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LOCKDOWN 2.0 FEARS RATTLE STOCK MARKETS (0841 GMT)
Markets aren't surprised by the spike in COVID-19 cases (the
second wave), but by the rising probabilities of a another
complete lockdown. Eurozone stock markets are testing June lows,
while FTSE 100 is in a league of it's own - April lows!
Election anxiety is also playing its part, but news that
France, Germany and possibly UK mulling a lockdown seems to be
the single biggest factor in the selloff. Healthcare and tech
are favourites after a very short period of value rotation as
rates move down and curves flatten again.
The Euro STOXX volatility index soared to 37.3 points
highest since June.
"...although we are far better prepared than we were for the
first wave the reality is that the first wave occurred late in
the traditional flu/cold/virus season," Deutsche Bank's Jim Reid
says.
"The second wave still hasn’t even hit November or December
yet and we’re still seeing cases soar in many places."
(Thyagaraju Adinarayan)
*****
ON THE RADAR: CARREFOUR, HEINEKEN, DEUTSCHE BANK (0730 GMT)
European futures are well in the red as COVID-19 cases are
rising at alarming pace across the region, with France's Macron
expected to announce fresh restrictions in a televised address
this evening.
In the meantime, a batch of strong third quarter results
could cheer up investors a little.
Europe's largest retailer Carrefour achieved
record 8.4% like-for-like sales growth in Q3, reflecting a
stronger performance in its key markets of France, Spain and
Brazil.
While online takeaway food company Delivery Hero
raised its guidance for 2020 sales for the second time this year
as coronavirus lockdowns and investment in ultra-fast deliveries
boosted quarterly figures.
Telefonica Deutschland reported solid Q3 results,
supported by the addition of 308,000 postpaid clients and low
churn rates as its network investments paid off.
British fashion retailer Next upgraded its FY profit
guidance for the third time in as many months after full-price
sales in its third quarter exceeded its expectations.
Shares in German sportswear company Puma were down
5.3% in early trade after the company reported a strong rebound
in Q3 sales in the Americas and Europe but noted that consumer
sentiment was turning negative again.
Heineken NV performed better than expected over
the June-September quarter with a surprising increase in beer
sales in the Americas, but said the COVID-19 pandemic was still
too uncertain to provide a reliable 2020 outlook.
Shares in Morphosys are up 5.2% in early Frankfurt
trade after the company raised outlook.
Another bank beats expectations: Deutsche Bank
shares are up 3% on Land & Schwarz after the bank reported a
surprise swing into net profit in Q3 and upgraded the revenue
outlook for its investment bank.
Things weren't great for everyone. Spain's Bankia
said its Q3 net profit fell 79% against the same period a year
ago due to 155 million euros in COVID-19 related provisions.
Shares in BASF were down 1.6% in early Frankfurt
trade after the company reaffirmed it expects 2020 adjusted
operating profit to fall to between 3 billion and 3.3 billion
euros, down from 4.5 billion euros last year.
Finnish flag carrier Finnair reported a second
consecutive quarterly loss and warned of a similar result in the
final quarter.
Peugeot maker PSA Group posted a 0.8% decline in
its Q3 sales from a year ago, though revenue from its core auto
division grew again after slumping earlier in 2020 at the height
of coronavirus lockdowns.
On the vaccine front, Novartis has licenced global
rights to two Molecular Partners antiviral drugs that
have potential to treat COVID-19 patients, the two companies
said on Wednesday.
(Joice Alves)
*****
THIRD CONSECUTIVE DAY IN THE RED FOR EUROPEAN BOURSES (0635
GMT)
Futures are pointing to a third consecutive day of losses
for European bourses as coronavirus cases are growing at full
speed in the U.S. and Europe.
Uncertainty around the U.S. presidential election, in less
than a week, is also keeping investors on their toes.
In the meantime, oil price rises 2% after companies shut
down some U.S. Gulf of Mexico oil production ahead of storm
Zeta.
Financial spreadbetters at IG expect London's FTSE to open
27 points lower at 5,702, Frankfurt's DAX to open 154 points
lower at 11,909 and Paris' CAC to open 63 points lower at 4,668.
(Joice Alves)
*****
