LIVE MARKETS-Value bulls, unite!

Aug 14 - 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

VALUE BULLS, UNITE! (1348 GMT)

Murmurings about a return to Value stocks are multiplying and hedge fund Man Group (LSE: EMG.L - news) is the

latest to join the chorus recommending investors buy into this theme at depressed prices.

"Despite value being out of favour at this point in the market cycle, we believe that

investors shunning value-based investment approaches are doing so at their own peril," Man Group

analysts say, adding:

"The recent market moves have presented an interesting opportunity for a potential value

rebound".

They use Russell 1000 Value and Russell 1000 Growth baskets of stocks to extrapolate about

the market's view of the styles overall. As you can see below, Value is at a severe discount to

Growth with the P/E spread between them (in yellow) the biggest since 2002, at 7 points.

Another sign of increased bullishness on Value came in BAML's August European fund manager

survey, which found the percentage of EU investors expecting Value to beat Growth in the next 12

months rose sharply to net 30% from 0% last month.

(Helen Reid)

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U.S. FUTURES SUGGEST STOCKS POISED FOR RELIEF RALLY (1256 GMT)

U.S. stock futures are attempting to reverse Monday's losses. This as the Dollar/Turkish

lira spot rate slides back from the psychologically important 7.00 level.

Early bid/asked indications suggest the iShares MSCI Turkey ETF is poised to gap

about 7 percent higher at the open. This after a 2-day slide which saw the ETF lose about a

quarter of its value.

The S&P 500 is down 4 straight days, matching its worst streak this year when it

closed lower 4 days in a row in mid-March. The last time it fell more than 4 days in a row was a

9-day losing streak from October 25 to November 4, 2016.

Indeed, if the SPX is to end its losing streak, it will likely have to call on large-cap

tech as more cyclical sectors are lagging amid the building EM concerns. So far today, at least,

Fang stocks are trying to do their part with 8 out of 10 members of the NYSE Fang+TM

index higher in premarket trade.

And Home Depot is doing its part to help the Dow Jones Industrial Average. The

stock is trading up about $5, or 2.6 percent, ahead of the open on better-than-expected

same-store sales. That's about 30 points of positive pressure on the DJI at the

open.

Here is your premarket snapshot:

(Terence Gabriel)

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POLITICAL RISK: THIS TIME IT'S (NOT THAT) DIFFERENT (1231)

Do you ever get the feeling markets have largely become immune to political risk? That any

kind of crisis is shrugged off in a few weeks or even a couple of days? That nothing sticks?

Well you're not alone!

The StockCats twitter account pretty much encapsulated that feeling yesterday in the midst

of the lira crisis when it stood by this June 2016 tweet:

From North Korean nuke tests to European populist spurts and trade wars, nothing derails the

bull market, right?

Well actually wait! A study by Rabobank shows investors can't be accused of complacency.

The bank's analysts find a "statistically significant relationship" between geopolitical

risk and financial markets, especially for government bond yields and equity markets.

"As you would expect, higher risk leads investors to sell equities and buy sovereign bonds

with low default risk, leading to lower equity prices, higher bond prices and lower interest

rates," they write.

So, if that's true, why do we get the impression bulls won't budge when faced with risk?

"The impact of the current levels of geopolitical risk are simply not strong enough to

overcome other factors driving markets," is Rabobank's answer.

As Reuters' EMEA markets editor Mike Dolan also recently put it, "the overall picture

remains one of a global bull market that may have been halted but just won’t throw in the towel

– not unless it sees the underlying global economy roll over in a major way."

One thing however that stands out in this latest EM crisis is that gold, at its lowest since

January 2017, isn't seen as a safe haven. And bitcoin, now hovering just above 6,000 dollars,

isn't either.

(Julien Ponthus)

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HOW VULNERABLE ARE EUROPEAN BANKS TO TURKEY STRESS? (1150 GMT)

One of the key questions on investors' minds today is exactly how fragile European banks are

to an extended blowup in Turkish assets. While banks started the day strongly rising, they've

tumbled back into the red, down 0.3 percent and the biggest drag on the STOXX 600.

"The pathway towards a favourable outcome for the bank sector has narrowed, but an

Argentina-style crisis is not yet inevitable," says Benjie Creelan-Sandford, banks analyst at

Jefferies.

