LIVE MARKETS-"Wall of free cash flow around the corner"

* European shares dip

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

* Focus on earnings

* FTSE buoyed by softer pound

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

"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)

*****

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