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* Choppy session * Lufthansa falls as higher fuel costs bite profits * BNP Paribas down on weaker revenues * Strong BP profits boost oil & gas sector Oct 30 - Welcome to the home for real-time coverage of European equity markets brought toyou by Reuters stocks reporters and anchored today by Helen Reid. Reach her on Messenger toshare your thoughts on market moves: helen.reid.thomsonreuters.com@reuters.net END OF CYCLE BLUES: SELL 'EM CHEAP, BUY 'EM EXPENSIVE (1424 GMT) "The old adage is to sell cyclicals when they are cheap and buy them when they areexpensive. In this instance, the mining stocks have rarely been cheaper". Guess there isn't much to add to this quote from a Liberum note, which pretty much sums upthe grim outlook for the mining sector. "We believe it is the end of the cycle and commodities have further to fall in 2019 asChinese housing rolls over," the analysts write, adding that they do not see "a violentdown-cycle" but rather a downside limited to 20-30 percent. Long-term prices for iron ore in particular are too high, they say. In Europe, basic materials are among the few sectors, with banks or autos, which are firmlyin bear territory: (Julien Ponthus) ***** EARNINGS GOING UNREWARDED (1306 GMT) Recent equity market weakness doesn't reflect earnings, argue Blackrock's InvestmentInstitute strategists. Indeed as you can see below, for global developed stocks earnings expectations have beenrising even as performance has been sliding. Market participants are more focused on how sustainable earnings growth is than on thethird-quarter reports which have so far been relatively good. Today for example saw an early boost to indices thanks to strong results from BP andVolkswagen, but the enthusiasm quickly evaporated. So Blackrock's strategy team attributes the recent falls more to "the uncertaintysurrounding the sustainability of strong earnings in 2019 and beyond, amid rising concern abouttrade conflicts and their impact on global supply chains." In this context they back "quality" companies - with strong balance sheets and earningsprospects - as a protection against the general angst. (Helen Reid) ***** THE DIFFERENCE BETWEEN BNP PARIBAS AND EZ BANKS? (1230 GMT) Absolutely none: zero, zilch, zip, nada. Both the French bank and the euro-zone banking sector are down exactly 26 percent since thebeginning of the year and down roughly 30 percent from a year a ago. A drop in revenues at BNP Paribas' investment bank and ongoing weakness in retail in thethird quarter are unlikely to change the trend. "These results won’t help a re-rating story, although seasonally weak revenues in Q3 are nota game changer," was how a trader described this morning's new batch of earnings. With a dividend yield of 6.3 percent, Paris-based BNP Paribas is more than ever a temptingvalue play, but its track record as a value trap for the last years speaks for itself. One of the main drags obviously for euro zone banks is that monetary normalisation remainselusive and today's EZ GDP data, alongside the Italian budget crisis, offer little hope for animminent change. "Even though one-off factors will have dampened growth, the coming quarters do not seem setfor a swift bounce back," ING economists wrote, not quite an environment suitable for a ratehike. Not quite an environment for cyclical shares either: analysts have cut their 12-monthforward earnings growth expectations to the lowest since Oct 2016, IBES Refinitiv data shows. Some reading: Mood sours as euro zone economic growth slows while Italy stagnates Banks "remain a long-term value trap" Investment banking weakness clouds BNP Paribas' results Value trap illustration: trapped killer whales (https://reut.rs/2Sudu7H) (Julien Ponthus) ***** HOW TO PLAY A BREXIT DEAL - NOT THROUGH THE FTSE 100! (1125 GMT) Everyone's scrambling to find the best way to play Brexit - whether it's seeking protectionagainst a potential no-deal, or sniffing out opportunities. SocGen offers many possible plays - but says the FTSE 100 isn't one of them as it is toovulnerable to a rising sterling. "We find that after excluding commodity-linked stocks and financials, UK earnings havestrongly improved since the Brexit referendum on the back of a weaker GBP," note