Ocado Share News (OCDO)

* European stocks rise: STOXX, DAX hit record highs
* AMS dips despite Q4 beat, share sale for Osram takeover in focus
* Central bankers: eyes on Lagarde, Carney and Powell speeches
* TUI surges on coronavirus fears respite

Welcome to the home for real-time coverage of European equity markets brought to you by Reuters
stocks reporters. You can share your thoughts with Thyagaraju Adinarayan
(thyagaraju.adinarayan@tr.com), Joice Alves (joice.alves@tr.com), Julien Ponthus
(julien.ponthus@tr.com) in London and Danilo Masoni (danilo.masoni@tr.com) in Milan.



"CHASING THE UNICORNS": DAX AT NEW RECORD (1628 GMT)
Germany's exporter-heavy DAX index has climbed to a new record high, mirroring Wall
Street benchmarks, but there's a lot of scepticism out there over whether these gains are
justified, given China and the country's internal troubles.
"I don't think this makes sense, Germany has strong ties to China and global trade and could
suffer from any commercial friction with the United States," says Giuseppe Sersale, portfolio
manager and strategist at Anthilia in Milan.
"But okay. We must first begin to see the impact of the Chinese events on numbers, until
then we'll continue chasing the unicorns".
Here's your DAX index, and please drop me an email danilo.masoni@tr.com to let me know what
you think.
(Danilo Masoni)
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POWELL, PLEEAASSE, SOME MORE OF THEEESE! (1531 GMT)
Like the depressed housewife in the Rolling Stones song, markets seem to need a little
helper to carry on.
It's not little yellow pills though, but regular shots of central bank liquidity.
Yes, grumpy bears are calling markets junkies, and explaining by regular intakes of monetary
steroids their exuberant behaviour in the face of anything thrown at them, be it a deadly virus
outbreak in the world's second-biggest economy.
The recent Chinese generic version from the PBOC has done wonders and QE addicts all over
the world are now hoping the coronavirus will provide some excuse to extend the monetary buzz
before the effect of the last fix wears off.
Edward Moya at OANDA believes equities markets are higher "on hopes that Fed Chair Powell’s
testimony to Congress will signal that the coronavirus impact to the global economy could
warrant further stimulus from the Fed".
For Michael Every at Rabobank, the essence of the game will be "to decipher the hidden and
not so hidden hints in his (Powell) speech to ensure that one correctly front-runs where the
state is about to pour enormous buckets of liquidity".
Same diagnostic at Unigestion where Didier Anthamatten writes that "ample liquidity offered
by central banks around the globe and their readiness to act, are encouraging equity investors
to buy on any market dips".
Takeaway? "It seems that fearful macro investors are running for the hills, while greedy
equity investors are bathing in an ocean of liquidity".
There's very little anticipation that Powell will disappoint.
"There's the assumption that if the economic contagion effects from the virus hit the US
economy, Powell will have the markets back", wrote Stephen Innes chief market strategist at
AxiCorp.
(Julien Ponthus)
******


A STOXX BREXIT? (1518 GMT)
As markets hold onto record high levels, a quick health check on the individual stocks'
performance so far this year shows London names at the bottom of the pan European index
and continental Europe at the top.
NMC Health (absolutely no surprise) is the top loser while Ingenico (M&A)
and Deutsche Bank (SURPRISE!) are the top gainers.
It looks like Brexit in the STOXX 600 index! (**NOTE: The stock moves weren't related to
Brexit)


(Thyagaraju Adinarayan)
*****



THE STRANGE CASE OF INVESTORS BUYING ITALY (1240 GMT)
Investors have set their eyes on Italian shares pushing Milan's blue-chip index to
its highest since the global financial crisis.
"Italy has experienced large net inflows following the regional elections where the
centre-left Democratic Party withstood the challenge for key seats," write UBS analysts, adding
that Italy has been the top pick for the Swiss bank's clients over the past four weeks.
And if you are not surprised that a recent Italian election is not creating headaches to
stock investors, wait. There's more to it.
Italian banks, which had been a long drag on Europe, are the preferred pick in the country.
See chart below:

