Cobham Share News (COB)

* European shares rise slightly
* Focus on Federal Reserve policy decision
* UBS downgrades luxury sector to neutral
* Logistics stocks fall after FedEx warning
* Wall Street ticks lower

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:
rm://thyagaraju.adinarayan.thomsonreuters.com@reuters.net

CLOSING SNAPSHOT: HOLD ON TIGHT (1622 GMT)
European stocks managed to eke out small gains on Wednesday as investors
readied for the Federal Reserve to cut rates by 25 basis points, but with the
U.S. economy chugging along at a pretty decent rate the accompanying update
might not be as dovish as many have hoped for.
"Some dealers are expecting the Fed to lay the ground work for a series of
rate (cuts), but keep in mind the jobs market is robust, plus wages are
impressive, so a very dovish update is not a done deal," says David Madden,
market analyst at CMC Markets UK.
The pan European STOXX 600 ended the day up 0.2%.

(Josephine Mason)
*****


SPAIN: GETTING HARDER TO RECOVER (1609 GMT)
Spanish assets showed muted reaction to Madrid politicians failing to form a
government.
But with the country heading towards its fourth election in four years, it
may be harder for its top stock index to keep up with its regional peers even as
the euro zone's fourth largest economy remains in relatively good shape.
The key reason to be downbeat about the IBEX, which is up only 5.8%
so far this year against a more than 16% gain for the pan European STOXX 600
index, is that the new vote due on Nov. 10 is unlikely to magically
resolve the political stalemate.
"The election result is likely to depend on voter turnover amid widespread
political disenchantment. It is unlikely to lead to a strong, stable government
able or willing to undertake major structural reforms," says Roberto Ruiz, chief
investment officer for Spain at UBS.
"Protracted political uncertainty is likely to impede spread tightening for
the Spanish sovereign and prevent the IBEX from reversing its recent
underperformance versus Eurozone equities overall," he adds.

Natixis economist Jesus Castillo also sees more clouds ahead for Spain.
"It will be the second year in a row that the previous budget is extended.
Yet, the country needs to introduce new reforms. In addition, Spain is going to
face a possible no-deal Brexit with an interim government," he says.
"Finally, the deterioration in the global environment with international
risks rising (trades war, China and U.S. slowdown, oil outages) is going to
become more challenging and they will request effective political answers," he
says.
(Danilo Masoni)
*****


WILL EUROPE GO DUTCH? (1420 GMT)
With the ECB running out of ammunition, stock investors are increasingly
looking at what governments could do to prop up the economy and bring Europe Inc
out of an earnings recession.
The debate took a new twist after the Dutch government announced plans for
more spending in 2020 after two decades of fiscal rigidity, raising the question
of whether Europe or Germany could follow its example.
"What's more striking is that the Netherlands is one of the most fiscally
conservative members of the Eurozone. So this could well put more pressure on
Germany. Certainly one to watch," said Deutsche Bank strategist Jim Reid.
Many however appear to think that any big fiscal boost out of Europe is
unlikely for now.
Among them is Brooks Macdonald.
"We remain sceptical that coordinated fiscal stimulus will come from Europe
until the economic situation deteriorates further however the shift towards
increased government spending has also increased prospects for growth," said
Edward Park, deputy CIO at the UK investment manager.
That scepticism would explain why despite its value bias, European stocks
have not outperformed Wall Street during this month's sudden revival of value
stocks.
And Rabobank strategists rightly point out that the Netherlands "are just a
drop in the ocean" and then they add: "the need for fiscal stimulus is actually
the biggest in those countries that tend to have the least fiscal space. As
such, European coordination may prove essential if this is to become a real
success story".

For more on fiscal stimulus check out our previous posts:
Fiscal stimulus in Germany: how likely, how big?
"Large-scale fiscal expansion in euro area looks unlikely"
Euro zone eyes biggest fiscal easing in a decade
Fiscal fizz in Germany?

(Danilo Masoni)
*****


VALUE PLAY OR VALUE TRAP? (1138 GMT)
That's been the trillion dollar question in the last few weeks among
investors, strategists, sell-side and buy-side as we saw glimpses of some sharp
rotation in value/growth play.
State Street multi-asset strategists, who visited the Reuters London office
today, say they've faced similar questions from their clients.
"Last couple of weeks everybody has been asking if the great rotation is
here, back to value, value stocks doing very well," Marija Veitmane, senior
multi-asset strategist at State Street says.
In stark contrast to sell-side research from Bank of America Merrill Lynch
and JPMorgan, Veitmane says in a world of low interest rates, low growth there
is hardly any scope for the rotation to sustain for a longer period.
And, that's already evident with the rotation in Europe taking a back seat
in the last couple of sessions ahead of Fed as jittery investors position
themselves in defensive sectors.
Veitmane's colleague Benjamin Jones says the move was mostly due to bond
yields rising a bit and he thinks the rotation won't last long unless, bund
yields are back into positive territory and Treasuries move to 4% or 5%.
So when we asked them who's been buying into this?
They believe its a bit of short covering in value and a bit of profit taking
in growth amid small signs of retracement in bond yields.

