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LIVE MARKETS-November 2019: a RORO kinda month

Fri, 29th Nov 2019 10:12

Welcome to the home for real-time coverage of European equity markets brought to you by Reuters
stocks reporters and anchored today by Thyagaraju Adinarayan. Reach him on Messenger to share
your thoughts on market moves: thyagaraju.adinarayan.thomsonreuters.com@reuters.net

NOVEMBER 2019: A RORO KINDA MONTH (1010 GMT)

It's been a RORO (risk on/risk off) kinda month. The STOXX 600 was up during 11 sessions and
down for 10 and moved almost exclusively on U.S.-China trade war news.

Actually, there's been such a flurry of trade war headlines that there's probably a case of
coming up with new handy acronyms like TWOLS (Trade War Optimism Lift Shares) or TJWOS (Trade
Jitters Weigh On Stocks).

Overall, November hasn't been particularly spectacular with a rise of about 3%. As you can
seen below, January, February, April, June and September came up with superior gains:

In terms of sectors, it was a very bad month for defensives with utilities and telecoms set
to be the only ones to finish the month in negative territory. (left is utilities, right
telecoms).

The main winners are logically at the other end of the spectrum with Tech,
Industrials, Basic Ressources scoring 5% or so wins.

One index stands out and that's the FTSE 250 which rose about 5% as investors rush back on
British domestic shares.

Very simply, there's hope a Tory victory on Dec 12 will boost an asset class that many
investors snubbed since the Brexit referendum.

We used that chart a few times on the blog but in case you didn't see it before, here's how
the FTSE 250 seem to track the probability of Boris Johnson and the Conservative party winning
the general election:

November 2019 was also a horrible month for bitcoin, actually the worst in a year with a 17%
fall.

In a nutshell, investors got drawn in October when Beijing made positive comments on
blockchain technology but got hit this week when the country's central bank launched a fresh
crackdown on cryptocurrencies. Read about it here:

Finally, November 2019 gave us this tweet from the president of the United States:

(Julien Ponthus)

*****

OPENING SNAPSHOT: BLACK FRIDAY INDEED (0821 GMT)

Talking about Black Friday, there are many theories behind why it is called so. One is that
the day after Thanksgiving is seen as the point in the year when retailers go from being "in the
red" to being "in the black".

The reason why we picked that theory is Ocado's 12% jump this morning. The British
online grocer is in a different league, rising 13%, while the rest of the market is drowning in
a sea of red.

Ocado is boosted by it's tech partnership agreement with Japan's biggest supermarket
operator Aeon Co and a gateway to Asia, one of the fastest growing markets for
e-commerce.

There are no other notable moves in Europe, but the pan-European STOXX 600 is down
0.5% in broad sell-off in almost all the sectors.

Trade sensitive sectors autos and mining are top fallers.

(Thyagaraju Adinarayan)

*****

TRADE WOES KEEP STOCKS UNDER PRESSURE; OCADO SHINES (0748 GMT)

European stocks are seen falling 0.3% as the latest clash between Washington and Beijing
over Hong Kong casts pall over trade truce between the world's top two economies.

In the corporate world, Ocado is called up 5% by traders after the British online
grocer signed an agreement with Japan's Aeon Co to help the supermarket operator expand
in e-commerce.

AIM-listed vehicle rental services firm Redde is seen rising 25% after rival
Northgate in an all-share deal.

Shares of Norwegian bank DNB could be under pressure on news that police are
probing if any laws were broken in its handling of payments from an Icelandic fisheries firm to
Namibia. The investigation follows a report that Icelandic fisheries group Samherji had made
illicit payments worth millions of dollars to secure fishing quotas in Namibia.

Key headlines:

Japan's Aeon turns to Ocado to expand online grocery service

France's PSA to sell stake in smaller Chinese tie-up as sales slide

Hedge funds control 35-45% of Osram shares in headache for suitor AMS -source

Northgate to take over Redde, plans new vehicle renting firm

(Thyagaraju Adinarayan)

*****

MARKETS IN WAIT-AND-SEE MODE (0638 GMT)

European stocks are heading for another subdued session with moves that are unlikely to hurt
the chances of a monthly and weekly gain for the pan-European STOXX 600 index.

Financial spreadbetters IG expect London's FTSE to open 21 points lower at 7,396,
Frankfurt's DAX to open 29 points lower at 13,216 and Paris' CAC to open 8 points lower at
5,905.

U.S.-China trade truce hopes and a Conservative majority in UK election with econominc
conditions just about stabilising have driven stocks higher this month. STOXX 600 has risen 3.1%
so far this month.

But in the last two days, investors have been in wait-and-see mode with Washington's Hong
Kong bill injecting fresh uncertainty in the sigining of 'phase one' trade deal with China.?

(Thyagaraju Adinarayan)

*****

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

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