LONDON, March 1 (Reuters) - Welcome to the home for real-time coverage of European equitymarkets brought to you by Reuters stocks reporters and anchored today by Kit Rees. Reach her onMessenger to share your thoughts on market moves: kit.rees.thomsonreuters.com@reuters.net
UK RETAIL: NOW IS THE WINTER OF OUR DISCONTENT (1221 GMT) Investors weren't keen on
UK domestic firms to begin with, given their reliance on the
UKeconomy and sensitivity to Brexit, and today we've had another casualty -- Carpetright -- whichdemonstrates how discerning investors need to be when looking for value in this neck of thewoods. As you can see from the chart below, Carpetright has been trading at its cheapest since the2008 financial crisis -- bargain! Or maybe not. This trend is particularly evident among
UK retailers - note both Toys 'R' Us and Maplinhave gone into administration in the last 24 hours. This just shows what a lack of innovationcan lead to in a very competitive market, which is going through a tough time thanks todisruption and weak consumer demand. This isn't limited to smaller retailers either. Laura Foll, a fund manager at JanusHenderson Investors, highlighted stalwart of the
UK high street M&S. "What we're finding is that those companies that have a high absolute level of yield areoften value traps that don't have much by way of earnings growth," says Henderson's Foll. Foll points to M&S failing to deliver earnings growth despite offering a yield of aroundpercent and a new chief exec coming in. (Kit Rees) ***** IT'S NOT YOU, IT'S ME: HOW STOCK MARKETS THREATEN THE GLOBAL ECONOMY (1110 GMT) What if it's not about how politics or the "real economy " impact markets but the other wayround? Is there a case to view the current uncertainty about the resilience of stock markets asa threat to the global economy? Actually there is, says the Economist Intelligence Unit (EIU) in a report where itidentifies the top 10 risks to the global economy. Number one are stock markets. "There is a risk that share prices will crash in the US, which would lead to contagionaround the world. A prolonged period of decline would pose major risks to our global economicoutlook," the EIU writes. The research and analysis division of The Economist Group argues that the early Februarycorrection triggered by fears that faster than expected inflation could lead to interest ratesrising more quickly than foreseen, "could be the start of a more pronounced downturn". The EIU says that company earnings have strongly benefited from ultra-low interest rates andthe huge stimulus pumped into the economy by the Fed through quantitative easing (QE). "The true impact of QE on company valuations will become known over the next two years asthe Fed gradually unwinds its QE programme and tightens monetary policy." How central banks will fine-tune their path to monetary normalisation and how this willimpact stock markets is "giving rise to significant uncertainty", the EIU concludes. If stocks markets currently seem to pose a threat to the world economy, there's also plentyout there for equity investors to be worried about. Here the EIU's list: (Julien Ponthus) ****
ITALY'S VOTE, THE DAY AFTER: HOW COULD MARKETS REACT? (1028 GMT) A lot has been written about the Italian general election and how markets look quite relaxedabout it. To keep it short, here are two nice charts from Natixis summing up what investors willlook at on the day after the March 4 vote and how would the bond market react. A "narrow grand coalition government" and a "right-wing government" are the only two marketfriendly scenarios and their combined probability of happening stands at 40%. Both would triggera reduction in government bond yields, according to the French bank. (Danilo Masoni) ***** RESULTS DRAG EUROPEAN SHARES, INVESTORS WARM TO
UK DOMESTICS (0852 GMT) We're seeing some big moves early on for European shares, which are down for a third sessionin a row. And the bulk of these falls are earnings-driven, with updates getting either a hot or coldreception, with no middle ground. WPP, Rentokil, Carrefour and Adecco are all down betweena hefty 8 to 12 percent, while equally a slew of
UK firms such as Cobham, Merlin and Howden Joinery are dominating the gainers. So are
UK domestics finally feeling some love? Here's your early morning snapshot: (Kit Rees) ***** PRE-OPEN ROUNDUP: TOIL AND TROUBLE IN EUROPEAN RETAIL Like the weather in the
UK, European shares are going to have a frosty start today withstocks futures down around 0.4 percent. The wounds of February are far from healed no matter howmuch investors want to move on, as equity markets continue to worry about a more hawkish Fed,volatility and rising bond yields. February was the STOXX 600’s worst month since June 2016 (Brexit month!). Today earnings continue to be in focus, in particular in the retail sector after Carrefouryesterday cut its dividend and sounded cautious with its guidance – just shows how much pressurethese supermarket giants are under from the likes of Amazon. Also note that the
