Last checked at 
* European shares down slightly
* ECB expands bond purchases, rates unchanged
* Euro STOXX down 0.1%, FTSE 100 up 0.5%
* Banks, tech and retail lead fallers
* Brexit, U.S. stimulus talks stall
* Nasdaq futures down 0.4%
Dec 10 - 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
"PILES OF CASH TURN INTO HOT MONEY" (1327 GMT)
That is how 2021 will look like as the global economy is
seen rebounding.
"Piles of stacked cash could soon turn into hot money," says
Scotiabank's Hugo Ste-Marie.
"The hunt for yield will likely intensify, and investors
will have to look for alternatives. Equities appear
to be an obvious choice," Ste-Marie says in a report.
He adds that dividend growth will likely resume in 2021
after a catastrophic year.
"Dividend yields have rarely been this attractive versus
government bonds in over half a century. While not a direct
source of income, buybacks are also set to recover, juicing
total yield generated by equities".
The U.S. economy is expected to "exceed expectations" amid
higher consumer spending, an inventory re-stocking cycle, and
Corporate America opening the spending spigots, he says.
(Joice Alves)
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POST ECB STATEMENT, EURO STOCKS WOBBLE, EURO HITS DAY HIGH
(1318 GMT)
There was little market reaction to the ECB statement
through which the central bank announced a meaningful stimulus
package that was broadly in line with expectations.
Needless to say, rates remained unchanged.
Eurozone stocks wobbled in the immediate aftermath
but quickly returned to the point where they were before the
release while - lacking any big dovish surprise - the euro
moved up to its session high at $1.2125.
The Euro STOXX index was last down 0.1% on the day.
Inevitably the focus turns to Lagarde's presser 1330 GMT for
any more market action and clues on future policy decisions.
The ECB increased the size of its PEPP by 500 billion euros
to 1.85 trillion euros and extended the scheme by 9 months to
March 2022. It also extended the period during which banks will
get a rebate rate on cheap loans.
(Danilo Masoni)
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WHAT WOULD AN ECB DOVISH SURPRISE LOOK LIKE? (1027 GMT)
A big degree of easing from the ECB is already priced in and
while that means there could be a sell-the-news reaction to the
event, surprises to the dovish side cannot be ruled out either.
So how would these positive surprises look like?
"The market is expecting a significant package of new
measures... (but) a rate cut or a signal that one is on its way
could be a surprise," says Giuseppe Sersale, strategist and
portfolio manager at Anthilia in Milan.
"Besides the macroeconomic double dip caused by new
lockdowns, the focus could be on the exchange rate. A temporary
acceleration (in the rising euro) is... possible, particularly
if no surprises arise," he adds.
On the same question, ING's scenario analysis comes handy.
A dovish stance would include a rate cut to -0.60% with a
750 billion euro top-up in PEPP (vs 500 bln base case), they
say, with Lagarde commentary highlighting high concerns over the
inflation outlook and the stronger euro.
For more check out this graphics-led piece:
GRAPHIC - Enough talk, time for action: Five questions for
the ECB
(Danilo Masoni)
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THE YEAR THAT WAS: EV = EXTREME VALUATION? (1002 GMT)
The rush to buy shares of electric vehicle makers at any
cost this year has been compared to the frenzy for Internet
stocks in late 90s.
While Elon Musk envisages space tourism and humans landing
on Mars in the next few years, investors (punters rather?)
backing his most successful venture, Tesla, saw
skyrocketing returns this year.
"Tesla has risen some 800% since the fall of 2019 on the
back of 17% growth in vehicles sold," asset manager GMO points
out. Tesla's has a greater market cap than the sum of all the
other U.S. automakers, all the European automakers, and all the
Korean automakers.
It wasn't just Tesla, any company producing electric
vehicles or supplying parts, such as batteries saw their share
prices soar. Those stratospheric gains in EV names led to
valuations soaring to levels seen in some Internet stocks just
before the dotcom bubble burst.
