LIVE MARKETS-The wind from Asia
* European bourses higher
* Autos, miners leading gains
* STOXX 600 on track for 4th straight weekly gain
MyWelcome to the home for real-time coverage of European equity markets brought to you by
Reuters stocks reporters and anchored today by Josephine Mason. Reach her on Messenger to share
your thoughts on market moves: josephine.mason.thomsonreuters.com@reuters.net
THE WINDS OF ASIA (1035 GMT)
European markets are clearly in an upbeat mood this morning but that probably tells us more
about the state of global markets than the economic health of the old continent itself after
yesterday's PMI gloom and ECB dovishness.
With (Other OTC: WWTH - news) autos and miners leading the way, cyclicals are in a good shape thanks to a rather
positive view on trade.
As Andrew Milligan from Aberdeen Standard, just told us, "for those who are looking to put
money in the market", the latest on the U.S.-Sino (Dusseldorf: 1205802.DU - news) trade front isn't a negative.
The "wind from Asia" is also stirring hopes of Chinese stimulus while Wall Street echoed of
some positive earnings and hyped-up chipmakers.
Bourses from Paris to Milan are rising well above 50 beeps and the export-heavy DAX, up a
vigorous 1.2 percent, shows perhaps how investor optimism is targeting the global economy rather
Europe itself.
The latest edition of Bank of America Merrill Lynch's Flow Show reminds up how unpopular
European stocks are with outflows during 45 weeks out of the past 46.
Here's a snapshot of European markets at 1028 GMT:
(Julien Ponthus)
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EUROPEAN FUTURES HIGHER EVEN AFTER INTEL WARNING (0744 GMT)
Futures for euro zone benchmarks are pointing to a pretty buoyant open this morning, with
the headline EuroStoxx 50 up more than 0.6 percent after hitting their highest level since
December 5. Germany's DAX futures are up as much as 0.8 pct.
FTSE futures are underperforming as the strong sterling drags.
So far, the markets appear to be shrugging off Intel (Euronext: INCO.NX - news) 's profit and sales warning and Q4 sales
miss which has further stoked fears of stagnating smartphone demand and a cooling Chinese
economy after sales warnings from Apple (NasdaqGS: AAPL - news) , Samsung and Taiwan Semiconductor earlier this month.
European chip stocks, battered after the nasty headlines, rallied yesterday as investors
focused on STMicro's upbeat outlook for the second half of the year and ignored the gloomy Q1
guidance. Whether that will continue today is not clear.
Investors are also bracing for a heavy newsflow next week - U.S-China trade talks,FEd
meeting and Brexit vote in the UK on Tuesday - that could determine direction amid shaky market
confidence.
"There's been a lot of speculation of the last couple of weeks and Wilbur Ross' claim that
the two sides are “miles and miles” from a deal with “lots and lots of issues” isn’t going to
fill people with confidence," says Oanda analyst Craig Erlam.
"Still, these negotiations do typically come with posturing from both sides and investors
may will willing to look through it, with previous commentary being much more positive."
There was mixed news from the telecoms sector: Ericsson (Hanover: ERCB.HA - news) 's shares were expected to rise 4
percent after its consensus-busting Q4 results while Telia shares were seen lower after the
Nordic telecom group's weaker-than-expected earnings.
Vodafone, the world's second-largest mobile operator, has warned that revenue growth slowed
in its third quarter due to price competition in Spain and Italy and a slowdown in South Africa.
Here's your snapshot:
(Josephine Mason)
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EUROPEAN HEADLINES TO WATCH: TELECOMS AND GIVAUDAN (0658 GMT)
With earnings season in full swing, there's plenty of earnings to digest this morning.
Telecoms firms will be in focus with Ericsson, Telia and Vodafone reporting.
Let's start with the good news: Swedish mobile telecom equipment maker Ericsson has reported
a significantly smaller Q4 operating loss than expected and said it was on track to reach its
financial goals.
The operating loss was 1.9 billion crowns ($209.7 million), against a 19.3 billion loss a
year ago, and a mean forecast for a 3 billion loss expected in a Reuters poll of analysts.
Now (Frankfurt: 11N.F - news) the not so good: Telia's fourth-quarter core earnings were below market expectations and
the company said it expected the challenging conditions in Sweden, its largest market, to
continue.
But some shareholder-pleasing news: it has proposed a dividend of 2.36 crowns, above a
median forecast of 2.30 crowns.
Vodafone will issue its trading statement later this morning. Its shares were hammered
yesterday after its South African unit Vodacom's weak numbers.
In other more downbeat results news, fragrance and flavour maker Givaudan (LSE: 0QPS.L - news) said its
weaker-than-expected net income in 2018 was hit by higher financing costs and foreign currency
losses.
Online retailers, which have been the big winners of the Christmas holiday sales, may get a
boost from a report in The Times that Britain has ruled out an online sales tax proposed to help
high street vendors in the country as it would fall foul of the European Union rules.
French dairy group Savencia (LSE: 0DTK.L - news) may be in focus after its unit Sodilac said it was recalling
infant formula sold in pharmacies in France and produced at a Spanish factory due to possible
links with salmonella cases among babies.
Here are the other headlines:
Swatch plans to reduce capital via repurchased shares
Air Liquide Makes A Strategic Investment In The Production Of Decarbonated Hydrogen
America Movil buying Telefonica (LSE: 826858.L - news) operations in Central America
MEDIA-Three funds, not Autogrill (Milan: AGL.MI - news) still in race for Elior (Paris: FR0013204435 - news) 's Areas division -Les Echos
BRIEF-Accorhotels Announces Two Bond Issues For 1.1 Billion Euros
(Josephine Mason)
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EUROPE SEEN EXTENDING GAINS (0620 GMT)
Spreadbetters expect European shares to extend yesterday's gains and build on rises on Wall
Street and in Asia overnight, but trading may be cautious as investors brace for a slew of
crucial events next week from the Fed meeting, a key Brexit vote in London on Tuesday and the
latest round of U.S.-China trade talks.
Watch out for sterling. The pound breached the psychologically important $1.3 to the dollar
overnight after The Sun reported that Northern Ireland's Democratic Unionist Party has privately
decided to offer conditional backing for Prime Minister Theresa May's Brexit deal next week.
That added further fuel to hopes the UK might avoid a no-deal Brexit on March 29.
Still, financial spreadbetters at IG (Frankfurt: A0EARV - news) expect London's FTSE to open 21 points higher at 6,840,
Frankfurt's DAX to open 71 points higher at 11,201 and Paris' CAC to open 25 points higher at
4,897.
CMC Markets (LSE: CMCX.L - news) are expecting slightly small gains - the FTSE to rise 14 points, the DAX up 65
points and CAC 40 up 22 points.
(Josephine Mason)
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