(Corrects to reflect strongest winning streak for WTI crude since 2016, not strongest week)
* European stocks recover as U.S. futures rise
* Plus500 plunges 29 pct after revenue slump
* Peers IG Group, CMC Markets down 3.7 to 4.3 pct
* Pets at Home down 13.6 pct after share placement
* Investors brace for JP Morgan, Wells Fargo results
April 12 - Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters and anchored today by Helen Reid. Reach her on Messenger to share your thoughts on market moves: helen.reid.thomsonreuters.com@reuters.net
CRUDE GAINS TO PROPEL OIL STOCKS HIGHER AS EARNINGS LOOM (1055 GMT)
WTI crude is set for its longest winning streak (six weeks straight) since 2016, thanks to signs of stabilisation from China helping soother investors' worries about global growth.
With results shortly coming in from Europe's oil and gas giants, JP Morgan analysts reckon shares could continue to rise (the sector is up 14 percent this year) as the oil price buoys earnings.
Crude is being supported by geopolitical tensions in big oil-producing regions, Saudi Arabia's move to a more pro-cyclical outlook, and non-renewal of production waivers in Iran.
"On balance, we believe the risk/reward is positive for EU Oils and remain constructive following our cautious stance in 2018," JPM analysts write.
As you can see below, rising crude prices tend to be a precursor for higher earnings for the oil majors.
JPM recommends Shell over BP (where they say downstream performance could hurt performance), and are long Equinor, saying gas headwinds are well flagged. Their case for Shell (one of their "best fundamental ideas for 2019") rests on its high free cash flow.
(Helen Reid)
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EUROPEAN EARNINGS: IT'S THE SAME OLD STORY (0844 GMT)
First quarter earnings season in Europe is set to kick off next week, and UBS equity strategists say it's expected to be better than Q4 (the worst in 8 years), but weak in general.
"...suspect we are now past the worst of the downgrades. March was the best month for earnings momentum since September (ahead of the selloff) and there are signs of Eurozone composite PMIs bottoming out," they write.
Things to watch out for, absolutely nothing new in here, but worth reminding ourselves:
1. Impact of trade wars
2. Pressures from rising costs
3. Inventory build around Brexit - the biggest in 25 years
"There has been an improvement in the mood music around the first catalyst (U.S.-China trade), but no final agreed deal," the strategists add.
On the positives, the euro's nine percent drop during the quarter is expected to provide a tailwind for the first time in 13 quarters, UBS adds.
Earnings momentum is the strongest for food retail and production, tech, and mining, while it's the weakest for media, retail, and paper (see below).
European markets have rallied 15 percent year-to-date despite earnings downgrades. This morning they are trading in a pretty tight range (0.1 percent to -0.2 percent).
(Thyagaraju Adinarayan)
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EUROPEAN BUYBACKS: WILL THEY EVER BE AS BIG AS THE U.S.? (0829 GMT)
One perennial puzzle about European equity markets as opposed to the U.S. is the relative scarcity of buybacks. Buybacks account for 5 percent of cash usage, a tiny amount compared with the U.S. (25 to 30 percent).
Sharon Bell, European equity strategist at Goldman Sachs, puts this transatlantic divide down to six main drivers:
* European companies tend to seek a higher cash buffer due to high cost of equity and low returns on cash (due to record low interest rates)
* Different share ownership structures: management incentive schemes are more common in the U.S.
* Visibility of quarterly EPS: far fewer European companies deliver quarterly reports
* Demand for stable income: pension funds and insurance companies prefer dividends
* Profitability: Europe Inc has had weak earnings and cashflows recently - especially financials
* Legal restrictions: buybacks were only legalised in Europe in the late 90s (except for the UK where it's been legal since early 80s)
Share repurchases in Europe have been rising and could continue to do so. In 2007 pre-financial crisis they made up 12 percent of companies' cash use, implying upside potential to current levels, says Bell.
But, she adds, European corporates appear as focused as ever on paying dividends - likely because these have been a much clearer driver of outperformance than buybacks.
