LIVE MARKETS-Stocks prices suggests virus crisis ends in December

* STOXX slightly up

* Crude oil prices jump

* Big Q1 earnings day

* Spie, AMS, Teleperformance jump Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters. You can share your thoughts with Thyagaraju Adinarayan (thyagaraju.adinarayan@thomsonreuters.com), Joice Alves (joice.alves@thomsonreuters.com) and Julien Ponthus (julien.ponthus@thomsonreuters.com) in London and Stefano Rebaudo (stefano.rebaudo@thomsonreuters.com) in Milan.

STOCKS PRICES SUGGESTS VIRUS CRISIS ENDS IN DECEMBER (1156 GMT)

According to UBS Europe Daily, current stocks prices suggest investors expect the world to get out of the coronavirus crisis by the end of the year.

The investment bank outlines two scenarios and says equities are now pricing something in between. The central scenario sees restrictions to be "reimposed intermittently" up to the end of the year.

In the other upside one, "a combination of digital tracking, possible drug treatments, and the absence of a significant second wave in virus cases, means that lockdowns are lifted by the end of June and do not need to be reimposed."

Current asset prices show that the pessimistic scenario of a second wave isn't being considered because it did not happen (yet?) in Asia, where the outbreak started.

But UBS remains cautious and "favors selective equity strategies that will gain from the upside while limiting the downside in the event of a relapse in the COVID-19 pandemic."

(Stefano Rebaudo)

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ROTATE IF YOU DARE (1025 GMT)

Is this bear rally about to switch to another phase?

There's certainly been quite some talk over the last few days about how it might be time to rotate out of the big tech stocks which have helped stock markets rebound from the depth of the coronavirus crash.

"The real story on Tuesday which continues to play out today was market rotation: Nasdaq underperformed, and there was a move out of growth into value", writes Stephen Innes, a strategist at AxiCorp.

Deutsche Bank analysts had the same take: "The reversion seems mostly to have been driven by a rotation out of large-cap Tech names like Facebook and Amazon ahead of earnings announcements in favour of more ‘value’ oriented stocks".

AS mentioned in the blog post below, Barclays this morning warned about a possible "value bounce" or a "risk-on" style rotation.

Commenting yesterday's session on Wall Street, Tim Ghriskey, chief investment strategist at Inverness Counsel in New York said "the sense that (U.S.) states are opening up and the economy is beginning to grow again is causing this rotation".

Right. But it's also probable many investors will think twice given how the tech bet, both in the U.S. and Europe has saved much of their portfolio performance during the market crash.

The Nasdaq is just barely negative so far in 2020 (-0.7% down on the year) and Tech in Europe is by far the best performer behind pharmaceutical with a ytd loss of below 10%.

Looking at the chart below, rotating a tech heavy portfolio towards value currently feels like a bet for the brave:

(Julien Ponthus)

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THE UNLOVED 25% RALLY IN EUROPE (0828 GMT)

The 25% equity rally since its recent lows was quite impressive and quick too, but not so solid, as investors' mood is still sour pointing to more pain trade coming. Barclays paints this picture with a set of flow numbers showing risk aversion, particularly for European stocks.

Fund flows confirm the risk-off mood as U.S., Japan and UK had inflows, month to date, while Europe and emerging markets did not.

Investors participation was light and "equity volumes dried after up after the surge seen in March." Mutual funds added to cash at an unprecedented level.

Up to now also systematic investors, risk-parity funds and high frequency traders "did not raise their exposure", even if they could in the future if volatility keeps falling.

No bids came from corporates as buybacks stalled.

But since stocks are propped up by safety trades, the investment bank expects a "a 'risk-on' style rotation rather than another leg down" in the near-term.

(Stefano Rebaudo)

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OPENING SNAPSHOT: CURB YOUR Q1 ENTHUSIAM (0755 GMT)

Serioulsy who would have thought?

Many companies reporting Q1 results this morning have seen their share price skyrocket in early trading, which surely illustrates how much bad news had already been priced in and how traders are psychologically open to being pleasantly surprised.

Sensor specialist AMS, France's Teleperformance and Spie are on top of the STOXX 600 with rises close or above 2 digits.

