* European Stoxx 600 up 0.3%
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T&L AND TECH STOCKS LEAD GAINS (0728 GMT)
European stocks are not far from their all-time highs, with
travel and leisure and tech shares leading gains, amid positive
vaccination news and fading worries about a Fed tapering.
The Stoxx 600 is up 0.3% with travel and leisure
stock index up 1%. Tech shares rise 0.9% after
the Nasdaq hit a new all-time high yesterday.
Banks are in negative territory as prospects for
higher central bank interest rates appeared to be delayed.
Deutsche Bank analysts say there "seemed to be increasing
optimism that the weakening economic outlook might actually lead
to a more cautious attitude by central bankers when it comes to
withdrawing monetary policy support."
The U.S. Food and Drug Administration gave full approval to
Pfizer vaccine in a move that might accelerate inoculations,
while Fed tapering at this week’s Jackson Hole symposium is seen
as less and less likely.
Marks & Spencer shares are the best performer in the Stoxx
600, up 3%, after Berenberg raised its target.
(Stefano Rebaudo)
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THE MARKETS ARE ALL RIGHT (0708 GMT)
Monetary accommodation, economic growth and company earnings
may all be peaking, Delta cases remains a menace but markets?
They are just fine.
Whether or not Jerome Powell's Jackson Hole speech this
Friday brings the long-awaited taper signal, Wall Street is back
doing what it does best -- notching record highs. Futures
indicate another firm start for U.S. and European shares, after
a 1.5% jump on MSCI's main Asian equity index.
So after last week's wobbles, what's going right? First, the
economy. U.S. August composite PMIs slipped to the lowest since
December but at 55.4, the private sector is clearly robust. Euro
zone PMIs too slipped but from July's two-decade highs while
Tuesday data revised up German Q2 GDP to 1.6%, versus a previous
1.5% estimate.
As for the pandemic, there are hopes vaccine-sceptic
Americans will finally take the Pfizer/BioNtech vaccine after
the drug regulator FDA granted it full approval. That's helping
oil prices extend gains following Monday's 5% leap.
Another peak that matters is the "real" U.S. Treasury yield.
Last week's 9 basis-point rise rocked stock markets but 10-year
inflation-adjusted yields are back below -1%.
And there's steady corporate newsflow -- Banco Santander is
to buy out its U.S. consumer unit in a $12.7 billion deal while
chemicals firm IFF has agreed to a $1.3 billion sale of its
microbial control unit to Germany's Lanxess.
Finally, the U.S. House of Representatives will return at
1600 GMT to continue debating a $3.5 trillion budget plan after
a vote on it was postponed.
Key developments that should provide more direction to markets
on Tuesday:
-Germany Q2 GDP revised up to 1.6%
-UK engineering group Wood reported a 14.1% fall in H1 profit;
Switzerland's BV plans a Q4 IPO for Skan in which it has a
majority stake
-UK supermarket Morrisons shareholder Legal & General
sees new bids from a private equity chain were closer to true
value. Rival Sainsbury's shares rocketed 15% on Monday on
reports it too was facing an approach.
-U.S. building permits, new home sales July
-Richmond Fed services index
- U.S. auction $80 billion in 2-year bonds, Germany to auction
7-year debt
- Hungary central bank expected to hike rates
- ECB board member Isabel Schnabel speaks in panel discussion
- U.S. Earnings: Medtronics, Best Buy, Urban Outfitters,
Nordstrom
- European earnings: Zurich Flughafen
(Sujata Rao)
*****
STOCKS PROPPED UP BY FULL VACCINE APPROVAL (0619 GMT)
European stocks are poised to open slightly higher as the
full approval of the Pfizer/BioNTech COVID vaccine boosts risk
sentiment. Investors also appear less worried about a potential
Fed tapering announcement at the end of the week.
The Food and Drug Administration's move might instil
additional confidence to get vaccinated and prompt more
governments to impose vaccine mandates, soothing fears about the
impact of the Delta variant.
Analysts meanwhile say that the economic recovery is headed
in the right direction but not enough to prompt the Fed to
announce a tapering of its monetary stimulus at the Jackson Hole
symposium.
On the corporate front, BHP Group is at risk of a
two notch downgrade that would provoke its lowest ever credit
rating after the sale of its petroleum business; Morrisons
shareholder Legal & General said it believed the true
value of the supermarket chain should be realised following the
sweetened bid from private equity group CD&R.
(Stefano Rebaudo)
*****