"Policy response in coming days will remain crucial and the bank sector is likely to remain

under pressure awaiting greater clarity."

As you can see below, the price-to-book valuation of the banks most exposed - BBVA (LSE: 931474.L - news) , BNP (Paris: FR0000131104 - news)

Paribas, Unicredit (EUREX: DE000A163206.EX - news) and ING - has tumbled significantly in the past few sessions.

But the potential damage from the lira and from subsidiaries is limited, Creelan-Sandford

finds. Even (Taiwan OTC: 6436.TWO - news) for BBVA with highest proportional exposure (15% of group profits), Turkey remains

far from the main driver of group profits.

Of the four, he reckons BNP is best placed as the recent share price move already discounts

the equity exposure, while Unicredit's bargain valuation also prices in some stress. HSBC has a

subsidiary in Turkey but it accounts for less than 1 percent of earnings, according to Deutsche

Bank.

So, where to hide from all this? In "higher-quality" lenders with more domestic-focused

retail operations, reckons Creelan-Sandford, recommending Swedbank (LSE: 0H6T.L - news) , Lloyds, and Caixabank (Amsterdam: CB6.AS - news) .

Here's our Factbox detailing European banks' Turkey exposure:

(Helen Reid)

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TESLA VS ESURE: WHAT DOES "FUNDING SECURED" LOOK LIKE? (1050 GMT)

"Funding secured" is set to become a classic catchphrase in the financial industry but not

in a way that is likely to please Elon Musk, who claimed he had the means to take Tesla private

in a now (in)famous August 7 tweet.

"Investors in Tesla don't appear to be buying into the narrative that funding has been

secured for a $420 buyout to take the company private," Michael Hewson of CMC Markets (LSE: CMCX.L - news) notes

today.

The electric car maker is currently trading at 356 dollars, or about 18 percent below the

stated offer price, which means there is a fairly substantial amount of scepticism out there.

According to Neil Wilson of Markets.com, the "current share price at $356 suggests markets

give him a 50:50 chance."

Now (Frankfurt: 11N.F - news) , if you want to know how trust in a deal is priced, take a look at Bain Capital's 1.2

billion pound offer to take esure private.

The British insurer is now trading at 278.4p, just 0.6 percent below the 280p offer price.

"With (Other OTC: WWTH - news) shares trading around 277p this morning, investors appear to have almost completely

bridged the gap," says Artjom Hatsaturjants of Accendo Markets.

Indeed, that's what "funding secured" should look like:

(Julien Ponthus)

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STRONG EARNINGS PROVIDE A FLOOR TO THE MARKET (0926 GMT)

Well that didn't last long... bank stocks have given back all their early gains as the euro

falls and investors digest fresh comments from Erdogan, who is threatening to implement a

boycott of U.S. electronic products.

The overall European market is still climbing 0.4 percent, however, thanks to a defensive

rally led by healthcare and consumer staples as investors reach for the sectors considered

safer.

Barclays (LSE: BARC.L - news) ' equity team argues earnings remain a strong support for the market.

"Q2 results were generally healthy and, for now, earnings continue to provide a key

fundamental backstop to equities," write Emmanuel Cau and team, noting earnings momentum for

2018 is stronger than average (see chart below).

They recommend staying cautious on European stocks exposed to EM, however.

"The mix of strong USD, tightening DM liquidity and messy politics is not a good one."

(Helen Reid)

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OPENING SNAPSHOT: A HEALTHY REBOUND FOR EUROPE, ANTOFAGASTA SLIPS (0753 GMT)

It's all about bank stocks again today, but this time they are the bedrock of a relatively

strong rebound across European benchmarks with the STOXX 600 up 0.5 percent and DAX up 0.6

percent.

Euro zone banks are up 0.7 percent as the Turkish lira firmed on news the finance

minister would hold a conference call with investors. The gains pull them up from a 21-month low

hit after fears of contagion from Turkey gripped risk assets and exposed European banks in

particular.

Italian banks are also up 0.9 percent as bond yields fall after PM Conte and

ministers agreed the budget would lower the public debt and preserve the stability of state

finances.

In results-driven moves, German utility RWE (IOB: 0FUZ.IL - news) is rising 1.8 percent after saying its

Innogy deal is on track, while Antofagasta (Other OTC: ANFGF - news) is down 5.1 percent on its weak first-half

earnings.