But some Italian banks' Q4 results can explain why there's such appetite.
UBI to offload more bad loans after results top forecasts
Intesa forecasts higher 2020 net profit after solid Q4
UniCredit to boost investor returns after results beat expectations
Mediobanca profits up on consumer business, wealth management

(Joice Alves)
*****


RECESSION SIGNALS AND THE BALTIC DISCONNECT (1206 GMT)
The baltic dry index, once a popular recession indicator, has fallen a whopping 62%
year-to-date and 83% from September highs but there seems to be no panic in risk assets.
"One likely explanation for this is that it only looks at the shipment of dry bulk or
commodities, which represent only part of the global economy," said Jeroen Blokland, Portfolio
Manager at Robeco.
The index often an indicator of future economic activity has been largely ignored by
investors as liquidity injection by central banks and Chinese stimulus measures (after
coronavirus) has kept bulls on fast track.
The index slumped 75% in 2015-16 to even lower levels than where it is now, no major
economic crash followed and its four-fold jump in 2019 to the highest level in 10 years was not
followed by an economic boom, Blokland notes.

(Thyagaraju Adinarayan)
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ANOTHER NAIL IN THE STOXX VS S&P TRADE (1135 GMT)
It's a call that European equity strategists need to make every year: Will the STOXX 600
finally outperform the S&P 500?
For 2020, a lot of hope was put into the European economy bottoming out and the continent's
blue chips finding their way out of corporate recession in Q4.
On the former point, the chart below which shows the euro zone surprise index falling down
just as it jumps in the U.S. pours a bucket of ice on expectations of a catch up.
Adding that with the dollar expected to beat the euro for the foreseeable future, U.S.
stocks should get lots of FX wind in their sails.

On the point of European earnings both propping up shares prices and encouraging some
rerating versus richer U.S. PE ratios, it's not looking good either.
Expectations for STOXX 600 Q4 earnings have slid from over 5% in November to a meagre 1.2%,
which is below the 2.3% awaited for the S&P.
Here's how the ever-elusive STOXX versus S&P catch-up is going so far this year:


(Julien Ponthus and Ritvik Carvalho)
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THE CHINA VIRUS HASN'T SCARED THE CROWD (1100 GMT)
Stock markets in Europe and the U.S. have more than recovered from the initial drop caused
by China's new virus outbreak.
What's more surprising is that worries over its damage to economic activity hasn't even
changed style/stock positioning, Citi says.
"In fact, crowded stocks, mainly in the defensive part of the market, continue to positively
perform which is likely to continue until we reach a turning point in the crisis," analysts at
the U.S. investment bank say.
"From a sector perspective, Luxury Goods, Airlines, Autos and IT were expected to suffer in
reaction however... we haven't yet seen this play out from a crowding perspective; the only
industry which has seen crowding decrease is the autos industry," they add.
(Danilo Masoni)
*****