Electric truckmaker Nikola, which hasn't sold a
single truck yet, was the other sensation. Less so recently
after GM cancelled its deal that involved an equity stake in the
startup and plans for building Nikola's Badger electric pickup
truck. Its market cap rose to as much as $30 billion.
Tesla rival Nio rose nearly 1,000%.
And among suppliers, investors getting high on hydrogen
names: Norway's Nel, Canada's Ballard and
Britain's ITM Power have all risen multifold. Hydrogen
could play a key role in the global push to produce carbon-free
energy.
"...in shades of 2000 there are some schools of thought
suggesting that everything 'EV' and green will keep spiralling
higher because ESG funds have to keep buying them," Mirabaud
tech analyst Neil Campling said in a recent note.
"It doesn’t actually feel like this ‘party’ is over yet and
we are not yet at the ‘exhaustion’ phase."
Indeed, Joe Biden winning U.S. election is seen further
helping the sector as he aims to focus on clean energy and
zero-emissions vehicles.
Oops... we forgot to share some stats on the extreme
valuations, Tesla's 12-month forward price-to-earnings ratio is
at 164.6, according to Refinitiv data. That's a far cry versus
Daimler's 10 times forward earnings and Toyota's 16 times.
"Tesla shares are in our view and by virtually every
conventional metric not only overvalued, but dramatically so,"
JPM recently said in a note.
(Thyagaraju Adinarayan)
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OPENING SNAPSHOT: WEAK TECH CAPS GAINS (0824 GMT)
European shares are off to a muted start with the tech
sector standing out as the biggest loser and capping gains for
the STOXX 600 following a hit to U.S. peers overnight.
The pan-European index was up less than 0.1% in
early deals as a new deadline in Brexit talks and no progress in
U.S. stimulus discussions suggested some caution, hours before
an ECB meeting which is widely expected to clear more stimulus.
Ocado's second earnings upgrade in two months
failed to impress with shares in the UK online supermarket down
4.6%. German meal-kit delivery firm Hellofresh however
rose to the top of the STOXX, up 5%, after it upped its outlook.
A broker downgrade hit Securitas, down 4%.
(Danilo Masoni)
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STOCK MARKET RALLY HITS PAUSE (0757 GMT)
Knife-edge Brexit talks dragging on (new deadline: Sunday)
and deadlocked U.S. discussions over a coronavirus aid package
are no good premise for stock market bulls. European and U.S.
equity futures are in the red, following pullbacks in Asia.
Some of that is also down to the hit U.S. tech suffered on
Wednesday, when Facebook was hit by lawsuits which could force
it to sell prized assets WhatsApp and Instagram. EV maker Tesla,
set to join the S&P 500 next week, also came under pressure
after JPMorgan's warning the firm was "dramatically" overvalued.
On the bright side, the European Central Bank is expected to
announce an enhanced and extended pandemic stimulus programme,
though that's already baked into markets. And a two-day EU
summit kicks off and will likely unblock a stalled 1.8
trillion-euro spending package.
Meanwhile IPO frenzy continues. Food delivery firm DoorDash
rose over 80% in its debut, valuing it at $71.3 billion, boding
well for home rental startup Airbnb, which makes its own
highly-anticipated market debut on Thursday. The year has
generally been a bonanza for IPOs.
(Danilo Masoni)
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MORNING CALL: EUROPE SEEN SLIGHTLY LOWER (0627 GMT)
European shares are set to open a touch lower this morning
amid no progress in Brexit and U.S. fiscal stimulus talks.
After surging back to February highs in the previous
session, EuroSTOXX50 futures are now a touch in the red, down
0.25%, while FTSE 100 futures are off 0.1%.
Over in Asia, shares fell from a record high, while Wall
Street ended lower overnight with a drop in Facebook shares
providing an additional drag.
(Danilo Masoni)
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