You now have access to the new London South East Beta Website, Click Here



Register
Login:
Share:
Email Facebook Twitter

Tower Resources keep all options open including Njonji farm-in deal Watch Now

Tower Resources keep all options open including Njonji farm-in deal
Tech company Mporium delivers an outstanding set of Q1 results says CEO De Groot


UK Money News


LIVE MARKETS-U.S.-China trade talks: where to from here?

Tue, 12th Feb 2019 10:37


* European shares open higher * Michelin outlook boosts autos * Kering reverse course to rise after results Welcome 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: rm://josephine.mason.thomsonreuters.com@reuters.net U.S.-CHINA TRADE TALKS: WHERE TO FROM HERE? (1032 GMT) As U.S. trade representative Robert Lighthizer arrives in Beijing for high-level trade talks between the world's two largest economies, Citi reckons the market is already partly pricing in a deal, even though it could be more complicated than that. "Markets seem to be positioned for a U.S.-China trade deal, but trade war risks remain," Citi strategists write. Citi expects additional trade and investment restrictions, especially on emerging technologies and sectors related to the "Made in China 2025" plan even if a preliminary trade deal is achieved. Their base case (with a 55% probability) is a "veneer" of a deal with chances of a deadline roll-over, though a tariffs limbo remains. They think the deal could include the following commitments by China: * Reduce the goods trade deficit by $100-$200 billion by end 2020 * Grant (by mid-2020) higher market access for U.S. exports and services * Structural changes like enforcing stricter intellectual property protection * Increase transparency on currency practices Their bear case (with a 40% probability) is that the U.S. increases pressure on the Chinese economy and increases the tariffs on Chinese imports from 10 to 25% on March 2. Citi sees global equities falling 10 to 15 percent in the short term. The bull case has only a 5% probability: a comprehensive deal, a rollback of tariffs and a softening of the U.S. stance on China. This would boost global equities up around 10 percent by end-2019 Below you can see their full scenarios and impact on different asset classes: (Helen Reid) ***** OPENING SNAPSHOT: TRADE & TYRES (0846 GMT) European shares are up for a second day after taking a beating last week, helped by hopes around the resumption of trade talks between China and Washington and a strong update from Michelin, which is rallying 10 percent to the top of the STOXX 600 after the tyre maker pledged a profit gain this year. Its gains are spreading to the whole autos sector, while shares in other companies that supply the automotive industry, such as chipmakers, are also doing well. Well-received results also from German wholesaler Metro and staffing company Randstad boosted their shares, while a small beat from luxury giant Kering failed to impress investors. Also lifting sentiment is the possible aversion of a second government shutdown after U.S. lawmakers reached a tentative deal on border security funding. Here's your opening snapshot: (Danilo Masoni) **** WHAT WE'RE WATCHING BEFORE THE OPEN (0755 GMT) European shares are expected to open higher, boosted by optimism about the U.S.-China trade negotiations and relief after U.S. lawmakers reached a tentative deal on border security funding to avert another government shutdown. Futures on main euro-zone benchmarks are trading up more than 0.5 percent, with trade-sensitive DAX up as much as 0.8 percent. Earnings will also help drive direction, with strong numbers from Gucci owner Kering, Michelin and Randstad, while Thyssenkrupp delivered a mixed report. The German steel-to-elevator maker stood by its 2018/19 targets but warned the global economic environment is darkening after reporting a big drop in Q1 results. Its shares are up 1.5 percent in early Frankfurt trade. Randstad, the world's second-largest staffing company, posted a 1 percent rise in fourth-quarter underlying earnings, slightly ahead of analysts' estimates, amid slowing European markets. German online classifieds company Scout24 stood by its 2019 guidance. Its shares were indicating higher. Gucci owner Kering reported a 24.2 percent rise in comparable sales in the fourth quarter, slightly above forecasts even against a cooling economic backdrop in China. Echoing upbeat comments from rival LVMH about China's appetite for luxury goods last week, the company said it did not observe any sales slowdown among its Chinese clientele in Q4. Elsewhere in retail, Germany’s Metro shares are up 2.8 percent after its results, while embattled department store Debenhams is expected to get a boost after securing a 40 million pound in funding. Some good news for the autos suppliers which, like luxury goods companies, has been rattled by worries over China demand - Michelin pledged to deliver a further rise in operating profit this year despite challenging conditions in its main tyre markets as it posted better-than-expected results for 2018. Its shares were seen up 2-3 