LIVE MARKETS-Trade tweets? That don't impress me much

* European shares dip

* Tech pulls back after SAP (Amsterdam: AP6.AS - news) results

* Focus on earnings

* FTSE buoyed by softer pound

* Wall Street lower on weak earnings

LONDON, July 19 (Reuters) - Welcome to the home for real-time coverage of European equity

markets brought to you by Reuters stocks reporters and anchored today by Helen Reid. Reach her

on Messenger to share your thoughts on market moves: helen.reid.thomsonreuters.com@reuters.net

TRADE TWEETS? THAT DON'T IMPRESS ME MUCH (1455 GMT)

Eighteen months into Trump's presidency, investors are way less fussed about his Twitter (Swiss: TWTR-USD.SW - news)

tirades than they used to be.

One of the questions that's bamboozled investors is how much credence to give to Trump's

near-constant tweets on topics from criticism in the media to trade deals - and how seriously to

take recent tweeted threats of car tariffs. (His latest here)

Goldman Sachs (NYSE: GS-PB - news) crunched some numbers to figure out how much volatility these tweets cause.

Their conclusion, in a nutshell? "President Trump’s tweets on trade matter fairly little for

major markets."

The bank's previous research showed that last year, when U.S.-North Korea tensions were

rising, Trump's tweets actually caused more movement than North Korean missile tests.

But this time round that's not the case.

Interestingly, the only asset for which Trump's trade-related tweets have a statistical

bearing is soybeans - the market likely most exposed to disruptions in U.S.-China trade.

GS' economists now see a 60 percent probability of the U.S. imposing tariffs on the

additional $200 billion of imports from China - so it's not that investors are ignoring the risk

of trade war, but simply they're not paying as much attention to Twitter (Frankfurt: A1W6XZ - news) in that process.

(Helen Reid)

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EUROPEAN BANKS: LIGHT AT THE END OF THE TUNNEL? (1421 GMT)

Banks have been the big laggards in Europe this year but some investors say it's time for a

rethink as valuations are attractive again and macro disappointments are easing.

Among them are fund managers at Anthilia in Milan who suggest starting to add exposure to

euro zone banks, even thought they're staying neutral Europe given the trade war risks.

"The stabilisation of the euro zone's economy which, if confirmed, could have an impact on

rates, and a more solid inflation trend could create a more favourable environment for banks

over the coming months," Anthilia CIO Andrea Cuturi said in a note.

"At nine times earnings the downside looks limited, barring a trade war escalation."

An economic slowdown, a pushback of expectations for the first rate hike by the ECB and

political turmoil have sent euro zone banks' shares tumbling this year, pushing their price to

just below 9 times earnings - the lowest valuation since October 2016.

But since mid-June economic disappointments have started to ease - and that's a good sign.

(Danilo Masoni)

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THE PROBLEM WITH FOLLOWING THE BENCHMARK (1400 GMT)

So far this year the performance between U.S. and European stocks has diverged somewhat, be

it on earnings growth expectations or the uncertainty created by a trade war.

Some investors, though, are concerned about the big role tech has had to play in the U.S.

equity rally. Akbar Ali, portfolio strategist, Active Quantitative Equity at SSGA, says there's

room for significant downside for the tech sector in the U.S. if EPS forecasts or guidance

disappoint.

In Europe, Ali favours a defensive approach (health care, industrials and financials), and

sees many opportunities in small caps.

"If we ... have a Q2 earnings surprise on the upside, then you participate in an equity

rally, but if there is any hindrance, companies don't deliver, key barometers are not met -

watch out below. You want to be in a defensive portfolio," says SSGA's Ali.

Christophe Roehri, global head of business development at TOBAM, points to a sharp bias of

the benchmark towards the largest market cap, both in the U.S. and elsewhere, following the

outperformance of the mega cap stocks.

He adds that while correlations between the 10 largest market cap stocks is increasing,

overall market correlations are coming down.

"This is in fact something that is quite unique, and this is something that could be

worrisome if you want to make sure that your portfolio is well-diversified," says TOBAM's

Roehri.

(Kit Rees)

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BRACING FOR AUGUST VOLATILITY (1321 GMT)

With (Other OTC: WWTH - news) a wealth of geopolitical risks building, many investors are hunkering down and trying

to protect their portfolio ahead of a potentially volatile late summer.

"We think volatility's going to be heightened. Bad things tend to happen during the month of

August with less liquidity," says Christopher Peel, chief investment officer at Tavistock

Wealth, who's cut his risk weighting to prepare.

While Peel remains positive on stocks - he says earnings, particularly in the U.S., are

still "firing on all cylinders" - he's taken his equity weighting down slightly as a result.

Last August tensions on the North Korean peninsula drove some sharp swings in equity

markets. This time round it's likely to be news on trade tariffs that will trigger volatility.