(Helen Reid)
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OPENING SNAPSHOT: PLUS500 IN FREEFALL, ANOTHER SWISS IPO (0745 GMT)
Subdued start for European indices taking their cue from Asia and ahead of the start of the U.S. corporate earnings season with JP Morgan to go first later today.
In European corporate news, shares in retail-focused trading platforms are sliding after Plus500's revenue plunge. Plus500 slumps 30 percent, while peers IG Group and CMC Markets are down 3 to 4 percent.
"Given the level of global political and economic news, financial markets were surprisingly subdued in the period, which reduced the number of trading opportunities for customers," Plus500 CEO Asaf Elimelec said.
Not much has changed so far in the second quarter either, the pan-European Stoxx 600 has not risen or fallen more than half a percent in the last six trading days. And the trend continues: it's down 0.2 percent today.
But Switzerland has another IPO this week after Alcon: Stadler Rail jumps 11 percent on its market debut on the SIX Swiss Exchange.
Eutelsat tops the Stoxx 600, rising 5 percent, after Berenberg upgrades to "buy."
(Thyagaraju Adinarayan)
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WHAT'S ON THE RADAR FOR THE OPEN: PLUS500 PLUNGE, SALAD DEALS (0646 GMT)
European futures slipped slightly on Friday as hesitant trading continued ahead of the hotly-anticipated U.S. earnings season, with JP Morgan and Wells Fargo kicking off proceedings later in the day.
On the company news front, results from Plus500 and Software stole the spotlight.
Plus500 is likely to plunge 25 to 40 percent, traders said, after revenue at the online trading platform sank to more than a fifth of that a year ago as trading volumes fell, which it attributed to lower market volatility.
Germany's Software is up 3.7 percent in pre-market after it raised its 2019 outlook and reported Q1 results.
Mitie shares are seen falling around 3 percent after the UK competition watchdog warned Rentokil’s already completed takeover of the company’s pest control unit might restrict choice and lead to higher prices for customers.
Danone, meanwhile, could get a slight boost (around 1 percent, traders say) from the sale of its U.S. organic salad business Earthbound Farms to California-based Taylor Farms.
Britain’s Pets At Home could tumble after the Canada pension plan investment board sold 54.3 million shares in the company. Rubis also placed 5.09 million shares and it was indicated down 4 percent.
(Helen Reid)
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EUROPEAN FUTURES LACKLUSTRE, SOFTWARE, SANTANDER, STADLER RAIL IN FOCUS (0617 GMT)
Futures have opened down slightly with investors likely to stick to this sideways movement until U.S. bank earnings deliver the first important data point of the Q1 earnings season.
There's not much on the company news side of things in Europe, but another IPO in Switzerland after Alcon earlier this week could keep traders busy. Stadler Rail is valued at 3.8 billion francs ($3.79 billion) ahead of its debut on the SIX Swiss Exchange.
And the market is abuzz with excitement and debate after Uber unveiled its IPO prospectus with a warning it may never make a profit.
In results, Germany's Software is gaining in pre-market after it raised its 2019 outlook.
And in dealmaking news, Santander has launched an offer to buy the 25 percent stake it doesn't yet own in its Mexican unit.
Trading platform Plus500's quarterly revenues and number of active customers tumble
(Helen Reid)
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HESITATION IN EUROPE AS U.S. BANK EARNINGS LOOM (0539 GMT)
European stocks are expected to edge slightly up this morning, but the main event is really later in the day when JP Morgan and Wells Fargo report earnings, thus kicking off the crucial U.S. earnings season.
Asian shares turned lower overnight as trepidation ahead of the start of the earnings season and underlying anxiety over the global growth outlook eclipsed some reassuring U.S. economic data.
Financial spreadbetters expect London's FTSE to open 13 point higher at 7,431, Frankfurt's DAX to open 2 points higher at 11,937 and Paris' CAC to open 3 points higher at 5,489.
(Helen Reid)
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