LIVE MARKETS-Fat and flat

* STOXX 600 falls about 2%

* China's Evergrande default worries weigh

* Miners drop over 5%

* Wall Street well into the red

Sept 20 - 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

FAT AND FLAT (1111 GMT)

Investment returns from equity markets in the post-pandemic
world will be "fat and flat", a new strategy paper by Goldman
Sachs said on Monday.

Breaking down the equity market cycle since 1900, the U.S.
investment bank found there has been three powerful secular
equity market super cycles since World War II: 1945-1968,
1982-2000 and 2009-2020 with each driven by a combination of one
or more of the following factors: very strong growth, falling
interest rates, low starting valuations together with rising
profit margins.

But the post-pandemic economic cycle starts from a position
of record low interest rates, high valuation and high margins,
implying lower longer-term returns than previous economic
regimes though returns is likely to be higher than bonds.

Therefore, the return profile is largely described as "fat
and flat with low but positive aggregate returns over a period
of time but punctuated with large cyclical swings."

"We are now at the opposite end of a 'super cycle', with
record low interest rates and inflation expectations, and high
valuations and margins," a team of strategists led by Peter
Oppenheimer said in a note. "Many of the tailwinds for equity
returns enjoyed in recent decades are unlikely to be repeated
and may even start to reverse to some extent."

Moreover, geopolitical pressures and supply chain
disruptions have increased the trend towards on-shoring rather
than globalisation while U.S. corporate tax rates are set to
rise with progress being made to agree on a global minimum
corporate tax rate, they said.

(Saikat Chatterjee)

*****

MINERS DRAG STOXX 600 TO TWO-MONTH LOW (0911 GMT)

Mining stocks are dragging down the STOXX 600 on a slide in
commodities price after debt troubles at property group China
Evergrande added to concerns about the health of China's
economy.

The basic resources index plummets 4.6% to its
lowest since February, pushing the pan European index
down 1.9% to a two-month low, following the doom and gloom of
Chinese markets.

China consumes some 55 % of global copper and iron ore,
almost 60 % of nickel and some 50 % of lithium.

Luxury stocks are also being heavily hit due to their China
exposure with LVMH down 2.3%, tracking weakness in its Hong Kong
listed peers.

Investors are also watching if major central banks will
start giving cues about tapering their pandemic-era stimulus
programmes at various meetings this week.

Ahead of elections in Germany, the DAX is down
2.1%, touching its lowest level since July.

In terms of single stocks, shares of UK insurer Prudential
fall 7% after the company said it plans to raise HK$22.5
bln ($2.9 bln) through concurrent public offer and international
share placing on Hong Kong Stock Exchange.

(Joice Alves)

*****

WATCH THOSE SPIRALLING GAS PRICES (0709 GMT)

A massive week in monetary policy, with some 16 central
banks holding meetings and possibly the first rate hike from a
developed nation -- Norway. Not to say others will follow any
time soon; the Federal Reserve for instance may strees its own
rate rises remain distant. Others such as Switzerland and Japan
are likely to stay resolutely dovish.

In the meantime, other sagas are focusing investors' minds.
Chinese property developer Evergrande's inexorable journey
towards default is pummelling Hong Kong stocks (mainland markets
are shut) and has taken yields on Chinese junk bonds to 14%, the
highest in almost a decade.

So it's a firmly risk-off on Monday with European and U.S.
equity futures down 1%, following Friday's dismal session when
the S&P 500 plunged nearly to one-month lows and the VIX
volatility gauge surged to a one-month high.

Much of that is, of course, down to concerns for economic
growth and inflation, the debt ceiling wrangling in Congress and
persistently high COVID caseloads.

Which takes us to the other issue of the day -- spiralling
gas prices and the potential impact on inflation.

Already, these have forced some power producers out of
business and shut fertiliser plants in Britain. Knock-on effects
look inevitable, on sectors ranging from slaughter houses to
supermarkets, alongside higher winter heating bills
.

Pressure is growing on authorities -- Britain is planning
measures to shield businesses and consumers and U.S.
manufacturers are urging curbs on liquid gas (LNG) exports.
Politics enters the picture too -- EU lawmakers have demanded
authorities probe Russia's Gazprom for market manipulation
.

Key developments that should provide more direction to markets
on Monday:
-Evergrande's lenders weigh up loan losses, rolling over credit
-Lufthansa $2.5 bln rights issue drags shares down 2.3%
premarket
-UK House prices Rightmove Sept
-German producer prices Aug
-Russia's pro-Putin party wins election majority but loses some
ground
-Canadians vote in dead heat election
- UN General assembly starts (until Sept 24)

(Sujata Rao)

*****

EUROPEAN FUTURES ON THE RED AHEAD OF CENTRAL BANK MEETINGS

European shares seen on the red mirroring Asian shares, with
property developer China Evergrande dragging Hong Kong stocks to
a near one-year low, and ahead of a week packed with global
central bank meetings.

The Fed is expected to lay the groundwork for a tapering at
its policy meeting on Tuesday and Wednesday. Investors will also
have to digest a dozen other central bank meetings including the
UK, Japan, Switzerland, Sweden and Norway.

The Norges Bank is expected to become the first G10 central
bank to lift rates on Thursday.

Elections in Canada and Germany are adding extra uncertainty
this week.

In the UK, British Prime Minister Boris Johnson said the
government will work with gas companies to ensure the consumer's
needs are met amid a surge in natural gas prices, Bloomberg News
reported.

Travel stocks could get a boost after England eased COVID-19
rules for international travellers.

(Joice Alves)

*****

Prudential