Other highlights from the State Street meeting:
* U.S. equities by far their favourite equity markets, marginally positive
on
China
* Overweight on large UK equities purely on a view that Sterling weakness
will
help
* Prospect of a no-deal Brexit underappreciated


(Thyagaraju Adinarayan and Josephine Mason)
*****

WHY VALUE IS WORTH IT (0909 GMT)
Debate over whether rotation into neglected and inexpensive value stocks
continues and while long-term investors appear to be reluctant to join the
trade, another big bank - Barclays - has joined the club of those saying the
move has further to run.
"Taking a stance against Value has worked well for a while, but we think the
recent reversal could have legs, irrespective of market conditions. Crowded
positioning and stretched valuations make Growth vulnerable to either a
broadening of the macro slowdown, or a revival of the reflation trade," Barclays
says.
Strategists at the UK bank led by Emmanuel Cau see a double benefit from
being exposed to Value and see it as a win-win trade.
1) Value might be less vulnerable to bad news than Growth: "The common
wisdom is that the space will work as a recessionary hedge, but we disagree. On
the contrary, our view is that crowded positioning, extreme valuations and
earnings cyclicality make Growth stocks more vulnerable to a downturn than
Value"
2) Value also offers a cheap hedge against a revival of the reflation trade:
The latest Value bounce is no more than a mere reversal of the August risk-off,
but if the recovery trade were to gather speed, it could feed further style
rotation".

(Danilo Masoni)
*****

OPENING SNAPSHOT: FEDEX RIVALS SLIDE; INVESTORS AWAIT FED (0730 GMT)
Another subdued session in Europe with no major sectoral moves as investors
await Fed interest rate decision before making any major bets on risky assets.
Luxury is the only sector that's making some noise today after Swiss bank
UBS downgraded the sector to "neutral" from "overweight", saying
the sector is in overbought territory. Moncler (-3.3%) CEO's cautious
comments citing Hong Kong unrest is adding to weakness.
As expected logistics firms Deutsche Post, DSV, Kuehne &
Nagel, Royal Mail and PostNL are all sliding between
0.5% to 1% on FedEx's profit warnings overnight.
Apple component suppliers AMS, STMicro and
Infineon rise on strong pre-orders for the latest iteration of
iPhone.
In single stock moves, EDF is seeing a bit of a relief rally (+2%)
after the French utility company says there is no need to close any of its
nuclear reactors over welding problems, which roiled the stock last week.

Here's a snapshot on sectoral moves:



(Thyagaraju Adinarayan)
*****


ON OUR RADAR: FEDEX RIVALS, APPLE SUPPLIERS, LUXURY (0656 GMT)
Stock futures point to a flat to slightly weaker open for Europe as
investors head for the sidelines ahead of the Fed's interest rate decision later
today.
In corporate news, FedEx's profit warning overnight citing trade war
is likely to cast shadow on European logistics companies. The U.S. package
delivery firm's shares tumbled 10% in extended trading.
DHL owner and European rival Deutsche Post is sliding 3.2% in
early Frankfurt trade. DSV, Kuehne & Nagel, Royal Mail
, PostNL and other European mail delivery firms are also
expected to come under pressure on FedEx warning.
Apple component suppliers could rally following their Asian peers
on strong pre-orders for the latest iteration of iPhone, traders say. AMS
, STMicro, Infineon and Dialog Semi are
some names to watch out for.
Luxury stocks, mainly Swatch and Richemont are expected to
slide after a bearish note by UBS, according to traders. Moncler is
seen sliding 2% after CEO says he is cautious on FY sales due to Hong Kong
unrest.
Italian toll road operator Atlantia in focus yet again after its
CEO resigned as the company moves to deal with the fallout from a deadly bridge
collapse last year.
In the UK, Cobham shares are seen opening 3%-5% lower as the UK
CMA's intervention in Advent’s merger proposal raises worries of possible
rejection. Traders call B&Q owner Kingfisher shares -2% after weak sales
and cautious outlook.

Other key headlines:
MEDIA-Lloyds-Schroders wealth management venture to launch price war - FT

Diageo averts strike with unions over pay at Scottish distilleries

Roche bid to recycle Gayzva for lupus nephritis wins FDA breakthrough tag

Atlantia CEO resigns in Benetton-led shake up
UK's BAE Systems wins $318 mln contract from U.S. Army
Britain orders security investigation into Cobham-Advent deal
Kingfisher profit falls 6.4% on weak French performance
Pendragon Flags Brexit Uncertainty



(Thyagaraju Adinarayan)
*****

CALM BEFORE FED (0540 GMT)
European stocks are seen opening slightly lower as jittery investors brace
for Fed meeting later today, where the U.S. central bank is widely expected to
cut rates by 25 bps.
Volatile oil prices, ongoing U.S.-China trade war and upcoming Fed rate
decision have darkened investor mood this week with stocks in defensive sectors
such as utilities, food & beverage and telecom in demand.
"Today's Fed decision is once again likely to be a contentious one, given
the two dissents we saw to the last cut in rates, which saw the US central bank
cut by 25bp at its July meeting," Michael Hewson at CMC Markets UK says.
Financial spreadbetters IG expect London's FTSE to open 12 points lower at
7,309, Frankfurt's DAX to open 2 points lower at 12,370, and Paris' CAC to open
4 points lower at 5,611.

(Thyagaraju Adinarayan)
*****


(Reporting by Danilo Masoni, Josephine Mason and Thyagaraju Adinarayan)