus may become endemic. The pan-European index is falling around 1% with auto sector and travel and leisure leading losses again today.
In terms of single stocks, shares in TeamViewer fell sharply in early trade after private equity firm Permira offered to sell around 25 million shares of the company.
Meantime, Britain's blue chips are down 1.4% with British Airways' owner ICAG falling almost 4% to the bottom of the index in a risk-off session. While Hargreaves Lansdown shares jumped 8% after its Q1 trading update showed the British fund supermarket's assets under administration was better than market expectations.
Today is also the day when Europe completes its first ever IPO after an all-virtual roadshow. Shares of Norway's Pexip Holding soared 54% as the video conferencing firm made its stock market debut.
ON OUR RADAR: TEAMVIEWER, WIRECARD AND AUTO MAKERS (0655 GMT)
European bourses are seen opening in the red as sentiment is pretty grim across global markets on worries of a second wave of infections.
But, let's start with positive results: Wirecard Q1 was up 26% thanks to boost from consumer business.
Yet, a new day and a new batch of scrapped dividends: Clariant is scrapping a regular dividend as it hunkers down to survive the COVID-19 crisis, but it sticks to extra $1 bln payout from asset-sale proceeds.
Fiat Chrysler and Peugeot also said last evening it would not pay ordinary dividend for 2019 this year.
Shares in TeamViewer seen collapsing after private equity firm Permira offered to sell around 25 million shares of the company.
Pressure on Lloyd's of London, which said underwriting and investment losses for the global non-life insurance sector could reach a record $203 billion.
Meanwhile, Sanofi said last evening that it is working with European regulators to speed up access to a potential coronavirus vaccine in Europe.
STOXX 600: A MONTH-LONG BUMPY ROAD TO NOWHERE (0609 GMT)
Exactly a month ago, on Tuesday April 14th, the STOXX 600 ended the day up 0.6% at 333.89 points.
One month later, as we wait for the open, the pan-European index is at 333.93 points.
It sure has been a bumpy road in between but this road has led investors to nowhere.
Which actually isn't a bad thing considering the unprecedented economic damage the pandemic already has and will inescapably inflict on the European economy.
As you can see on the chart below, there's been three clear phases in the coronavirus crash.
First the collapse: the STOXX 600 fell over 33% from its February 19th highs to hit a bottom of 284 points at the close on March 16.
The index then went into 17% bear rally which ended on April 14.
While there's a solid belief that markets bottomed out about two months ago, there's also a growing sense that investors may have somewhat jumped the gun on the V shaped recovery trade.
Anyhow, here's how the last 3 months panned out:
MORNING CALL: NOT MUCH TO LOOK FORWARD TO (0534 GMT)
Sentiment is pretty grim across world markets as the fear that the pandemic is here to stay grows a bit bigger every day.
Let this sink in: "This virus may become just another endemic virus in our communities, and this virus may never go away," WHO emergencies expert Mike Ryan told an online briefing yesterday.
Add that to Powell's warning that the U.S. economy faces an "extended period" of weak economic growth and the overall picture ain't that pretty.
Talking about the central banker who just brushed off the idea of negative rates, let that quote from Wednesday's briefing sink in too: "There is a sense, growing sense I think, that the recovery may come more slowly than we would like".
No wonder then that Wall Street and Asia ended in the red and that European futures are trading in negative territory, roughly between -0.5% and -1%, this morning.
There just isn't much at the moment to look forward to.
Shorter term, there's a deluge of Q1 report that might help shape the trend of morning trading, for the better or for the worse.
(Reporting by Joice Alves, Julien Ponthus, Stefano Rebaudo and Thyagaraju Adinarayan)