Hammerson Share News (HMSO)

* Dow, S&P modestly red; Nasdaq positive
* Industrials weakest major S&P sector; tech leads gainers
* STOXX 600 down 1%
* Dollar down; gold, crude up; U.S. 10-yr yield ~0.78%

Oct 27 - 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

A PERFECT STORM ON UK RETAIL REAL ESTATE (1630 GMT)
Coronavirus has made even harder the already difficult
environment for European retail landlords' credit quality.
Weaker demand for retail spaces, low rent and high vacancy
will push down the value of retail assets by 15%-20% in
continental Europe by the end of next year, compared with values
seen in June 2020, writes Moody's.
Things seem even tougher for UK landlords as they "face a
combination of credit negative challenges" with the rating
agency saying assets' value could fall as much as 30%.
A boost in online sales growth, bigger costs for tenants and
more use of company voluntary arrangements to reduce rents will
act as a perfect storm in the UK retail real estate business.
In the meantime, the UK government has extended to the end
of 2020 a moratorium on evicting commercial real estate tenants.
"This acts as a disincentive for retailers to pay their
rent, knowing they will not be evicted if they fail to pay,"
Moody's says.
As a result, the performance of companies with high exposure
to the UK, such as Hammerson and intu Properties will remain
weak, Moody's adds.
There might be some light at the end of the tunnel though.
"A shift to more flexible leases... will depress rents and
asset values in the short term. However it could lead to a
more collaborative approach between tenants and landlords over
the longer term, leading to more sustainable rents and a return
of investor confidence".

(Joice Alves)
*****


CONSUMER CONFIDENCE, DURABLE GOODS, HOME PRICES: TWO OUT OF
THREE AIN'T BAD (1125 EDT/1525 GMT)
Data released on Tuesday showed orders for long-lasting
goods and home prices both surprised to the upside, but the U.S.
consumer, who contributes about 70% to the economy, sees cloudy
weather in the forecast.
The mood of the U.S. consumer unexpectedly soured this
month, according to the Conference Board's Consumer Confidence
index.
The index posted a reading of 100.9, edging down from
September's 101.3. Analysts expected a slight increase to 102.
While optimism about current conditions saw an increase, the
expectations subcomponent fell, reversing an inversion that
typically predicates prolonged bull markets and economic
expansion.
In short, while American consumers feel better about where
they are now, they think things are going to get worse.
"It's tempting to blame (sliding expectations) on the drop
in stocks in the first three weeks of September, but other
factors, including the rising trend in Covid infections and the
impact of the end of enhanced unemployment benefits, likely
played a role too," writes Ian Shepherdson, chief economist at
Pantheon Macroeconomics. "Overall, the headline index remains
about 30 points below its pre-Covid level."

In a separate report, new orders for U.S.-made durable goods
rose 1.9% in September, nearly quadruple the 0.5%
increase projected by economists.
Jumps in transportation equipment and non-defense goods
drove the surprise, increasing 4.1% and 3.4%, respectively.
Orders for core capital goods, which excludes
defense equipment and aircraft and is widely considered a
barometer of U.S. business spending plans, rose by 1% double the
expected pace.
But the recent spikes in COVID-19 cases, combined with
elusive fiscal relief from Washington, could prove to be a
headwind.
"The recovery is now entering a more challenging phase, in
which it will face the pandemic crisis without meaningful fiscal
support," says Oren Klachkin, lead U.S. economist at Oxford
Economics. "Highly elevated uncertainty, weak demand, lingering
supply chain disruptions, subdued corporate profitability, and
low oil prices will constrain capital expenditure growth to only
a modest pace going forward."


Finally, U.S. home prices grew at 5.2% annual rate in
August, according to the Case-Shiller 20-city composite
. Analysts expected a 4.2% increase.
Housing prices have been boosted by the perfect storm of
tight supply and spiking demand as homebuyers seek lower
population density and home office space amid the new
socially-distanced normal.
"Overall, home prices continue to accelerate in response to
strong demand and low inventories," says Rubeela Farooqi, chief
U.S. economist at High Frequency Economics. "This trend will
likely continue for now."
Phoenix once again took the top prize, increasing by 9.9%
from last year, with Chicago's more modest 1.2% growth taking up
the rear.

Stocks were mixed in morning trading, with cyclicals
weighing on the Dow and S&P 500, while tech shares boosted the
Nasdaq into the black.
(Stephen Culp)
*****

CATERPILLAR WEIGHS ON DOW, S&P BUT TECHNICAL SETUP IS
POSITIVE (1038 EDT/1438 GMT)
Caterpillar shares are down more than 3% on Tuesday,
weighing heavily on the price-weighted Dow Industrials
and providing a significant drag to the S&P 500 in the
wake of its quarterly results.
But Matt Maley, chief market strategist at Miller Tabak,
says he still likes the stock on technical basis as it has been
lagging well behind Deere in recent months, which have
normally been strongly correlated over the years.
While the two have diverged from one another around every 18
months or so, the divergence "always resolves itself before too
long," said Maley. As Deere has moved well ahead of Caterpillar,
Maley believes the latter should play catch up and that a long
Caterpillar/short Deere trade would work well.




While Maley believes this is still likely to be the case as
Caterpillar's fundamental outlook remains in good shape, he
notes the stock had become quote overbought of late, testing its
early 2018 highs. As such, it is unlikely to break through that
level on the first try, but if it does manage to punch through
after working off its current overbought condition, it will be a
very bullish sign.
Maley does caution that there could also be a "double-top"
forming and signaling a major decline in Caterpillar going
forward, but if a pullback is shallow, it will mark another
"higher low" for the stock. Should that scenario occur and the
stock breaches its 2018 highs, "it is doing to be wildly
bullish" for Caterpillar shares.

(Chuck Mikolajczak)
*****


S&P 500: TO ATTEMPT A QUICK MEND (0905 EDT/1305 GMT)
U.S. equity index futures are pointing to a small rebound at
Tuesday's open. This after the S&P 500 closed back below
its 50-day moving average on Monday for the first time since
October 6. (Click on chart below)
Of note, both the S&P, and the Dow Industrials ended
Monday's session back below this closely watched
intermediate-term moving average.
The Nasdaq Composite, however, was able to recover
sufficiently off Monday's intraday low, to end above its 50-DMA
at the close. The NYSE Composite accomplished a similar
feat, while the small-cap Russell 2000 maintained
breathing room.
In any event, based on a gain of around 5-10 points in
e-mini S&P futures, the SPX can attempt to repair its
50-DMA break in early trade. The 50-DMA ended Monday at
3,408.43.
That said, of concern, SPX daily momentum has been waning.
Indeed, in a bearish signal, the MACD has broken below its
signal line.
Thus, the S&P 500 may need to quickly reclaim both its
50-DMA and Friday's high, at 3,466.46, or else downside pressure
may soon intensify.
The rising 100-DMA, which ended Monday at 3,303.70, and
which supported the SPX in late-September, can then be a magnet.
This is followed by the late-September trough (3,209.45), and
rising 200-DMA, which ended Monday at 3,129.15.


(Terence Gabriel)
*****


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(Terence Gabriel is a Reuters market analyst. The views
expressed are his own)