UK's Carpetright is in talks with lenders after its profit warning backin January - another sign of stress in the sector. Automated warehouse equipment-maker Kion might have redeemed itself after meeting analystexpectations thanks to higher sales – last October its shares sunk after cutting 2017 guidance(up until then it had been a popular play on automation + tech). Here are your key headlines from this morning: AB InBev reaps profit in
Brazil, sees strong 2018 growth Peugeot hits new earnings record despite Opel loss British ad group WPP to simplify business after tough 2017 Daimler buys Europcar out of car-sharing venture Adecco gets off to slower start in 2018 after Q4 profit beat Utility Suez to boost cost cuts, signs record 1.2 bln contracts
UK's Carpetright in talks with lenders after profit warning Petrofac posts better-than-expected FY core earnings [nL4N1QJ2T2} Beiersdorf gives cautious outlook after strong 2017
New York regulator asks Deutsche, other banks about Kushner loans -source
UK's Carpetright in talks with lenders after profit warning
UK's Howden Joinery posts 7.4 pct rise in full-year revenue Recruiting firm Robert Walters reports 44 pct annual profit jump Madame Tussauds owner Merlin core earnings rise 9.5 pct
UK builder Bovis says volumes will grow in 2018 after profit slump Essilor predicts relatively flat profits ahead of Luxottica deal Kion posts 26 percent rise in operating profit on truck sales (Kit Rees and Tom Pfeiffer) ***** CARREFOUR'S "TOUGH READ" - STILL SOME WAY TO GO? (0726 GMT)
Europe's dominant supermarket chain Carrefour's full-year update after yesterday'smarket close underlines how gloomy it's looking for the sector, hit by heavy pricecompetition and with tech players such as Amazon challenging longstanding business models. Analysts at Jefferies were prepared to see a "tough read" from Carrefour today, saying"nearer-term competitive and fx conditions remain highly volatile" Interestingly, yesterday it's peer Ahold Delhaize saw its shares bounce 3 percentafter reporting results, saying that savings from
U.S. tax reforms could instead be investedinto its online offering. The winner techs all in food retail? (Kit Rees) ***** EUROPEAN STOCKS FUTURES FALL, EARNINGS IN FOCUS (0702 GMT) Even if things are set to be muted at the index level, with stocks futures opening around0.4 percent lower just now, there are plenty of firms giving updates today to keep thingsinteresting - a full list for
Europe is below. Of note are full-year figures from Kion, which was hit hard last October when it cut its2017 profit guidance due to customers delaying investments, so today's release will be closelywatched. BMPS.MI Full Year 2017 Banca Monte dei Paschi di Siena SpA Earnings Release KBHL.CO Q4 2017 Copenhagen Airports A/S Earnings Release BTPP.PA Full Year 2017 Affine RE SA Earnings Release APETIT.HE Q4 2017 Apetit Oyj Earnings Release NHBG.MU Q4 2017 Nebelhornbahn AG Earnings Release TTOG.F Q4 2017 TTL Beteiligungs und Grundbesitz AG Earnings Release SPSN.S Full Year 2017 Swiss Prime Site AG Earnings Release AMPF.MI Q4 2017 Amplifon SpA Earnings Release APME.DE Full Year 2017 Ad Pepper Media International NV Earnings Release IMPN.S Full Year 2017 Implenia AG Earnings Release FNTGn.DE Q4 2017 Freenet AG Earnings Release EVRE.L Full Year 2017 EVRAZ plc Earnings Release KGX.DE Q4 2017 Kion Group AG Earnings Release ARGX.BR Full Year 2017 argenx NV Earnings Release & Q4 Business Update FITBIO.HE Q4 2017 FIT Biotech Oy Earnings Release ESSI.PA Full Year 2017 Essilor International SA Earnings Release RTO.L Full Year 2017 Rentokil Initial PLC Earnings Release SDR.L Full Year 2017 Schroders PLC Earnings Release NEX.L Full Year 2017 National Express Group PLC Earnings Release COB.L Full Year 2017 Cobham PLC Earnings Release HWDN.L Full Year 2017 Howden Joinery Group PLC Earnings Release SYNTS.L Full Year 2017 Synthomer PLC Earnings Release (Kit Rees) ***** EUROPEAN SHARES SEEN OPENING LOWER (0648 GMT) Good morning. Is it going to be a new month and a fresh start? That's looking unlikely. Following on from a weak session in the
U.S. as markets continue to digest Fed ChairPowell's testimony, European shares are seen opening lower, according to financialspreadbetters.
Britain's FTSE 100 is seen opening 42 points lower,
Germany's DAX is expected tofall 87 points and
France's CAC is seen 29 points lower. So it looks like it's going to be a muted start to March, following the STOXX's worst monthsince June 2016. (Kit Rees) (Reporting by Danilo Masoni, Helen Reid, Kit Rees and Julien Ponthus)
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