Last checked at 
* STOXX 600 up 0.3%, nears record
* CAC 40 on Nov 2000 highs, DAX dips
* Unilever shines on sales beat, buyback
* Banks top gainers
April 29 - 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
POST-PANDEMIC INFLATION: NO HARM FOR EQUITIES (0925 GMT)
Should or shouldn’t stock markets be worried about
post-pandemic inflation?
According to UBS analysts, who continue to be positive on
stocks, a spike in consumer prices is a “potential source of
volatility” but not a “major threat for equities.”
Let’s see why.
A price rise could “unsettle some investors, and so we
advise being prepared for volatility ahead,” UBS analysts say.
But, it will not trigger any increase in policy interest
rates as the Fed and the ECB continue to say they will tolerate
inflation above their 2% targets for some time.
“The Fed actually wants an inflation overshoot to make up
for the previous undershoot,” they add.
Higher input prices will not be “a headwind for earnings” as
in an environment of strong consumer demand, “we expect revenue
growth to help offset the drag of input costs.”
Meanwhile, they “don’t see strong evidence of broad-based
wage pressures.”
Several prominent consumer goods companies, including
Coca-Cola and Whirlpool, have also indicated in recent earnings
calls that prices will rise, UBS analysts recall.
(Stefano Rebaudo)
*****
OPENING SNAPSHOT: NOKIA, UNILEVER, SHELL, TOTAL (0750 GMT)
European shares started the day on the right foot, with the
STOXX 600 index getting closer to fresh highs after
Fed's dovish remarks and another better-than-expected batch of
earnings results.
The pan-European index is up 0.4% with travel and leisure
and telecom leading the pack.
The telecom space has gained support by strong quarterly
results from Finnish network equipment maker Nokia,
whose shares are up about 13%.
Consumer goods giant Unilever is up 3% as a pick up
in home cooking and a strong economic recovery in China led to
better-than-expected Q1 sales. The company also announced a
share buyback programme up to 3 billion euros.
Other major companies reporting strong earnings today
include London-listed Royal Dutch Shell, which raised
its dividend by 4% and France's energy company Total,
which reported first-quarter earnings close to pre-pandemic
levels.
(Joice Alves)
*****
MORNING BID: BULLS GET FRESH WIND AS NOT YET TIME TO TAPER
(0710 GMT)
"It is not time yet," to begin discussing any change in
policy, Fed chairman Jerome Powell said. Soon after, President
Joe Biden began his pitch to Congress for a $1.8 trillion
infrastructure project. That coupled with forecast-beating Q1
results from Facebook and Apple were sufficient fuel for the
bulls.
Some analysts did describe the Fed's language as tiptoeing
towards a discussion about weaning the economy off crisis-era
stimulus; U.S. 10-year yields are a touch higher but the dollar
has dug in near two-month lows. All in all, equity futures are
higher -- the Nasdaq by almost 1%.
There could be further downside in store for the dollar --
data also showed this week the U.S. goods trade deficit at $90.6
billion is the highest ever and while Q1 growth may be revealed
later on Thursday at a blistering 6.1%, it could well be the
top. As European vaccinations gather pace and with ECB president
Christine Lagarde predicting a rapid rebound, it might be time
for the dollar to take a bit of respite.
On that note, watch out for German Q1 GDP and inflation
releases.
The earnings season continues meanwhile, bringing
double-digit rebounds albeit from year-ago troughs. Standard
Chartered posted a forecast-beating 18% rise in quarterly
pre-tax profit lifting its Hong Kong-listed shares more than 2%.
Dividends and buybacks are back with a vengeance too --
Shell upped dividends by 4% -- the second increase since
slashing them at the start of 2020 -- while Unilever announced a
a $3.6 billion buyback. This is on the heels of monster buyback
programmes announced by Alphabet and Apple.
Key developments that should provide more direction to markets
on Thursday:
- Airbus posted higher first-quarter core earnings; Unilever
beat quarterly sales forecasts; Nokia beat Q1 forecasts
- UK Nationwide house prices;
- German jobless/German prelim CPI/HICP
- German flash GDP Q1
- ECB's de Guindos speaks 0730 GMT
- Fed speakers: NY Fed's John Williams 1800 GMT
- U.S. Q1 GDP, weekly jobless claims
- U.S. earnings: Bristol Myers-Squib, Merck, ConocoPhillips,
McDonald, Caterpillar, Newmont, Domino’s, Mastercard, Amazon,
Gilead sciences, First Solar
(Sujata Rao)
*****
SUPPORTED BY BIDEN AND THE FED (0619 GMT)
European stock futures are in positive territory as the U.S.
government and the Fed reiterated their pledge to support the
U.S. economy.
President Joe Biden proposed a new $1.8 trillion plan in a
speech to a joint session of Congress on Wednesday, pleading to
raise taxes on wealthy Americans to help pay for his "American
Families Plan."
Fed Chair Jerome Powell repeated it's not time yet to change
its dovish monetary policy despite a more optimistic view on the
economic recovery.
(Stefano Rebaudo)
*****
