Last checked at 
* European shares pare losses
* Wall Street futures tick up
* China's Evergrande continues to weigh
Oct 12 - 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
LATE MORNING SINGLE STOCK MARKET PRICE ACTION BURST (1043
GMT)
The STOXX 600 is gradually erasing most of its early losses
and making its way close to the flotation mark.
But while a -0.02% move doesn't qualify for an exciting
session for the benchmark, this doesn't mean it has been
uneventful underneath the surface.
About just an hour ago, there were pretty big and sudden
moves in London and Helsinki.
Shares in GSK jumped after Bloomberg reported private equity
firms' interest for the group's $54 billion consumer arm.
At roughly the same time, Stora Enso and
UPM-Kymmene Corporation both dropped after EU antitrust
regulators said they raided wood pulp makers in several
countries as part of a cartel investigation.
UPM just confirmed EU competition authorities were
conducting an unannounced inspection at its premises while there
were no immediate announcement from Stora Enso.
Here's what the sudden market price action looked like
(Helsinki is two hours ahead London):
(Julien Ponthus)
*****
EARNINGS SEASON FLAVOUR: VALUE! (0927 GMT)
Again? Yes again!
Calls for investors to look for value (otherwise known as
cheap) stocks have been risen seemingly as fast as German bund
and U.S Treasury yields lately.
Sell-side and buy-side analysts have been flagging that
these areas of the stock markets are typically winners when
inflation kicks in and with the earnings season opening, these
calls continue to pour in.
There's already been a few episodes of investors quickly
rotating their portfolio from growth and tech to value,
particularly last year when the COVID-19 vaccine breakthroughs
were announced in November.
According to Amundi, there's now another investing window
open across U.S. equities.
"In our view, investors will have a second chance to exploit
opportunities in the value space", wrote U.S. portfolio managers
Marco Pirondini and Alec Murray.
Stocks in the energy and financial spaces "should benefit
from higher inflation, the upward trend for commodity prices,
and a rising interest rate environment", they argue.
While tech was the ultimate winner during the first phase of
the pandemic, "higher interest rates mean a higher discount
rate, which lowers the net present value of future cash flows
for those growth names", they add.
One other argument is that "value trades at its steepest
discount to growth since 1999".
See the Amundi chart below:
(Julien Ponthus)
*****
EUROPEAN STOCKS SLIP INTO RISK-OFF (0810 GMT)
European shares slipped into risk-off mode as the energy
price crisis continued to hit sentiment ahead of the corporate
earnings season.
The pan European index STOXX 600 is down 0.6%, with
economically sensitive mining, autos and banking
sectors leading the losses, shedding more than 1%.
All the main regional indexes are also trading in negative
territory.
Declines in heavyweight mining stocks are pushing the FTSE
down 0.7% as higher energy costs, supply chain disruptions and
an imminent rate hike weigh.
Fuelling inflation fears, data showed that British employers
took their payrolls to a record high in September, while average
weekly earnings were 7.2% higher than in the same three months
of 2020, but slowing from the previous reading of 8.3%.
(Joice Alves)
*****
THE WAITING GAME (0705 GMT)
So many question marks these days: will the inflation spike
we are witnessing ebb? Will central banks resist temptation to
significantly tighten policy? How much of a dampener is $80 oil
for the world economy? Are China's property sector problems a
sign of a wider malaise?
These narratives have kept world stocks seesawing ever since
they hit record highs in early-September. Wall Street futures
are down half a percent while European shares look set for an
even weaker open. Big losses in Asia earlier, with Hong Kong
down more than 1%.
On bonds, softer growth data is failing to derail a selloff;
10-year Treasury yields are up some 30 basis points in three
weeks and on Tuesday, two-year yields touched 18-month highs.
The impact of soaring energy prices is showing up in
dataprints -- even in Japan, wholesale inflation hit a 13-year
high. British shoppers, meanwhile, upped spending by just 0.6%
in September versus 3% in August (though fuel shortages peculiar
to the UK probably had an outsize impact).
Another worrying piece of data is last month's 20% slump in
Chinese car sales, which will likely ripple out to global auto
shares. The Chinese slowdown could also make itself
felt in Germany's ZEW index later in the day.
On the bright side, UK payrolls hit a record high in
September, with a 7.2% rise in average weekly earnings in the
three months to August.
All that comes just before third quarter earnings kick off.
Remember several companies have already issued downbeat
assessments of how higher prices will have impacted the bottom
line. Q3 earnings were never expected to match the Q2 blowout
but will they fall short even of the 30% growth expected of U.S.
companies? The wait is on.
Key developments that should provide more direction to
markets on Tuesday:
-China's Evergrande missed a third round of bond payments
-Japan wholesale inflation at 13-year high in September
- UK retail spending rose 0.6% in Sept vs 3% increase
.
- IMF issues its updated World Economic Outlook
- ECB’s Chair of the Supervisory Board, Andrea Enria, board
members Philip Lane, Frank Elderson,
- Bank of Korea holds rates, flags November hike
- German ZEW
- U.S. JOLTS job openings
- U.S. Treasury auctions $96 billion in 3-year and 10-year notes
(Sujata Rao)
*****
EUROPEAN STOCK FUTURES DIP AROUND 1% (0630 GMT)
Futures are pointing to a start of the day in negative
territory for European bourses amid a global energy crunch,
clouding sentiment before the U.S. corporate earnings season.
Futures on main regional benchmarks are down around 1%,
after oil prices jumped on Monday to the highest levels in
years, fuelling inflation fears.
Also weighing on investor sentiment, Reuters reported that
some of China Evergrande Group's offshore bondholders have not
received interest payment by a Monday deadline.
(Joice Alves)
*****