Below you can see how both stock and bond volatilities have come down from their spike in

February, though the VIX remains at a higher level than throughout most of 2017.

(Helen Reid)

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INVESTORS SEEK SHELTER IN SPAIN (1146 GMT)

It's not just for its beaches that investors are going to Spain this summer, but also for a

haven of growth in an increasingly uncertain environment.

UBS (LSE: 0QNR.L - news) adds a long recommendation on the IBEX, saying "economic, fundamental and macro

variables are all positive into H2."

"EPS revisions have been modest but IBEX valuation remains near a 5-year low and high

sensitivity to a weaker USD should be supportive based on our FX outlook," UBS analysts write in

their second-half playbook.

Their positive stance on European banks also ties in to the IBEX call, as a third of the

Spanish index is bank stocks. Next (Frankfurt: 779551 - news) week Santander, Bankia (Amsterdam: QU8.AS - news) , Bankinter (Amsterdam: BI6.AS - news)

report on Thursday and Sabadell, BBVA (LSE: 931474.L - news) , Caixabank (Amsterdam: CB6.AS - news) on Friday.

"Risk remains due to high correlation to Italy stocks over the past 6 months, but we see

risk/reward skewed positively," UBS adds.

As you can see below, Spanish stocks are starting to gain back ground relative to Italy

after nearly 15 months of underperformance.

(Helen Reid)

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CAR TARIFFS: WHAT'S THE DAMAGE? (1058 GMT)

Cars are front and centre of the trade war, and U.S. car tariff plans are what Berenberg

economist Holger Schmieding calls a key litmus test for the market's overall theory that Trump

will not follow up on his biggest trade threats.

As the U.S. Department of Commerce prepares to host a public hearing on car and parts

imports today, Schmieding writes: "We assume for our base case that Trump would use the threat

as a bargaining chip but will not actually implement the levies."

If tariffs on the $62 billion annual car imports from the EU do go ahead, it would trigger a

transatlantic trade war with retaliation likely. Teasing out the potential impact isn't easy.

"We think U.S. auto tariffs are now increasingly likely, yet understanding this risk is

challenging given uncertainties around the size of tariffs & impacted/exempt countries," write

UBS analysts.

UBS' base case scenario assumes a 3.7 percent cost increase while their worst case is for a

12.4 percent increase. As you can see below, the cost will diverge for auto manufacturers more

or less dependent on U.S. imports.

While German carmakers are likely to be the worst hit by tariffs, UBS reckons they may

actually be able to pass more of the costs on to consumers as they primarily import premium

vehicles to the United States.

(Helen Reid)

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"WALL OF FREE CASH FLOW AROUND THE CORNER" (1015 GMT)

The earnings season is underway and investors looking for fat pay-outs may well consider the

energy sector, which has struggled a bit as of late due to a pullback in oil prices but is in

healthy shape after recent years' restructuring efforts.

Thomas Adolff, analyst at Credit Suisse (IOB: 0QP5.IL - news) , sees a "wall of cash flow around the corner" and

says now that the big European oil majors have successfully repaired their businesses, the key

issue is what to do with the extra money.

Most oil companies break even at around $50 dollars per barrel, he notes, and even after the

recent decline, Brent crude prices remain well above $70.

"Today, it is less about cash flow break-evens but instead more about what to do with the

surplus in a world where the market is demanding discipline," he says. "We believe that the Euro

Majors will mostly stick to their capital frameworks in the next few years, likely with enhanced

distribution policies."

Shares (Berlin: DI6.BE - news) in Royal Dutch Shell (LSE: 0LN9.L - news) , BP, Total (LSE: 524773.L - news) and Eni (LSE: 0N9S.L - news) have risen

between 9 and 16 percent so far this year as analysts have kept revising their earnings

estimates for the sector upwards.

(Danilo Masoni)

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ARE MARKETS WORRIED ENOUGH? (0943 GMT)

There's a lot going on at the moment with trade and geopolitics, and Hermes Investment

Management's CEO Saker Nusseibeh says that the one thing worrying him is that markets don't seem

to be as worried as he is.

"Investors are not preparing for the possibility that things could go really wrong. They are

confident the signs of the last crisis aren’t appearing so are underestimating the risks,

thinking it will all turn out fine," writes Hermes' Nusseibeh, adding that long-term investors

should actually be getting ready to buy if and when the crunch does happen.

He cites three reasons behind his misgivings. Firstly, he sees a risk that trade spat

between the U.S. and China could escalate (even if unintentionally), which wouldn't exactly be

great if we also get a recession give the yield curve is flattening.

Secondly, the bull run is getting "pretty long in the tooth" with the market reluctant to

let go and admit that it must end sometime. And thirdly, Nusseibeh is concerned that the

industry has simply lost the ability to navigate divergent economic environments and political

risks, instead of simply betting on whether an economy is growing or not.

