February 15, 2018 / 10:29 AM / a year ago

LIVE MARKETS-Wanna buy cheap euros? How about Spanish equities?

    * European stocks rise
    * Earnings boost Airbus, Aegon, Ipsen

    Feb 15 - 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
    Here's the pitch from Intl FCStone: if you are bullish on the euro, a cheaper way than bonds
or cash to get into that trade is to buy European equities, in particular Spanish stocks.
    "Spain looks particularly interesting because its forward P/E has fallen by 18.5 percent 
since the index peaked in May. Spanish equities trade for 12.4 times forward earnings, matching
the levels observed during most of the sovereign debt crisis," strategist Vincent Deluard
    Here's his chart:      
  Deluard also points out that while European equities did not underperform during the recent
correction, they did not match their U.S. peers during the preceding "melt-up". 
  Have a look at the STOXX versus the S&P 500:  
    (Julien Ponthus)    
    European shares are on the up in early trading as well-received earnings updates send shares
in Airbus, Ipsen and Aegon to the top of the STOXX, while a broader
bounce in commodities-linked firms and banks is also adding to gains.
    A fall for Nestle is weighing on the Swiss Index, while the bond proxy-type
sectors are all on the backfoot as bond yields continue to march higher.
    Here's your opening snapshot:
    (Kit Rees)    
    European stocks were set to extend their rally on Wednesday as equity investors around the
world shrugged off a spike in U.S. inflation which had caused a sharp but short-lived drop in
stock markets in the previous session. Futures indicated gains of 0.5 to 0.8 percent across
Europe’s major benchmarks.
    A raft of earnings to digest today including heavy hitters Nestle and Airbus. Nestle said it
had no plans to increase its stake in L'Oreal, and a trader said the comments had triggered
speculation Nestle could sell its stake. The Swiss food giant’s shares were indicated down 1.6
percent in pre-market. 
    Airbus shares were seen up 3 to 4 percent after profits for Europe’s largest aerospace group
came in higher than expected, although it took a new 1.3 billion euro hit on its A400M military
transport plane.
    With the rand hitting three-year highs against the dollar after President Jacob Zuma
resigned, stocks exposed to South Africa could get a boost. And autos stocks could gain from
data showing sales of passenger cars in Europe rose twice as fast in January as in the whole of
    (Helen Reid)
    Once more it's set to be a busy day of earnings, with numbers from the likes of Nestle,
Airbus and Schneider Electric to keep traders busy. Below is a round-up of this morning's key
European company and macro headlines.
    Nestle disappoints in 2017, no plan to increase L'Oreal stake
    Airbus takes 1.3 bln euros charge on A400M military plane
    Schneider Electric ends 2017 on high note despite currency headwinds
    Capgemini annual revenue beats on strong Digital and Cloud business
    Norwegian Air reports bigger-than-expected Q4 loss
    Aegon reports Q4 earnings above analysts' expectations
    Straumann FY revenue hit $1.08 bln on higher sales
    Insurer NN Group's Q4 profit jumps on Delta Lloyd takeover
    Insurer Lancashire warns of tough year ahead, swings to loss
    Anglo-Dutch RELX to end dual-company structure, profit rises 6 pct
    Britain's ConvaTec 2017 profit down 3.3 percent on supply issues   
    Lloyds axes $140 bln Standard Life Aberdeen contract
    European car sales up 6.8 pct in January, led by French gains
    French unemployment falls to lowest level since 2009
    Amazon says to create 2,000 jobs in France in 2018
    Hedge fund Bridgewater makes $22 bln bet against European firms
    ANALYSIS-Sorry, not sorry: Wall Street not quitting 'vol' products
    (Kit Rees)
    Stock futures have opened robustly higher - up 0.5 to 0.8 percent - across the major
European benchmarks, indicating yesterday's rally will be extended. German bund futures have
opened lower, however, as yields continue to rise across markets.
    Looks like JP Morgan may have been prescient in its Monday note arguing "The negative
correlation between stock and bond prices is not dead, in our view, it will quickly reestablish
itself and ultimately prove a valuation cushion in case of further equity weakness."
    (Helen Reid)
    After yesterday's U.S. inflation data, European investors will be focusing on, among other
things, speeches by ECB policymakers Praet, Mersch and Lautenschlaeger.
    "We think they might signal that the recent market turbulence is not a source of concern
given the strength of the current expansion," write Societe Generale analysts. "They are also
likely to reiterate that the asset purchase programme will continue until September this year
and that what happens beyond then is entirely data dependent."
    A heavy slate of earnings today to keep traders and investors occupied as well: Airbus
 announces it's taking a 1.3 billion euros charge on its A400M military plane, clouding
its better-than-expected profits, while budget airline Norwegian Air reports a bigger
than expected Q4 loss. Other big companies reporting today include Nestle and Capgemini.
    In other results: 
    Schneider Electric ends 2017 on high note despite currency headwinds
    Straumann FY revenue hit $1.08 bln on higher sales
    Insurer NN Group's Q4 profit jumps on Delta Lloyd takeover
    (Helen Reid)
    Good morning and welcome to Live Markets. 
    European stocks are called to open strongly higher today, following the lead of Asian
markets which gained after Wall Street shrugged off a spike in inflation many had feared would
derail equities once again.
    Asian shares rose overnight after U.S. stocks took the inflation data in their stride, with
the Dow Jones up 1 percent and the S&P 500 up 1.3 percent. Bonds plunged, however, as Treasury
yields jumped, in anticipation of more rapid U.S. interest rate hikes.
    Currency movements could colour European trading today, with the euro hitting a 10-day high
against the dollar as the greenback suffered further losses.
    Spreadbetters call the DAX 132 points higher at 12,470.9, the CAC 40 up 50 points at
5,215.2, and the FTSE 100 35 points higher at 7,248.8. 
    (Helen Reid)

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