The banking sector, one of the big loser of the crisis, is one of the session's main winner with the sector up 1%.

Barclays and Standard Chartered are up close to 5% after updating the market on their incoming virus triggered loan losses. Both banks saw their profits fall but Deutsche Banks, which swang to a loss, was also up, albeit less so, by 3%.

Another winner in the sector was Nordea Bank, up 3%, which reported a 4% increase in first-quarter net profit well above market expectations.

A good surprise was also Volkswagen announcing that it expected to be profitable in 2020. The car maker is up 1% and the rest of the sector is also well in the black.

Other blue chips published tough trading updates but didn't get hammered for it.

Airbus, which saw profits halve in Q1, saw its shares initially rise before gently retreating to -0.8%.

Anyhow, while there are definitely pockets of enthusiasm across the market, it's fair to say that overall, it's curbed.

A good reminder of the recession to come is airline group IAG falling 5% after launching a plan to shrink its main British Airways business by axing staff numbers by a quarter.

The STOXX 600 is flat and European stock markets overall seem ready, as expected, to take a breather after two days of strong gains.

(Julien Ponthus)

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ON THE RADAR: VOLKSWAGEN, DAIMLER, AIRLINERS (0640 GMT)

Futures on European bourses are hovering just above the floating line as the market is set to pause for breather after a two-day rally.

On the corporate front, expectations for the third quarter results continue to deteriorate, according to Refinitiv data, but there's some good news coming from German carmakers despite the coronavirus crisis.

Volkswagen expects to be profitable on a full-year basis even after the plunge in first-quarter earnings. Daimler sees the operating profit of its Mercedes-Benz Cars & Vans division to be above the prior-year level.

Shares in AMS are up 5.4% in premarket trade after the company said expectations on coronavirus impact on Q2 are limited.

Provisions against bad loans continue to affect bank results.

Barclays says 2020 target of above 9% Rote remains difficult, after posting a falling Q1 profit. Deutsche Bank swung to a loss in the first quarter. Standard Chartered PLC first-quarter profit tumbled 12%. Bankia first quarter net profit fell 54%. Nordea Bank reported a 16% fall in its first-quarter operating profit.

Airliners are in trouble.

Aerospace company Airbus called the coronavirus crisis the "gravest the aerospace industry has ever known", after posting a 49% slump in first-quarter adjusted operating profit.

British Airways-owner IAG reported a big loss and warned it may cut up to 12,000 jobs in sweeping restructuring measures aimed at weathering the crisis.

Lufthansa's Austrian unit AUA has applied for state aid of 767 million euro. The parent company is mulling over seeking some form of credit protection from creditors, while it is talking to the government about a 9 billion euros rescue package.

Spanish airport operator Aena said that traffic in its domestic network plummeted more than 95% in April, following a 59.3% fall in March.

Traffic down also on motorways. Atlantia cut its expected revenue by around 3 billion euros.

Covestro quarterly profit fell by 89%, hurt by weak demand in China.

Norsk Hydro reported a jump in first-quarter operating profit, but cautioned that the COVID-19 outbreak is hitting global demand for the metal.

Not all the food industry is strong. Carrefour saw revenue growth accelerating in the first quarter, reflecting strong food sales in March. Remy Cointreau warned it expected sales to fall by around 50-55% in the first quarter.

(Stefano Rebaudo)

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MORNING CALL: SENTIMENT STILL POSITIVE ON LOCKDOWN EASING (0537 GMT)

Futures are slightly higher as sentiment is still positive but European equities seem set to pause for a breather after a two-day rally fuelled by the prospect of lockdowns being gradually eased across the continent.

Expectations of massive stimulus from governments and central banks coupled with a better outlook about the pandemic are propping up the market.

Wall Street and Europe’s volatility indexes are comfortably below 40, as in March 2009, when the last bull market began, after the global financial crisis.

Crude futures jumped on expectations of a demand increase and after U.S. inventories grew less than expected in the week to April 24.

(Stefano Rebaudo)

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(Reporting by Thyagaraju Adinarayan, Joice Alves, Julien Ponthus in London and Stefano Rebaudo in Milan)