BETTER CHANCE NEXT TIME! DAX JUST 1.2 PTS FROM RECORD (1013 GMT)
There was an opportunity for the DAX to snatch a new record by surfing on this
morning's market upswing which saw the STOXX 600 hit a life high yet again.
But it was not meant to be: the German blue chip index fell short by the smallest of
margins.
Frankfurt reached 13,638.86 points versus its January 22 record of 13,640.06.
Now with this morning's burst of enthusiasm fizzling out to just a more modest, yet
comfortable rise, it seems DAX watchers will have to wait some more to catch another benchmark.
(Julien Ponthus)
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"WORST PRE-MARKET CALLS EVER!" #HEARDINTHENEWSROOM (0921 GMT)
There are mornings when stocks open roughly the way you expect them to and then there are
days like today!
There was a broad assumption across brokers for instance that sensor specialist ams AG
would surge at the open after an upbeat Q4. Well it did go up very briefly but soon
enough, it was falling deep into negative territory. The update on the rights issue to help
finance its Osram takeover may have given some investors cold feet, a trader noted.
Take Daimler! There's was quite a consensus across morning calls that it would
open just slightly in negative territory after slashing its dividend in another profit warning.
But the car maker made it to the top of Germany's DAX with a 1.7% rise before falling back
down again to the bottom of the German blue chip index.
Another funny one was TUI. While it did report strong demand for holidays that
would help it offset the impact of the grounding of the Boeing 737 MAX, no one expected the
European travel company to surge over 10% to claim the top of the STOXX 600. People were
actually looking at a 1-2% tick upwards at it happened and in these time of coronavirus
epidemic, it's not a given to take big bets on the sector.
Here's AMS first hour of trading, followed by that of Daimler:
(Julien Ponthus and Thyagaraju Adinarayan)
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OPENING SNAPSHOT: STOXX AT RECORD, TUI TAKES OFF (0824 GMT)
European stocks notched fresh record high levels with clear risk-on moves across the board
as investors once again took comfort from stimulus measures even as death toll from coronavirus
crossed 1,000.
China/coronavirus plays, such as travel & leisure index, autos and miners
are the top gainers. Among travel companies, Tui's blow-out 2019 results are
driving the European travel company's shares 10% higher. The move also boosts easyJet.
Once again, the highly volatile NMC is at the bottom of the STOXX 600 index after
soaring yesterday on buyout approaches from private equity firms KKR and GK Investment.

Deutsche Telekom and Delivery Hero were other significant movers as
expected on news we highlighted in the previous blog.
Here's your opening snapshot:

(Thyagaraju Adinarayan)
*****

CARS IN REVERSE GEAR, TECH SHINES, BRITISH RETAILERS MIXED (0750 GMT)
European stocks are seen opening sharply higher at record high levels, following gains in
Asia and the United States overnight, as Chinese stimulus measures are helping investors keep up
their risk appetite even as the country reported its 1000th death from coronavirus.
Stock futures are rising between 0.6% to 0.9% amid a downpour of corporate headlines.
Autos in focus after Daimler axes its dividend as 2019 profits more than halved,
sending its shares 1% lower in premarket trade. French tyremaker Michelin meanwhile
forecast slightly lower profits in 2020 even without the impact of the coronavirus crisis in
China.
AMS, which supplies sensors to Apple iPhone, is seen rising 5% to 7% reported
fourth-quarter revenues above its own forecast and the upbeat results are likely to boost shares
of peers Dialog Semi, Infineon and STMicro among others.
In telcos, Deutsche Telekom is rising 3% in premarket trade after sources say
that U.S. judge is expected to rule in favor of merger of Sprint, T-Mobile.
In the UK, retailer Ocado shares could rise between 1% and 2%, traders say, after
it forecast 15%-20% revenue growth for 2020, offsetting worries about a 27% drop in 2019
earnings.
High street retailer JD Sports in the spotlight after Britain's competition watchdog
said the company's takeover of rival Footasylum could leave shoppers worse off.
Other potential stock moves flagged by traders: Metro seen 2% higher after it
reached a deal to sell its hypermarkets business; TUI seen up 1% to 2% as strong
demand for holidays helps 2019 earnings, offsetting impact from 737 MAX groundings; Delivery
Hero seen slightly lower on profit-taking after solid 2019 results.

(Thyagaraju Adinarayan)
*****


RECORD HIGH OPEN FOR EUROPE? (0630 GMT)
European stocks seem to be gearing-up to test fresh record highs in a V-shaped rebound
driven by central bank liquidity, even as China reported its 1000th death from coronavirus.
Financial spreadbetters IG expect London's FTSE to open 40 points higher at 7,487,
Frankfurt's DAX to open 92 points higher at 13,586, and Paris' CAC to open 31 points higher at
6,046.
"One of the enormous dilemmas for investors is whether the impact of the coronavirus will be
enough to derail the global economy and usher in another round of Fed + easing," AxiCorp's chief
market strategist Stephen Innes says.

(Thyagaraju Adinarayan)
*****



(Reporting by Danilo Masoni, Joice Alves, Julien Ponthus and Thyagaraju Adinarayan)