Last checked at 
* European shares fall:
* Washington's Hong Kong bill spurs trade tensions again
* Virgin Money rallies on reassuring outlook
* Wall Street closed for Thanksgiving Day holiday
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: WHAT A DIFFERENCE A DAY MAKES?
Well not much to be honest: the STOXX 600 is still at 409
points give or take, this time cruising slightly lower, -0.16%
due to renewed U.S./China tensions.
Still, that's just 6 points off an all-time high and as far
as this week is concerned, it's still pointing to an overall
gain.
One exception to note in this little puddle of red is the
FTSE 250 in positive territory, propped up by growing
expectations of a Conservative victory on Dec 12.
Here's your closing snapshot:
(Julien Ponthus)
*****
BREXIT ELECTION: MARGINS MATTER (1504 GMT)
So far everything seems to be going in favour of UK markets,
especially the domestically-exposed stocks and sterling, with
Conservatives set for their biggest win since 1987. And that's
exactly what markets need to keep up their momentum post
elections.
Referring to the Stock Market Almanac, Jefferies notes that
between 1945 and 2010, the Conservatives and Labour won nine
general elections each. In eight out of the nine years, a
Conservative victory delivered an average 10.8% gain (FT All
Share) one year afterwards. The returns were -5.8% on average
following a Labour victory.
That's history, and an old one.
More recently, in the past seven elections of which three
were snap elections, UK gilts rallied on all seven occasions 3
months afterwards by an average 30.9 bps, while stocks suffered
to put up a good show.
Is it going to be different this time?
Jefferies says: "It is not so much winning that will matter
but the size of the majority – assuming a conservative victory.
The market will place a high premium on the size of the majority
given the impasse over Brexit."
(Thyagaraju Adinarayan)
*****
TRADE WARS: JUST AN EXCUSE? (1445 GMT)
Last month the IMF highlighted once again how trade wars are
to blame for the slowdown in global growth.
And while market action (closely tied to swings in mood
surrounding talks between Beijing and Washington) appears to
corroborate such view, not everyone believes that's totally
true.
Take Patrick Artus, chief economist at French bank Natixis,
who plainly says: "We do not believe the increase in US tariffs
could be the cause of the slowdown in global growth".
His offers two counterarguments:
1. The global decline in demand for a number of products
(cars,
intermediate goods, capital goods) due to environmental
constraints and the transformation of economies into service
economies
2. The decline in Chinese imports, which is not linked to US
tariffs but to the decline in demand for industrial products in
China (cars, capital goods, metals...)
Artus points out that tariffs implemented by Trump ($117
bln) represent only 0.12% of global GDP and 0.6% of global
trade, which he says "is surely insufficient to trigger a
recession".
(Danilo Masoni)
*****
CONSUMERS TO KEEP THE EUROZONE ALIVE (1319 GMT)
It is that time of the year again: predictions season.
As we approach the last month of 2019, economists are busy
writing outlooks for the year ahead. At S&P Global Ratings they
think consumers will likely keep things going in the eurozone,
which might register a 1% growth next year, according to a
research published today.
"The strong labour market, rising wages, and low inflation
will ensure that household consumption remains resilient," says
S&P.
More on 2020 (by S&P):
- Trade tensions and the slowdown in the Chinese and US
economies will continue to weigh on the industrial performance
of the bloc - specially in Germany and Italy
- Low rates to give a boost to property prices
- France and Spain will outperform the eurozone thanks to
their more services-led economies
- ECB is unlikely to end quantitative easing before 2021 or
raise rates before 2022
(Joice Alves)
*****
CURING FOJI (THE FEAR OF JOINING IN) (1120 GMT)
We have to thank Exane strategists Dennis Jose, Jason Hart
and Jeremy Gaudelier for reminding us that FOMO is not the only
acronym in town but there's also FOJI, or the fear of joining
in, which they say seems still to be plaguing investors.
But what's more, they say there are signs the market is
starting to cure itself from FOJI and that a pick up in earnings
could bring more fuel to the strong year-to-date rally.