SocieteGenerale analysts. "Nonetheless, with a trailing P/E of 27x (vs 15x for the rest of the world), UK equities arenot very attractive ... and a soft Brexit triggering a higher GBP could put earnings underpressure." More targeted plays could be a better bet. SocGen's banks team highlights that UK domesticbanks are pricing in a bad Brexit outcome, and "would likely rally strongly" if economicoptimism improves. SocGeb also picks 20 stocks across Europe that are likely to gain from a stronger sterling -listed below, these include AkzoNobel, easyJet, as well as Porsche, BMW, Volkswagen, Ferrari,and Daimler, as the UK is the second-largest premium car market in Europe after Germany. As you can see below, the correlation between FTSE 100 and sterling has crawled back intothe negative recently. On days like today - when sterling is lower - the FTSE is rising. Analysts say that negative correlation is usually tested when the Bank of England is raisingrates and inflation is rising. (Helen Reid) ***** SAVE THE ECONOMY! CRASH THE MARKET! (1038 GMT) Trump has made pretty clear his fear that the Fed might rock the boat and go Buffalo Bill onthe bulls by aggressively raising interest rates. The President has already called the Fed "crazy," "loco," "ridiculous," and "too cute,"while saying its rate increases are "too aggressive," and "a big mistake". But what if it was the other way around? What if a market crash is just what the doctor ordered to avoid a recession and keep theeconomy expanding in the United States? "It seems like an odd, counterintuitive question but the truth is that a sharp pullback inequities might be exactly what is needed to keep the Federal Reserve from inadvertentlythrottling the economic expansion with one rate hike too many," writes Erik Norland a senioreconomist at CME Group. Norland makes the point that recessions were avoided in 1987-88, 1998-99 because the Fedreacted to sell-offs by easing monetary policy. "After the correction in the summer of 2011, then Fed Chair Janet Yellen ramped up the thirdphase of quantitative easing," he recalls. So the question is, would the Fed chair be ready to implement a "Powell put" in the sameway the "Greenspan put" saved the day for equity investors? "Backing off rate increases becomes harder when one is trying to maintain the appearance ofindependence in the face of public criticism from Administration officials," Nordland howevernotes. See: Trump calls 'loco' Federal Reserve 'too aggressive' (Julien Ponthus) ***** OPENING SNAPSHOT: EARNINGS DOMINATE, STOXX 600 SEEKS FLOOR (0819 GMT) European shares are off to steady start today with STOXX 600 inching up 0.3 percentbut staying below yesterday's peak, suggesting that equity markets are still looking for a floorafter this month's ugly sell-off sent them near two-year lows. The focus today is on corporate updates with earnings driving the big price changes. In thesnapshot, you can see the top movers on the STOXX 600. Qiagen raised its 2018 earnings target, sending its shares up more than 9 percent,while Jyske Bank and Geberit are being hit hard following disappointing tradingupdates. Among the top movers are also Reckitt (down 4.6 percent), Lufthansa (down 5percent) and Volkswagen (up 4.7 percent), BP (up 3.7 percent) and BNP Paribas(down 3.4 percent) following their earnings updates. (Danilo Masoni) ***** WHAT'S ON THE RADAR: "GREAT DEAL" COMMENTS SOOTHE INVESTORS, EARNINGS FLOW IN (0734 GMT) European stocks are set to rise for a second day, with futures up 0.4 to 0.8 percent acrosseuro zone benchmarks, while FTSE 100 futures were down 0.1 percent. A report the U.S. intends to impose tariffs on all Chinese imports in December failingprogress in talks between Trump and Xi Jinping weighed on stocks in the U.S. and Asia, butTrump’s claim he expects a “great deal” with China, in a Fox News interview, helped riskappetite improve. Results from BNP Paribas would do nothing to quell investors’ concerns about European banks.France’s largest listed bank said weakness at its corporate and investment banking arm and atEuropean retail banks drove revenue down – a 5 percent miss against expectations, analysts said. Spain’s BBVA reported in-line results thanks to extraordinary capital gains in Chileoffsetting a loss of 190 