* European shares open lower: STOXX down 0.1%
* Carrefour down 6% as Couche-Tard drops takeover plan
* Oil stocks among leading losers, tech up
* Wall Street closed for Martin Luther King day
Jan 18 - 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
INVESTMENT BANKS: NO BONANZA IN 2021 (0956 GMT)
The investment banking boom that fed on last year's
extremes is unlikely to repeat itself and even though January
has started on a solid footing, it looks like the party of last
year's bonanza is over.
"While we believe it is too early in the quarter to make a
conclusion on Q1, banks generally highlighted that trading
activity in Jan has started strongly but a normalization of IB
revenues in 2021 is expected," said JPMorgan analysts.
According to JPM, IB revenues in 2021 are expected to fall
18% versus last year, as you see in the table below, while
against the more 'normal' 2019, they should see a gain
On Friday banks were the biggest drag on the S&P 500 with
shares in Wells Fargo, JPMorgan and Citi
all tumbling despite better-than-expected Q4 profits.
(Danilo Masoni)
*****
A CARREFOUR DOWNER AT THE OPEN (0851 GMT)
It was to be expected but the French government's resounding
"non" to the Canadian takeover offer for Carrefour is taking its
toll on the shares of the supermarket operator this morning.
Carrefour is the worst performing stock across the
pan-European STOXX 600 with a fall of over 6%.
It's fair to say that this isn't doing much for the general
mood which was already fairly lacklustre.
Half an hour into trading, most regional bourses are down
between 0.1% and 0.5%.
Energy stocks are not surprisingly dragging the market due
to retreating oil prices.
On the bright side, a rating upgrade from Goldman Sachs has
given a boost to Infineon, up 3.4% and the rest of the tech
sector which is up 0.9%.
Here's Carrefour share price going back down to where it was
before Canada's Alimentation Couche-Tard's approach:
(Julien Ponthus)
*****
WALL OF DOUBTS (0812 GMT)
The narrative of the reflation trade lifting world markets
seems to be fizzling out and much like (recently deceased) music
producer Phil Spector's "Wall of Sound" that layered pop and
classical instruments to create a lush overall sound, many
risk-off noises are rising in the background.
China's economy roared ahead at a better-than-expected 2.3%
last year and expanded in Q4 at 6.5%, while industrial output
grew 7.3% in December. But if the data gave some legs to copper
and aluminium prices and lifted Chinese markets, the surging
virus caseload is tempering the cheer; even in China, 28 million
people are under lockdown.
Nor has the data entirely dissipated the gloom from Friday's
dismal U.S. retail sales figures, keeping U.S. and European
equity futures in the red and the dollar just off one-month
highs.
All that's taken U.S. 10-year yields US10YT=RR from 1.187%
to 1.087%, while oil prices have fallen from 11-month highs hit
last week.
It's a public holiday in the United States but there is no
shortage of action elsewhere. In M&A news, Couche-Tard and
Carrefour now plan to explore "partnership opportunities",
Chrysler and PSA sealed a merger to create Stellantis, the
world's fourth-largest auto maker while Dutch paintmaker Akzo
Nobel bidding for Finnish rival Tikkurila.
Finally, quite a bit to chew on politically this week.
Besides Joe's Biden's inauguration on Wednesday, Armin Laschet's
election to lead Germany's main ruling party will be a relief to
markets, given he is expected to continue Merkel's pro-European
agenda.
Italy's ruling coalition faces two days of parliamentary
votes that will decide whether it can cling to power. Even with
the ECB standing behind Italy, government bond yields are
inching higher in trepidation.
Key developments that should provide more direction to markets
on Monday:
-Janet Yellen expected to affirm Biden doesn't want weaker
dollar
-White knight emerges in Suez/Veolia takeover battle
-French major Total buys 20% stake in India's Adani Green Energy
-Trump administration notified Huawei suppliers, including
chipmaker Intel, it is revoking certain licenses to sell to the
company, Reuters reported.
-Eurozone finmins meet to discuss global role of euro
-Deliveroo has raised $180 million from existing investors,
including Amazon, valuing the business at more than $7 billion.
-British telecoms operator BT is facing a claim for almost 600
million pounds ($800 million) lodged by a consumer campaign
group,
-Philly Fed non-manufacturing survey
(Julien Ponthus and Sujata Rao)
*****
CHINA ISN'T ENOUGH (0637 GMT)
A better than expected Q4 for China's GDP lifted blue chips
in Shanghai overnight but there's little chance that the
optimism will travel as far as Europe.
Futures for the old continent are currently trading about
0.3% in the red and retreating oil prices show there is an
overall risk-off mood at the moment.
No help will come from Wall Street today which is be closed
for a holiday.
Not that the news flow is particularly good on that side of
the Atlantic anyway: Friday's U.S. retail sales were
disappointing, tensions run high ahead of Biden's inauguration
and the pandemic is far from being under control.
(Julien Ponthus)
*****
(Julien Ponthus)
*****