Last checked at 
* European shares extend losses on lockdown fears
* Refinitiv: 1/3 of STOXX 600 reported results, 73% beat expectations
* HSBC shares up 7% on Q3 profit, strategy shift
* U.S. stock futures rebound after sell-off
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
WHICH STOCKS TEND TO DO WELL AFTER U.S. ELECTIONS? (1116 GMT)
What history has to teach when it comes to which stocks could outperform following the U.S.
Presidential election?
Style Analytics looked into how stocks have performed in the seven months following
elections in the U.S. since 1984 and found out that value, small cap and high volatility
outperformed in seven out of nice elections, regardless of which party won.
"One reason we believe that value, small cap and high volatility stocks do well after
elections is that new (or re-elected) Presidents tend to push economic stimulus packages,
resulting in a recovery/growth economy that encourages a risk-on investment approach," the
report says.
Here are the results of the past nine U.S. elections:
(Joice Alves)
*****
KITCHEN SINKING AND POSITION CLOSING (1034 GMT)
With just one week to go before the increasingly unpredictable presidential ballot in the
world's biggest economy and lockdown risks looming large in Europe nothing looks really safe
across the continent's equity space.
German software giant SAP has undergone what amounts to a massive kitchen sinking,
almost killing Europe Inc's recovery narrative, and investors now look to be searching for an
exit, especially from the market's winners, as volatility gauges indicate more turbulence ahead.
And today's price action is quite as telling following yesterday's spectacular debacle.
While the stay at homes are doing well, it's perhaps more interesting that the so-called hated
stocks like banks are in demand at the expense of the strong performers, which have come under
pressure.
"Gives an air of position closing," says a trader in London.
"Sentiment damaged a lot yesterday, anyone who thought they had 'safe' positioning ahead of
next week and held SAP probably now just keen to derisk," he adds, also noting how a lot of
stocks that reported quarterly updates are struggling.
As a result even the mighty DAX index, the best performer among top country
benchmarks in Europe, has joined the club of those trading below the 200 day moving average -- a
line under which the bears usually have the upper hand.
Back to SAP, its shares are showing just a tiny rebound this morning, and markets are
wondering who's going to be the next in line, as earnings expectations get dented for the whole
market with possible repercussions on investment decisions.
"To think that SAP is only going to be one of a small number of companies who cut their
guidance for Q4 and the first half of this year is crazy," says Miller Tabak strategist Matthew
Maley.
"Therefore, as the 'E' part of the 'P/E ratio' falls, it's going to make this already very
expensive stock market an even more expensive one," he adds.
And while there's a return of favour for the unloved stocks(, companies like SAP face a
complex dilemma.
"The problem now is that the business is going to be ex-growth for a couple of years, but
isn't cheap enough to be called value either", says Neil Campling, head of TMT research at
Mirabaud Securities in London.
Here's the DAX falling below its 200 day moving average for the first time in four months.
(Danilo Masoni)
*****
A SAFE BET IN CASE OF TRUMP VICTORY (1022 GMT)
Joe Biden is way ahead of his rival Donald Trump in polls on U.S. elections, but what if the
unthinkable happens?
According to SocGen emerging market strategist, Jason Draw, if you want to bet on Trump
staying in the White House a short of U.S. dollar-ruble offers “attractive risk reward.”
The Russian ruble has recently been one of the weakest currencies in emerging markets while
the Mexican peso and North Asia’s currency bloc some of the strongest as a Biden win has been
priced in by investors.
Under a new president the U.S. administration is expected to be harder on Russia and “take a
more traditional, approach to China,” Draw says in a research note.
Short on ruble against Mexican peso and yuan renminbi might not be the perfect fit as
investors are reducing forecasts of interest rates cuts in Mexico and China’s economy is
expected to remain strong.
“Meanwhile Russian fundamentals are solid and removing geopolitical risk premium suggests,
at the current oil prices, U.S dollar-ruble should trade closer to 72,” he adds.
(Stefano Rebaudo)
*****
EUROPEAN SHARES IN THE RED, BANKS RISE (0835 GMT)
Earnings fail to support the whole European equity market as investors are saddled with
worries about the economic impact of a second wave of coronavirus infections. Not to mention a
threat of a contested outcome of U.S. presidential elections and further delays of a stimulus
package.
The STOXX 600 is down 0.4%, with banking stocks rising 1.1% supported by strong
results from HSBC, up 5%, and Banco Santander, up 3%.
Tech shares show just a modest rebound, up 0.3%, compared to yesterday’s fall
triggered by SAP's weaker than expected results. Capgemini is up 6.1% after
good results and after saying it expects the fourth quarter to show a further but limited
improvement.
Basic material and automaker stocks are the worst performers, down
respectively 1.4% and 1.3%.
(Stefano Rebaudo)
*****
ON THE RADAR: BETTER THAN EXPECTED RESULTS (0745 GMT)
European stocks are poised to open higher after yesterday’s sell-off but pandemic-related
worries continue to weigh.
A batch of good results are on their way while shares in SAP show a modest 2%
rebound in premarket trade after a double digit fall yesterday.
In the tech space there could be a positive read-across for European chip stocks following
results overnight from U.S.-listed NXP Semiconductors.
Novartis reports third-quarter profit of $3.47 billion, down from $3.21 billion a
year ago but better than analysts’ forecast of $3.2 billion.
HSBC Holdings Hong Kong-listed shares rose 5% as the bank says it will embark on a
transformation of its business model, after posting a less-than-expected 35% drop in quarterly
profit.
Santander profit more than trebles in the third quarter to 1.75 billion euros
compared to the same period a year ago when earnings were affected by multimillion one-off
charges in the U.K.
BP swings to a small profit in the third quarter, beating forecasts.
Capgemini reports stronger-than-expected quarterly revenues and says it expects
the fourth quarter to show a further but limited improvement.
Covestro shows a better-than-expected third-quarter profit, citing cost-cutting
measures, improved volumes in Asia-Pacific and demand recovery.
Whitbread reports revenue 99% behind the previous year and says near-term visibility
remains limited.
On the M&A front Tiffany & Co received regulatory approvals needed for the
completion of its $16 billion acquisition by French luxury goods group LVMH after it
received a nod from the European Commission.
easyJet raises $398.6 million from the sale and leaseback of nine aircraft to boost
its finances.
(Stefano Rebaudo)
*****
EUROPE’S STOCK FUTURES IN THE BLACK (0633 GMT)
European stock futures are in positive territory along with their U.S. peers after
yesterday’s selloff, but uncertainty about the pandemic impact on the economy continues to
weigh.
Surging coronavirus cases and fears of a double dip scenario hurt risk sentiment as a
recovery is partially priced in.
Gold’s resilience overnight suggests that safe-haven positioning is increasing, amid slow
progress in negotiations on a U.S. stimulus package and fears of a contested outcome of U.S.
elections.
(Stefano Rebaudo)
