Aston Martin Lagonda Share News (AML)

Welcome to the home for real-time coverage of European equity markets brought to you by Reuters
stocks reporters. You can share your thoughts Joice Alves (joice.alves@thomsonreuters.com) and
Julien Ponthus (julien.ponthus@thomsonreuters.com) in London and Stefano Rebaudo
(stefano.rebaudo@thomsonreuters.com) in Milan.

ECB STATEMENT PAINTED RED! (1206 GMT)

The 'wise owl' sure took the market by surprise, in a good way, and the ECB statement looks
very different from what it was last time.

As you can see below, there were indeed significant changes, as you can see in red below:

(Ritvik Carvalho with Julien Ponthus)

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EZ STOCKS JUMP AS THE WISE OWL BEEFS UP COVID QE (1200 GMT)

Euro zone stocks jumped immediately after the ECB announced it had decided to beef up its
pandemic QE programne by another 600 billion euros, further than the 500 billion which had been
broadly expected.

The euro, the euro Stoxx index and euro zone banks all jumped forward into positive
territory.

Euro zone banks, which among the big losers of the session, dipping about 1.4% about
15 minutes prior to the announcement are now up 0.9%!

Many analysts were warnings clients that there was room for disappointment today but
Lagarde, aka the wise owl, delivered.

(Julien Ponthus)

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STILL MIXED VIEWS ON SOUTHERN EUROPEAN BANKS (1035 GMT)

It could be the time for periphery bank stocks to get back on their feet after being
battered for months as Italy and Spain were among the hardest hit by the coronavirus pandemic in
addition they have high public debts burden, but some analysts are still cautious.

With COVID-19 infection rates down and banks benefiting from a strong response by
governments and the ECB, "the narrative for Spanish domestics" got better, UBS says, after
upgrading estimates. But it sees visible upside for banks "only emerging if we normalise cost of
risk already in 2021 estimates."

UBS cites the usual reasons for a lack of outperformance of bank shares in Spain: doubts
about the magnitude of credit losses, depressed returns and potential sovereign strain.

On the other hand, Morgan Stanley argues, in a recent research note, the EU recovery fund
coupled with ECB measures to keep yield spreads under control would support share prices in
Europe's periphery also by easing worries about a possible euro crisis.

The investment bank forecasts Italy's BTP yield spread narrowing to 125 basis points by year
end, adding this "would be consistent with an about 10% re-rating", in European stocks.

Banks and insurers are 'overweight', while relative valuations of peripheral equities are at
their all-time lows and have decoupled from bond spreads.

Below Ibex 35 banks index

(Stefano Rebaudo)

GROWTH STRATEGY WILL DOMINATE, BUT LOOK AT THE MULTIPLES (0854 GMT)

Growth strategy will probably still be the mantra of investors as central banks and
governments are doing everything they can to soften the pandemic-induced recession, but
multiples reaching record levels could raise some doubts about that.

Today stocks are slightly lower after being supported yesterday by a German fiscal stimulus
package worth 3.8% of GDP, and ahead the ECB policy committee meeting which is expected to
expand its Pandemic emergency purchase program (PEPP) by 500-700 billion euros.

According to a Berenberg equity strategy note, growth has outperformed value since 2009, so
basically since after the global financial crisis, and the Stoxx 600 interquartile P/E range
recently hit record levels not seen since 2000, at the height of the internet bubble.

At the end of the day "growth will continue to play a lead role in the new cycle" but
"returns and valuation spreads suggest investors should raise value exposure or tactically
rebalance their portfolios," the note says.

In Europe Berenberg prefers insurers which, it says, are cheap compared with healthcare and
banks.

(Stefano Rebaudo)

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OPENING SNAPSHOT: OUT OF STEAM (0730 GMT)

European shares retreat ahead of the ECB meeting after the three-day rally of hope.

The pan European index is down 0.4% after touching a nearly 3-month high yesterday.
Auto and auto parts alongside banks are leading the losses. In London, Britain's blue chips
lost 0.2%, on track to its first decline this week.

In terms of single stocks, Hammerson shares ran out of steam and shed 13.4% after a couple
of glorious sessions. Things went a lot better for France's Remy Cointreau with shares jumping
6.6% after the company said it expected a strong recovery in the second half of its fiscal year.

Aston Martin shares lost 10% after company said it plans to shed up to 500 jobs as
it seeks to bring its cost base into line with reduced sports car production levels.

(Joice Alves)

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ON OUR RADAR: COMPANIES GETTING POLITICAL (0645 GMT)

European shares are seen lower this morning as investors wait to hear if the ECB will
provide more stimulus today or if it will hold until July.

Companies are getting political: Hong Kong-listed shares of HSBC and Standard Chartered rose
after the banks backed China's imposition of a national security law on the city. In England,
Nissan's car manufacturing plant in Sunderland, which employs 7,000, is "unsustainable" if there
is a no-deal Brexit, it said.

A regular report by Sweden's financial watchdog said, banks need to maintain their financial
strength and not make payouts to shareholders.

There is a lot about COVID-19 once again: Remy Cointreau expects its current
operating profit to fall by 45-50% in the first half of its 2020/21 fiscal year due to the
pandemic, although it sees a strong recovery in the second half. While Roche received
emergency use authorisation from the U.S. FDA for its Elecsys IL-6 test for COVID-19 patients.
And Wirecard forecasts no damage to business from the pandemic, the FT reported.

And more job cuts: Aston Martin to shed up to 500 jobs and Lookers plans to lay off 1,500
people. Airbus is looking to hold underlying jet output at 40% below pre-pandemic plans
for two years, an approach which adds pressure to jobs.

In the M&A front, LVMH's Arnault mulls ways to renegotiate the deal with Tiffany.

Italy's Mediaset increased its direct stake in German counterpart ProSiebenSat.1
Media to 11.7% from 8.9%

(Joice Alves and Stefano Rebaudo)

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MORNING CALL: MORE FROM ECB? (0645 GMT)

After yesterday's solid show, European stocks are seen slowing down its rally a bit today
with European futures trading lower this morning as investors wait to hear from the ECB.

The central bank is expected to increase debt purchases to support the bloc's weakest
economies.

"The ECB is under the spotlight as never before," says Michael Hewson, chief market analyst
at CMC Markets UK. "And it may feel that with the current measures being implemented by
governments, and some improvements in the data, that waiting to the next meeting might be more
prudent, especially since it needs to convince the German courts its old asset purchase program
was within the rules," he said.

The Dax however is seen getting a boost from a bumper stimulus package agreed yesterday to
speed up Germany's recovery from the pandemic.

Elsewhere in the world, markets are showing that they are confident the worst is behind us.
Asian shares rose to a two-month high as government stimulus expectations are supporting
investor confidence in an economic recovery.

(Joice Alves)

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