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LIVE MARKETS-VIX's top is not necessarily the market's bottom

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 (, Joice Alves ( and Julien Ponthus ( in London.


Stocks are staging a solid bounce back today and in Europe we're heading for the second straight session of gains - a massive feat given the steep sell-off. The S&P 500 futures are also comfortably cruising at +4%.

But is the market bottom here? Based on 2008 financial crisis charts, not necessarily. S&P 500 fell another 20% after VIX's peak before it started its record long bull run.

In the 2020 rout, VIX hit a top only day before yesterday, it could still run higher but if it doesn't, we're potentially heading for one last leg of selling.

Though the comparison should be taken with a pinch of salt as what we're going through now is obviously not the same as the 2008 financial crisis.

(Thyagaraju Adinarayan)



Let's enjoy the relative calm provided by the with some positive thinking from UBS GW's chief economist.

"Markets always underestimate the adaptability and resilience of people in a crisis", Paul Donovan said in his morning note in which he argues that it will be key to ensure consumers can continue spending.

"If incomes can be protected, some consumer spending continues in a lockdown. Around 60% of spending is stable or increases (housing, food at home). 15% of spending is delayed. 25% of spending is lost – that is where stimulus is needed."

(Julien Ponthus)



Sentiment has continuously improved this morning in Europe and we're now looking at a rally through all geographies and sectors.

It seems the trillions of stimulus poured down by central banks and governments are finally reassuring investors. At least for now.

The most impressive move is probably in the travel and leisure sectors, with many companies facing unprecedented disruption.

The sector is up a staggering 7.8% and stocks such as Cineworld, which has to close cinemas, was up 22.7% at some point! Another example of money returning to the sector this morning is French airport operator ADP up 20% despite a dramatic slump in traffic.

Oil and Gas stocks are also making a spectacular performance, up 8.4% boosted by rebounding oil prices.

Interesting to note that the FTSE 250 - which underperformed its peers throughout the crisis - is also one of the best performers among indexes with a 5.9% surge earlier today.

(Julien Ponthus)



Corporate announcements overnight and this morning continue to provide some light on the impact of the epidemic on the 'real economy' with notably aluminium maker Norsk Hydro reducing or halting production of some components for the auto and construction industries.

Similar move from Jaguar Land Rover which will temporarily suspend production at its UK manufacturing facilities from next week.

Nice exclusive from Bate Felix in Paris who reported that Total would freeze recruitment, boost costs savings and halt its share buyback programme.

In a totally different sector, French lottery operator Francaise des Jeux said the French lockdown would hit as its tickets are typically sold in bars and cafes. It’s not all doom and gloom though, with trading platform CMC Markets upgrading its annual earnings targets for the fourth time in less six months, as the frantic selling driven by the coronavirus drove huge rises in financial market volatility and trading volumes.

That’s reassuring for shareholders of banks which have big trading operations which could offset the hit expected in retail banking. In the sector, note that the BoE cancelled this year's stress tests to enable them to focus on lending through the coronavirus crisis.

Interesting development for M&A in the age of corona virus: Bloomberg News reported that LVMH is considering buying shares of Tiffany through the open market at a discount rather than through its takeover offer. While it’s reassuring to see that strategic deals are not cancelled altogether, this will spook many merger arb funds.

The general assumption is that M&A comes to a total halt in times like but French supermarket retailer Casino announced it had agreed to sell 567 Leader Price stores, and three warehouses, to German discount rival Aldi in a deal worth 735 million euros.

Toilet roll rush, M&A bankers and lawyers salute you!

Still in retail, there are announcements both in the UK and in Germany that competition laws will be loosened to cope with the stress supermarkets are under.

Another piece of news which could somewhat reassure investors is Zurich keeping its dividend proposal amid the general freeze in pays out decided in the last few days by European companies. Latest example is pub operator J D Wetherspoon and Travis Perkins.

(Julien Ponthus)



European stocks seem set to stay in the black, at least for now, after Asia's rallied and oil prices bounced back.

Futures for the STOXX 50E and the Dax are up about 1.6% after the pan-European STOXX 600 closed up 2.9% yesterday.

We're not done yet in terms of stimulus which could help lift sentiment.

The next salvo of fiscal bazookas is expected from the U.S. with a $1 trillion-plus package and from China set to unleash trillions of yuan to revive its economy.

The dollar rush is far from over however and an ongoing cause of stress on the markets.

On the epidemic front, the virus has so far infected more than 245,000 people across the world and the death toll exceeds 10,028.

Click here to read the latest on the pandemic:

(Julien Ponthus)


(Reporting by Danilo Masoni, Joice Alves, Julien Ponthus and Thyagaraju Adinarayan)