LIVE MARKETS-Trump: Is the bark worse than the bite?

* Earnings lift European shares

* Britain's blue chips up 0.6%

* Vodafone jumps 7.8% as it keeps dividend 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 (joice.alves@thomsonreuters.com) and Julien Ponthus (julien.ponthus@thomsonreuters.com) in London and Stefano Rebaudo (stefano.rebaudo@thomsonreuters.com) in Milan.

TRUMP: IS THE BARK WORSE THAN THE BITE? (0955 GMT)

As if we didn't have our hands full with coronavirus, the trade spat between the world's largest economies has been rekindled with the COVID-19 blame game now adding a layer of uncertainty to the markets.

The U.S.-China trade tensions had fallen off the radar in recent months, but markets will hear more from it as the U.S. gear towards its November election.

"Policy regarding China will likely become a major issue in the U.S. ahead of the November 2020 presidential election," says Frédérique Carrier, head of investment strategy at RBC Wealth Management.

Will China- U.S.tensions come back in full force?

Carrier says RBC doubts it but better to be cautious when it comes to equities investment.

"We reiterate our message to keep some powder dry" as potential missteps from either side could cause serious pain as the global economy is already weak, he says.

So far, "the bark has been worse than the bite," writes Eleanor Creagh at Saxo Bank, but you never really know what is in store with Trump and "second-guessing the mercurial President Trump’s next move has long been a losing strategy," she adds.

(Joice Alves)

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RETAIL SECTOR SET FOR LONG TERM CHANGES (0840 GMT)

The coronavirus outbreak is going to reshape some industries, as social distancing will change consumer behaviour and as a consequence company results.

Airlines are already under scrutiny by analysts, but also the retail sector has come into the spotlight.

According to a Morgan Stanley research note, most retailers "are likely to be faced with a combination of higher operating costs and lower demand for at least the next 12-18 months."

The investment bank expects sector earnings in 2020 and 2021 to be 62% and 33% lower, respectively, than in 2019, even if it is cautions because the visibility is extremely low.

Boohoo and Zalando, which will surely benefit from further online channel shift, are already discounting this outlook and probably more, with share prices at all-time highs.

On the other hand, shares in companies such as AB Foods, Kingfisher and M&S "have become oversold," according to Morgan Stanley.

(Stefano Rebaudo)

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OPENING SNAPSHOT: GERMANY, FOR BETTER OR FOR WORSE (0725 GMT)

European bourses opened slightly in the red this morning but gradually made their way back to positive territory.

Although they usually are indicators of a risk-off coronavirus session, defensive sectors like pharmaceuticals, utilities and telecoms are outperforming and helping the market rise and offset losses in travel and leisure notably.

Germany AG provided many of the top movers in the first minutes of trading for the better and for the worse.

ProSiebenSat.1 shares are pulling off the best performance on the STOXX 600, rising way over 10% after news that U.S. private equity house KKR acquired a stake of 5.2% in the German broadcaster.

Thyssenkrupp was also the top loser for a while after its trading update. Property developer Land Securities however quickly challenged the German steel company for the place of the biggest loser. Steel rival ArcelorMittal shared the misery with a big, albeit just smaller fall.

Nice ray of hope for home improvement group Kingfisher which hit their highest level since March 25 after reporting that underlying sales turned positive in the first week of May as more of its stores re-opened from coronavirus lockdowns.

Another big player of the first few minutes of trading is Vodafone, up over 4% after meeting FY guidance.

Here are the movers and shakers at 0720 GMT:

(Julien Ponthus)

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ON THE RADAR: VIRUS-LED HITS AND BLISS (0644 GMT)

Good news first: Danish drugmaker Lundbeck beat Q1 sales expectations, French telco Iliad said Q1 sales rose 6.9% and Logitech, maker of webcams, keyboards and mouses, got a sales boost from more people using its products while working from home (WFH).

German software company TeamViewer also benefited from the WFH trend with a 75% jump in billings in Q1 and its shares were set to jump at the open.

Now, for the bad news, coronavirus-induced Q1 pain comes in a wide variety of manner this morning.

The most obvious display of profit and sales hit is found in duty-free retailer Dufry which unsurprisingly reported sales collapsing 94% in April as travel curbs remained in place in most of the Swiss airport retailer's locations.

Another obvious one in the travel and leisure sector is Spanish travel booking group Amadeus publishing a 57.5% slump in first-quarter adjusted net profit.

Highlighting how difficult it will be to resume operations, Ryanair said it would recommend all passengers wear face masks when it reopens some routes in July and customers will be required to ask crew to use the toilet.

Plane parts maker FACC said it expects significant demand and production restrictions as plane makers pause production to adjust to travel restrictions.

French transport infrastructure company Alstom also warned of a hit to its results for the 2020-2021 financial year.

From Germany, warning of financial hits were reported from a good spectrum of industries: Deutsche Post, Thyssenkrupp, Allianz and E.ON.

Share in the latter are up slightly up in premarket trade while Thyssenkrupp and Allianz are down.

Talking about big movers, shares in ProSiebenSat.1 are up over 3% in early Frankfurt trading after U.S. private equity house KKR acquired a stake of 5.2% in the German broadcaster.

(Julien Ponthus)

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MORNING CALL: DOUBTS ON VIRUS CONTROL DENT SENTIMENT (0535 GMT)

No clear trend yet for European stocks this morning as growing doubts about how effectively the virus outbreak can be contained if lockdowns as eased dent sentiment across the world, particularly in Asia where shares ended the session lower.

Futures for the old continent are roughly flat at the moment while slightly in the red for Wall Street.

Looking at oil, gold or the euro all edging up some modest gains, there's no sign of a big risk-off session building up here but of course, this could change quickly.

On the corporate front, not much to boost morale with German insurer Allianz blaming the pandemic for a 29% fall in Q1 net profit as it faces claims for business disruptions, cancelled events and a lack of demand for car and travel insurance.

Other German companies reporting coronavirus hits this morning include Thyssenkrupp and Deutsche Post. Have a look here:

(Julien Ponthus)

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(Reporting by Joice Alves, Julien Ponthus and Stefano Rebaudo)