percent. But Renault will be in focus after Nissan slashed its FY outlook. In banking, Vontobel posted a 14-percent rise in adjusted full-year net profit, as Swiss private bank and asset manager took in 5 billion Swiss francs ($4.98 billion) in fresh client money. Its shares were indicated to open down 2 percent. Hot on the heels of its profit warning last week, TUI said underlying losses had widened in its first quarter, inline with company expectations. In dealmaking, pressure is mounting for logistics firm Panalpina, with Artisan Partners, which owns 12 percent of the company, calling on the board to reassess DSV's takeover offer. Other headlines of interest: Online trading platform Plus500 expects 2019 results to be below expectations; Indivior Says Court Denied Its Motion To Prevent Sale Of Suboxone Copycats; Norway's Kvaerner to pay first dividend since 2015; 'Hold your nerve on Brexit,' Theresa May to tell British lawmakers; Debenhams Announces Additional 40 Mln Stg Credit Agreement; Bayer's Monsanto wins arbitration ruling over royalties from Indian seed company; European insurer ERGO to sell non-life business in Russia; Norway's sport retailer XXL scraps dividend for 2018 amid poor results; Renault's Senard to meet Nissan CEO Saikawa in Japan this week - Nissan (Josephine Mason) ***** EARNINGS A PLENTY (0658 GMT) We've got plenty of earnings to digest this morning: Gucci-owner Kering, TUI, Thyssenkrupp and Bank Vontobel to name a few. Just days after its FY profit warning, TUI has reported a widening loss in its first quarter to end-December, inline with the company's expectations, and said it expects bookings broadly inline with the previous year. Thyssenkrupp saw a drop in Q1 adjusted EBIT and warned that the global economic environment is darkening, but the number was higher than the Refinitiv estimate and the German industrial giant stood by its 2018/19 targets. In banking, Vontobel posted a 14-percent rise in adjusted full-year net profit, as Swiss private bank and asset manager took in 5 billion Swiss francs ($4.98 billion) in fresh client money. Delivering an increase in 2018 revenue and operating income, Kering CFO has just said the company did not observe any sales slowdown among Chinese clientele in Q4. That echoes comments from LVMH last week. Elsewhere in retail, Norwegian sport retailer XXL has scrapped its dividend, citing disappointing results in the fourth quarter of 2018. That follows a major profit warning in December. Some good news from the autos sector which, like luxury goods companies, has been rattled by worries over China demand - Michelin pledged to deliver a further rise in operating profit this year despite challenging conditions in its main tyre markets as it posted better-than-expected results for 2018. British Airways owner, IAG has said it would cap ownership of its shares by non-Europeans at the current 47.5 percent level to maintain its status as a European-owned airline. That will ease concerns about possible disruption after Brexit. In seed and drug news, Bayer's Monsanto unit has won proceedings against Indian seed maker Nuziveedu Seeds Ltd (NSL) in a royalty dispute, lawyers familiar with the matter said. (Josephine Mason) ***** EUROPE SEEN STRONGER (0623 GMT) European shares are expected to open higher this morning There's no new news on the trade talks, mind, and there might not be for days (if at all) - discussions among deputy-level officials started on Monday before minister-level meetings later in the week. At the end of January, talks ended with some progress, but mostly U.S. declarations that much more work was needed. Underscoring the risks facing the world's No. 2 economy as it navigates the trade spat though, China's commerce ministry warned that consumption growth is likely to slow further this year as the economy cools. Financial spreadbetters IG expect London's FTSE to open 17 points higher at 7,146, Frankfurt's DAX to open 63 points higher at 11,078 and Paris' CAC to open 31 points higher at 5,045. (Josephine Mason) *****



(c) Copyright Thomson Reuters 2019. Click For Restrictions - https://agency.reuters.com/en/copyright.html




Back to UK Money News


Share Price, Share Chat, Stock Market news at lse.co.uk
FREE Member Services
- Setup a personalised Watchlist and Virtual Portfolio.
- Gain access to LIVE real-time Regulatory News (RNS).
- View more Trades, Directors' Deals, and Broker Ratings.
Share Price, Share Chat, Stock Market news at lse.co.uk




Datafeed and UK data supplied by NBTrader and Digital Look. While London South East do their best to maintain the high quality of the information displayed on this site,
we cannot be held responsible for any loss due to incorrect information found here. All information is provided free of charge, 'as-is', and you use it at your own risk.
The contents of all 'Chat' messages should not be construed as advice and represent the opinions of the authors, not those of London South East Limited, or its affiliates.
London South East does not authorise or approve this content, and reserves the right to remove items at its discretion.