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LIVE MARKETS-Two historic items on the calendar next week
* European shares bounce back
* US futures down
* Fresenius (Swiss: FRE-EUR.SW - news) down 10 pct after profit warning
Dec (Shanghai: 600875.SS - news) 7 - 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: julien.ponthus.thomsonreuters.com@reuters.net
TWO HISTORIC ITEMS ON THE CALENDAR NEXT WEEK (1404 GMT)
Can it be called historic if no one cares?
Looking at next week's calendar, there's quite a big difference between Tuesday's Brexit
vote and Thursday's ECB meeting.
Both are historic in the sense that the latter should mark the end of the QE era in the euro
zone and the former could unlock a chain of events that could lead to anything from a hard
Brexit to a no Brexit at all.
The only difference is that for the ECB meeting "hardly anyone seems to be interested", ING
writes, explaining that "anything else than the announcement to bring these purchases down to
zero by year-end (...) would be a great surprise".
In stark contrast, the City is getting ready for what could be the wildest trading days and
nights since British voters surprised the world by voting to leave the EU on June 23 2016.
"We’re preparing for the big day and night by bringing sleeping bags into the office and
have mini golf and pinball in our break out area, so we can keep the traders busy during any
quieter hours," said Samuel Leach, CEO of Samuel & Co. Trading. Check out the story where this
story comes from here:
Although the Brexit vote didn't trigger Armageddon for the British economy, a quick reminder
from AJ Bell shows that "since the summer 2016 vote, the UK stock market has ranked dead last
out of eight major geographic regions in terms of the total return that it has provided, in
sterling terms".
"The pound is 12% lower than it was on the day before the EU referendum vote on 23 June
2016, on a trade-weighted basis", they add.
(Julien Ponthus)
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LET'S CALL HIM KNUT! (1008 GMT)
The mighty DAX has joined the long list of indexes or stocks which became bears in 2018.
It's not that surprising actually given that the German export-heavy benchmark is widely
used as a proxy to play trade war fears which there's been no shortage of in the last few weeks.
Ok, so what do you call a German bear which is just a few days old?
Knut, in a tribute to the late Berlin Zoo celebrity!
Here's a link with more photos and background on Knut: https://reut.rs/2E6Hi5q and here's
our rolling bear market indicator where you can see the latest market action:
(Julien Ponthus)
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OPENING SNAPSHOT: A REBOUND FOR EUROPE WHILE FRESENIUS SLIDES (0835 GMT)
European stocks are bouncing back this morning with the euro zone STOXX up 1.1 percent and
the FTSE 100 up 1.3 percent. Euro zone stocks are still set for their worst week in two months
(since the October selloff) as investors lick their wounds after a turbulent few days.
Fresenius shares are down 10.3 percent, the biggest fallers on the STOXX 600 after the
healthcare firm issued a profit warning and vowed further dividend hikes. The stock hit a near
four-year low and was set for its worst fall since 2002.
"They keep missing," says one trader.
Fresenius Medical Care (IOB: 0H9X.IL - news) shares are also down 5.9 percent, with both dragging the DAX down to
just a 0.5 percent gain.
As you can see below, some of the sectors worst hit by yesterday's selloff are leading the
charge today, with tech up 2.1 percent. Autos, however, are still underperforming.
Old Mutual (Other OTC: ODMUF - news) shares are the top performers on the STOXX, which could be partly down to
a recovery in the South African rand after a sharp fall yesterday due to turmoil at state-run
power firm Eskom.
Nokia (Milan: 23568.MI - news) shares are also among top gainers, up 4.5 percent. Nokia and Ericsson (Hanover: ERCB.HA - news) are two
companies analysts say could gain from Huawei's competitive position in the mobile equipment
market being hurt.
(Helen Reid)
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ON THE RADAR: A FAIR WHACK OF CORPORATE NEWS (0752 GMT)
European stocks are set for a rebound at the open but there is not enough enthusiasm on
Asian markets and certainly not on U.S. futures (S&P 500 down 0.6 percent at the moment) to bet
your life savings they will end the day in the black.
A lot will depend on NFPs and how they tread the fine line of reassuring on growth after the
recent yield curve drama and not changing growing belief the Fed has had a dovish epiphany.
On the corporate front, shares in German healthcare group Fresenius are expected to fall at
the open after it cut its medium-term guidance.
Spain's Telefonica (LSE: 826858.L - news) (TEF.MC O2) is still under the spotlight after its British unit O2
restored its cellular network following a software glitch which caused smartphone users to lose
internet access.
Another sign that Brexit is taking its toll on the British economy with Berkeley Group's H1
falling as people put off house purchases amid increasing uncertainty. That being said, the
house builder's shares are indicated up in pre market.
Not much more optimism with Associated British Foods (LSE: ABF.L - news) saying trading at its Primark fashion
chain was challenging in November.
More on the Renault (LSE: 0NQF.L - news) /Nissan saga with Tokyo prosecutors planning to indict Carlos Ghosn on
Monday for financial misconduct according to Nikkei business daily.
Good news for Roche which wins an FDA approval for a lung cancer treatment and still in the
sector, Novartis (IOB: 0QLR.IL - news) said it would launch emergency allergy shots next year in the United States at
a lower price than rivals.
Deutsche Bank (IOB: 0H7D.IL - news) , which in general could use some good news, is under pressure again on a new
laundering report.
(Julien Ponthus)
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AN UPBEAT OPEN FOR EUROPEAN FUTURES BUT... (0714 GMT)
European futures opened on an upbeat tone, from up 1.5 percent for the FTSE and the DAX to
1.3 percent for the CAC.
But as said earlier, there sure wasn't any kind of exuberance on Asian bourses with MSCI (Frankfurt: 3HM.F - news) 's
broadest index of Asia-Pacific shares outside Japan up 0.3 percent and Chinese
blue chips just slightly in negative territory (-0.05 percent).
Meanwhile, U.S. futures are also slightly in the red with the S&P down 0.24 percent.
(Julien Ponthus)
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U.S. NON FARM PAYROLL: CAREFUL WHAT YOU WISH FOR...(0656 GMT)
Today's U.S. job data will be key for market sentiment but it's not crystal clear what would
be the most reassuring figure.
"Usually we look at these releases and want to see the best possible numbers – for obvious
reasons – but given the fragility in the markets, I wonder whether the goldilocks report for the
current environment involves decent – but not great – jobs growth and only moderate wage gains",
writes Craig Erlam from Oanda.
"This would give the Fed and investors encouragement that the economy is ticking along
nicely and allow it to take the foot off the gas a little, potentially taking some pressure of
the middle part of the yield curve and easing investor concerns".
With (Other OTC: WWTH - news) more and more investors taking the view that the Fed has become more dovish, stellar
job creations or wages growth could change again the expectations for rate hikes and lead to
more volatility.
On the other hand, fears that the U.S. yield curve is pointing to a stronger than expected
slowdown have also to be addressed somehow.
(Julien Ponthus)
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MORNING CALL: SET FOR A TENTATIVE REBOUND (0628 GMT)
The money still seems to be on European stock markets rebounding at the open after their
rout yesterday. IG (Frankfurt: A0EARV - news) expects London's FTSE to open 98 points higher, Frankfurt's DAX to rise 103
points and Paris' CAC 55 points.
CMC Markets (LSE: CMCX.L - news) is giving similar levels for the open but there sure isn't that much enthusiasm
on Asian markets at the moment despite Wall Street recouping most of its losses towards the end
of the session.
Support can't be expected from oil prices which are still dragged by OPEC's decision to
delay a final decision on output cuts.
(Julien Ponthus)
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