million euros due to hyperinflation in China. UK gambling stocks Paddy Power Betfair and GVC could gain after the UK finance ministerannounced a lower remote gaming duty tax than expected, according to Credit Suisse and DavyResearch analysts. Some of the now-familiar themes of this earnings season – rising costs and concerns aboutconstruction - were evidenced once again. Swiss plumbing firm Geberit lowered its sales outlook, flagging extra caution about thebuilding industry. German airline Lufthansa blamed higher fuel costs for its Q3 profit miss –the latest in the airline sector to do so. On the other side of the scale, BP profits hit a five-year high as the oil major benefitedfrom higher crude prices. In the autos sector – which soared up as much as 4.8 percent on Monday on a report China wasmulling halving its car purchase tax, but closed 2.9 percent higher as some enthusiasm faded –Volkswagen became the latest to report weaker vehicle sales and more stringent anti-pollutionrules dented its profit. VW Q3 adj operating profit drops 18.6 pct as anti-pollution rules bite; Energy firm BP profits soar to five-year high; Reckitt Benckiser sales hurt by manufacturing disruption Britain's Restaurant Group buys Asian-food chain Wagamama (Helen Reid) ***** EARNINGS ROUND-UP: RISING COSTS A RECURRING THEME (0646 GMT) Recurring themes in the results so far this morning, with Lufthansa warning of higher fuelcosts and plumbing company Geberit giving a cautious outlook for the building sector. Banks may shine again after HSBC's surprisingly strong results yesterday, with BNP Paribasand BBVA reporting increases in profit. BP will publish results later. Here's what to watch in earnings: Spain's BBVA posts 46.4 pct rise in Q3 net profit due to one-offs BNP Paribas' Q3 profits rise, helped by growth at international businesses Lufthansa misses Q3 profit expectations as fuel costs weigh Geberit more cautious about building industry, lowers sales outlook UK airlines hit out at higher levy on long-haul flights UK government plans to sell remaining RBS stake by 2024 Airbus 2018 delivery goal questioned by analysts ahead of results Deutsche Boerse Q3 net profit up 10 percent; confirms 2018 forecasts Telecom Italia warms to I Squared bid for Persidera stake - sources Telefonica Deutschland slightly ups profit guidance after steady Q3 Fresenius says working to fix performance at dialysis business, German hospitals Fresenius Medical Care says expects weaker growth in Q4 Airbus 2018 delivery goal questioned by analysts ahead of results (Helen Reid) ***** EUROPE TO OPEN LOWER AS TRADE WAR HEATS UP AGAIN (0629 GMT) European stocks are set to slip at the open after the U.S.-China trade war ramped up againfollowing a Bloomberg report that the U.S. is preparing to announce tariffs on all remainingChinese imports by early December if talks next month between Donald Trump and Xi Jinping fail. Asia shares recouped early losses and crept higher on Tuesday as China made a fresh attemptto stabilise its stock markets, but the gains looked fragile amid fears of a sharp escalation inthe U.S.-China trade war. In another development in the trade war which is being fought not only over goods but alsointellectual property (IP), President Donald Trump's administration took action on Monday to cutoff a Chinese state-backed chipmaker from U.S. suppliers amid allegations the firm stole IP fromU.S. semiconductor company Micron Technology Inc. Plenty to look out for in the UK as well this morning with most of the market-movingpolicies from Hammond's budget speech announced after the close. A "digital services tax", which has been dubbed a "Google" tax, targets the revenue onlineplatforms make in the UK and hit Boohoo and Asos shares yesterday. Airlines could be hurt after the government announced Air Passenger Duty would be frozen forshort-haul flights but would rise in line with inflation for long-haul. And gambling companies could be bruised by an increase in the "Remote Gaming Duty" - taxespaid by offshore gambling companies. Spreadbetters IG see the FTSE opening 16 points lower at 7,011, Frankfurt's DAX opening 4points lower at 11,332 and Paris' CAC to open 5 points higher at 4,994. (Helen Reid) ***** (Reporting by Helen Reid, Danilo Masoni, Julien Ponthus)