"We think earnings growth could recover to 7% in 2020. And
importantly, the ingredients for a new mini cycle in equities
might be materialising," they say, noting that PMIs appear to
have troughed and that stocks still look cheap vs. bonds.
"We have spotted nascent signs that investors have started
transitioning to FOMO. This would be supportive", they add.
(Danilo Masoni)
*****
UK VOTE: ASSESSING THE IMPACT ON EU CAPITAL GOODS (0916 GMT)
Should investors worry about the impact of the upcoming Dec.
12 UK election on European capital goods companies?
Probably not too much.
JPMorgan has dune some number crunching and here are its
main findings, based on expectations of a Conservative majority
giving a boost to fiscal spending in 2020.
"We see fiscal easing in the UK having only a limited impact
on our Capital Goods coverage with only ~6% of sector revenues
generated in the UK and therefore we would expect little change
to underlying demand expectations," analysts at the US bank say.
"For our UK Capital Goods coverage, moves in FX would likely
have a bigger impact, though still not really significant," they
add.
JPM sees a move in Sterling to the low $1.30s in the event
of a Conservative win, with a move to $1.35 resulting in an
average ~2% downgrade to its 2020 UK Capital Goods earnings.
(Danilo Masoni)
*****
OPENING SNAPSHOT: TRADE RISKS COME BACK (0838 GMT)
Risk-off: European stocks are off four-year highs this
morning as Washington's Hong Kong bill rattles hopes for a truce
in a 16-month long U.S.-China trade war.
Autos and technology are top sectoral
fallers, down more than 0.5%.
London's FTSE 100 dips 0.5% as Vodafone and
Johnson Matthey go ex-dividend and miners retreat from
recent outperformance.
Among single stocks, Virgin Money has put up a
great show, rising 18%, as a reassuring 2020 outlook offsets
worries about dividend cancellation. Traders had called the
shares sharply lower.
(Thyagaraju Adinarayan)
*****
ON OUR RADAR: REMY, VIRGIN MONEY, TRADE-SENSITIVE SECTORS
(0756 GMT)
Stock futures point to a slightly weak open for European
bourses as Trump go-ahead for the Hong Kong bill dashed hopes of
a trade truce between U.S. and China. Market activity today is
likely to be subdued as the U.S. is closed for Thanksgiving.
In corporate news, Remy Cointreau missed an
already lowered first-half profit expectation and that's seen
pushing the French spirits group's shares 4% lower, according to
traders.
Shares of Clydesdale and Yorkshire Bank owner Virgin Money
is seen falling 2% to 3% after it suspended dividend
and reported below-consensus profits.
Among UK small caps, Vitec, which supplies camera
and lighting equipment, is seen opening down 15% after the
company said unusually severe de-stocking is likely to hit 2019
results. Marine services provider James Fisher is called
3% to 5% down after weak profit outlook.
Dealers expect shares of infrastructure group Atlantia
to take another hit today on chatter that Italy's PD
may back Luigi Di Maio's proposal to revoke motorway concessions
given to the firm.
(Thyagaraju Adinarayan)
*****
No record high for Europe today? (0640 GMT)
European stocks are just a few points away from record high
levels, but today may not be the day to achieve that feat as
Trump's signature on the Hong Kong bill dashed hopes for a trade
truce between the world's top two economies.
"Just when you think 'phase one' is in the bag...President
Trump signed into law legislation that could bring diplomatic
action and economic sanctions against Hong Kong," Chris Bailey,
European strategist for Raymond James, says.
Financial spreadbetters IG expect London's FTSE to open 23
points lower at 7,407, Frankfurt's DAX to open 26 points lower
at 13,261 and Paris' CAC to open 11 points lower at 5,916. U.S.
Thanksgiving break is also expected to keep volumes subdued.
The pan-European STOXX 600 closed at 409.81 points
on Wednesday, five points below its 2015 record high.
(Thyagaraju Adinarayan)
*****
(Reporting by Danilo Masoni, Joice Alves, Julien Ponthus and
Thyagaraju Adinarayan)