(Helen Reid)

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ON OUR RADAR FOR THE OPEN: ITALIAN BANKS, RESULTS FROM RWE TO ANTOFAGASTA (0646 GMT)

European benchmarks are set to attempt a rebound after two days of heavy selling on Turkey

stress. This follows a move up in Asian markets overnight as the Turkish lira recovered slightly

after the central bank pledged to provide liquidity.

The hit to Europe’s banks remains clear: the euro zone bank stocks index hit its lowest

since the start of December 2016 on Monday, while Italy’s banks index traded at its lowest since

March 2017. Italian lenders could see some relief today as bond yields fell after the country’s

Prime Minister and top ministers said the 2019 budget would aim to lower the public debt.

Earnings are coming back into focus for investors keen for distractions from an increasingly

uncertain geopolitical landscape.

RWE shares are seen rising after the German utility said its deal to break up Innogy with

E.ON was on track, and reported in-line results.

German fragrance and flavouring maker Symrise (IOB: 0G6T.IL - news) is seen rising up to 3 percent after it upped

its sales guidance.

Among British stocks, traders indicate Royal Mail (LSE: RMG.L - news) down 1 to 2 percent after the UK antitrust

regulator fined it 50 million pounds over breach of a competition rule. And esure is seen

rising a further 2 to 3 percent - after yesterday's 31 percent surge - after Bain confirmed an

agreement to take the UK insurer private for 1.21 billion pounds.

Trade tensions clouded copper miner Antofagasta’s confidence in the demand outlook for the

metal, and the stock is seen falling 2 percent after its first-half results.

Here are the latest headlines to digest:

Antofagasta reports lower H1 earnings, trade clouds short-term copper demand

UK's Royal Mail fined 50 mln stg for competition rule breach

Italy PM, ministers discuss 2019 budget, agree it must cut debt

UK's John Menzies (LSE: MNZS.L - news) says HY profit rises 15.4 percent

Bain Capital offers to take UK insurer esure private in $1.55 bln deal

(Helen Reid)

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FUTURES INCH UP IN EARLY TRADE (0604 GMT)

Futures have opened up timidly this morning, with gains of 0.2 to 0.3 percent across

benchmarks as Europe looks set to attempt a rebound. How sustainable it is will be partly

determined by a heavy batch of economic data from German ZEW economic sentiment and euro area

GDP growth to UK labour market figures.

Quite a few results, too, to distract investors from the wider geopolitical picture today.

Here are some of the headlines to watch this morning:

RWE says Innogy deal on track after H1 core profit in line

K+S (Swiss: SDF-EUR.SW - news) sees Salt business profit stagnating this year

Geberit (IOB: 0QQ2.IL - news) expects European construction recovery to continue

Germany's Ceconomy to cut costs after Metro (Dusseldorf: 62M.DU - news) impairment

Nordex (EUREX: 2083267.EX - news) swings to Q2 operating loss as pricing pressure persists

Deutsche Wohnen (IOB: 0OBQ.IL - news) buys 30 nursing facilities for 680 mln euros

Swiss Life (IOB: 0QMG.IL - news) to exceed some of its 2016-2018 financial targets

Straumann raises FY revenue outlook on decade-high organic growth rate

Unilever (NYSE: UL - news) to use JD.com to move products across China

(Helen Reid)

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EUROPEAN SHARES TO REBOUND (0529 GMT)

Benchmarks are called higher this morning after two days of heavy selling, as the Turkish

lira recovers slightly following the central bank's pledge to provide liquidity.

After some Wall Street banks sold off yesterday on Turkey exposure, here's a useful roundup

of the European banks vulnerable:

Asian share markets fought to regain their footing on Tuesday - with Japanese and Australian

benchmarks rising - as tremors from the collapse of the Turkish lira ebbed, though sentiment

took a fresh knock when Chinese economic data proved softer than expected.

Retail sales, industrial output and urban investment all grew by less than forecast in July,

a trifecta of disappointment that underlined the need for more policy stimulus in China.

Spreadbetters expect London's FTSE to open 20 points higher at 7,662, Frankfurt's DAX to

open 41 points higher at 12,400 and Paris' CAC to open 14 points higher at 5,427.

(Helen Reid)

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