"I worry the asset management business no longer has the skill-set in house to truly

understand the political machinations of various governments and states or how they might

interact within the context of a multi speed global economy and work it all out," says

Nusseibeh.

(Kit Rees)

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OPENING SNAPSHOT: EUROPEAN SHARES STRUGGLE FOR DIRECTION (0733 GMT)

European shares are off to a rather directionless start today with country indexes moving

between a fall of 0.3 percent for Germany's DAX and a rise of 0.3 percent for Italy's FTSE MIB.

At the sector level, it's worth noting the pull-back in tech stocks on the back of a fall in

German software maker SAP following its earnings update.

Here's your snapshot:

(Danilo Masoni)

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WHAT'S ON THE RADAR FOR THE EUROPEAN OPEN (0647 GMT)

European stocks are set to falter at the open as investors lock in profits after a rally

took benchmarks to one-month highs yesterday.

Earnings season is in full swing with several heavyweights in consumer goods and industrials

reporting.

Disappointment from consumer giant Unilever (NYSE: UL - news) could weigh on the sector. The Anglo-Dutch maker

of ice cream to soap blamed a Brazilian transport strike and weak pricing for its lower than

expected second-quarter sales growth. Weak pricing was one of investors’ main concerns for the

consumer staples stocks last quarter, too, causing some sharp stock falls.

Industrials reported strong results overall, with Swiss engineering company ABB (LSE: 0NX2.L - news) beating

profit forecasts though its sales were weaker and it warned about rising geopolitical

uncertainties. Truckmaker Volvo’s profit also topped forecasts, perhaps providing a sentiment

boost to the autos sector hit by tariff fears. France’s Alstom (LSE: 0J2R.L - news) and Sweden’s SKF (LSE: 0NWW.L - news) also reported

strong results.

And tech stocks, which led gains on Thursday, could extend their rally after Europe’s

biggest tech company, SAP, raised its outlook on forecast-beating results thanks to growth in

its cloud business.

Nordea, the Nordic region’s biggest bank is indicated up 1 percent after its second quarter

profit topped forecasts, though it said revenues were unlikely to reach last year’s level in

2018.

And UK engineer Babcock lowered its full-year revenue outlook; its shares are

seen down 5 to 10 percent at the open.

(Helen Reid)

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FUTURES POINT TO LACKLUSTRE OPEN (0613 GMT)

European benchmark futures are trading down 0.1 to 0.2 percent across the board, indicating

the recent rally will peter out today as investors take profits.

It's a heavy day for earnings meaning results will likely drive more movement underneath

index levels.

Adding to the list of earnings out so far, consumer goods giant Unilever has just reported

lower than expected second-quarter sales, hurt by a Brazilian transport strike and weak pricing.

The latest headlines:

Unilever second-quarter sales disappoint

Sweden's SKF Q2 profit beats forecast, sees higher demand in Q3

French group Alstom posts higher Q1 sales

Roche Tecentriq cocktail cut lung cancer risk, survival data still to come

(Helen Reid)

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EARLY MORNING EARNINGS ROUND-UP (0539 GMT)

Trade war risks and currency risks are the main issues flagged by companies reporting today

thus far. Swiss industrials giant ABB warns geopolitical risks are rising, while unlisted Volvo

Cars said it was on track for another sales record despite trade tensions - perhaps a positive

sign for the autos sector.

Here's your results round-up:

Publicis (Paris: FR0000130577 - news) stumbles on health unit underperformance in 2nd quarter

ABB warns on rising geopolitical risks after Q2 profits beat forecasts

SAP raises outlook as cloud growth "unleashed"

Volvo Cars targets sales record, facing down trade worries

Innogy agrees with E.ON and RWE (IOB: 0FUZ.IL - news) on planned transaction

Nordea Q2 profit narrowly tops forecast

Givaudan (LSE: 0QPS.L - news) profit falls as currency losses in Argentina bite

Essity Q2 core profit slides as higher pulp prices weigh

(Helen Reid)

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MORNING CALL: EUROPEAN RALLY TO STALL (0531 GMT)

European shares are set to take a breather this morning after earnings optimism took

regional benchmarks to a one-month high on Wednesday.

Asian shares extended early gains overnight as upbeat Wall Street earnings buoyed global

investor sentiment, although trade war jitters pushed China's yuan to fresh one-year lows in

both the onshore and offshore markets.

On the radar today are updates from ABB, Alstom, Anglo American (LSE: AAL.L - news) , Kone (LSE: 0II2.L - news) , Kuehne & Nagel,

Publicis, Unilever, Volvo, among other big European companies.

Spreadbetters CMC Markets expect the FTSE 100 to open unchanged at 7,676 points, the DAX to

open 17 points lower at 12,748 and the CAC 40 10 points lower at 5,437.

(Helen Reid)

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(Reporting by Helen Reid, Danilo Masoni, Julien Ponthus and Kit Rees)