Last checked at 
* U.S. stocks fall in late morning trading
* Real estate leads sector losses; materials lead gainers
* Euro STOXX 600 Index up ~0.3%
* Dollar dips; gold up; crude flat; US 10-Yr Treasury yield
~1.42%
March 2 - Welcome to the home for real-time coverage of
markets brought to you by Reuters reporters. You can share your
thoughts with us at markets.research@thomsonreuters.com
THE CASE FOR OPENING A STORE IN A CHINESE MALL (1051
EST/1551 GMT)
Sounds crazy, right?
Yet, as Mainland China increased dramatically its importance
for the European luxury space last year, Jefferies suggests in a
report that owning shops in malls, airports and outlets may
actually boost opportunities for high-end brands in the country.
Chinese people have always enjoyed shopping luxury abroad
but amid coronavirus fears and restrictions, they have been
keener to purchase European items at home.
As a result, if historically two thirds of Chinese luxury
spend was outside Mainland China, domestic luxury consumption
soared from 14% to 37% of the sector amid the pandemic,
according to Jefferies.
This change doesn't come without implications for 16 luxury
brands Jefferies covers, including Louis Vuitton, Burberry and
Ferragamo.
"In order to support this higher consumption," says
Jefferies, a strong presence in about "25 key cities" in
Mainland China is needed.
Currently, Shanghai and Beijing together account for about
30% of luxury stores in China.
It is worth also noting that unlikely in Europe, main luxury
locations in China are malls and outlet villages, not streets.
Outlets make up for 10% of total stores.
Brands will also need strong e-commerce to support sales in
additional Chinese cities with "new luxury consumers," Jefferies
adds.
The investment bank assessed the top 25 luxury cities and
mapped the store networks of 16 high-end brands to find that:
1) Gucci, Burberry and Louis Vuitton have the widest network
of stores in all 25 key cities
2) Ferragamo has the widest network in terms of number of
stores
"We see some white space opportunity for expansion for the
remaining brands," Jefferies analysts write.
(Joice Alves)
*****
M&A TRENDS: BUYING TECH WITH SHARES LIKE IT'S 2000 (1026
EST/1526 GMT)
Those who nervously look back 20 years ago at the dotcom
bubble might not necessarily like the latest Goldman Sachs note
on M&A trends. Investment bankers, more so!
"As of February 27, more than $470 billion worth of
transactions (deals $1 billion or larger) have been announced by
North American and European acquirers – the strongest start to a
year since 2000", the note wrote.
Just like two decades ago, tech is a very big driver at the
sector level.
Another similarity is that shares are the currency of
choice.
"The share of deals funded entirely with equity (34%) is the
highest since 2003", the GS note also says.
There are plenty of reasons for M&A to continue to thrive
going forward: the economic rebound is gathering pace, borrowing
costs are cheap, there's plenty of private equity dry powder and
of course, the SPAC frenzy which has M&A as it's sole raison
d'être.
Here's the chart from the GS note showing how volumes so far
in 2021 have sprung to that of 2000 and how big the contribution
of tech is:
(Julien Ponthus)
*****
S&P 500 LITTLE CHANGED AFTER MONDAY'S RALLY (1010 EST/1510
GMT)
U.S. stocks were mixed with the S&P 500 nearly flat
in early trading Tuesday after Monday's strong gains.
Investors were watching for news on the next step of
President Joe Biden's stimulus proposal. The U.S. Senate will
start debating the relief bill this week when Democrats aim to
pass the legislation through a maneuver known as
"reconciliation," which would allow the bill to pass with a
simple majority.
Investors have been upbeat about the stimulus and also about
progress on the vaccine front.
Here is the early market snapshot:
(Caroline Valetkevitch)
*****
NASDAQ FUTURES: RETRACEMENT RALLY OR REAL TURN? (0900
EST/1400 GMT)
Assessing whether a market just ended what will prove to
have been just a sharp correction, or if its turn is actually
the early stages of a larger trend change, is no easy feat.
Elliott Wave analysis can potentially aid in
assessing such a turn:
Indeed, CME e-mini Nasdaq 100 futures appear to have
a 5-wave decline from their February 16 high. If so, this
decline can be a larger Wave 1 or A, or the initial stages of
what will prove to be a much deeper sell off.
Adding credence to this count, momentum diverged into the
mid-February peak and once the futures declined, waves 2 and 4
were both near perfect 61.8% Fibonacci retracements of waves 1
and 3 (60.3% and 61.4%). Additionally, the 161.8% projection for
wave 5, down from the wave 4 high, called for a fall to
12,653.97. The futures bottomed at 12,662.25, or around 8 points
above this level.
In the wake of this low, the futures have now bounced 666
points to a high of 13,353.75, while retracing around 54% of the
entire 1238.25 point slide from the high.
The February 25 (wave 4) high, at 13,353.75 presents a
hurdle. Additional Fibonacci retracement barriers reside at
13,427.49 and 13,608.27/13,635.51. In the event of further rally
on increasing momentum, as each of these barriers were to give
way, it can tilt the futures more toward the view that a
near-10% correction ended last Friday, and new highs are ahead.
That said, reversing back below the rising 50-day moving
average, now around 13,155, and last Friday's high, at
13,089.50, can suggest a larger Wave 2 or B may be complete. In
that event, potential may increase for new lows as a larger Wave
3 or C down unfolds.
(Terence Gabriel)
*****
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(Terence Gabriel and Lance Tupper are Reuters market analysts.
The views expressed are their own)
