* European shares seen lower at the open
* Trump leads in Florida, but Biden voices confidence
* Euro STOXX 50 futures down 1.5% in volatile trade
* Nasdaq futures higher
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ON OUR RADAR: NO REFLATION TRADE FOR TODAY (0727 GMT)
The U.S. election is too close to call at the moment and
after yesterday's reflationary binge it now looks markets may
have to deal without that type of trade as investors price out
the chances of a clear cut Biden win over Trump.
As a result banks could come under pressure after a two-day
rally and Europe as a whole could underperform tech-heavy Wall
Street, given its higher gearing towards banks and value stocks.
No surprise then that early indications show European
futures falling whereas Nasdaq futures are up around 2%.
"Well there is some unwinding of yesterday’s quite full-on
pro-reflation trade meaning that bond yields are falling and
tech heavy indices are leading... European and Asian markets are
relatively muted in the wider scheme of things," says Chris
Bailey, European strategist at Raymond James in London.
And Ian Williams, economics & strategy research analyst at
Peel Hunt adds: "The 'Democratic sweep' thesis now appears dead,
so the immediate market impact is likely be lower Treasury
yields, and for equity market leadership to remain with quality
growth rather than cyclical value."
Besides that there are some earnings updates to watch.
France's second-biggest listed bank Credit Agricole
reported an 18.5% drop in Q3 profit, in line with
expectations, as strong results in capital market activities
helped soften a blow from bad loans provisions.
BMW said Q3 profit rose almost 10% thanks to
rebounding Chinese demand for luxury cars and it reiterated its
outlook, even as a wave of coronavirus infections continues to
sweep Europe and the United States. Its shares fell 3.5% in
early trade.
Zalando shares were up over 1% in premarket trade
after the German online fashion retailer said it was well
prepared for a second coronavirus wave after it reported
better-than-expected profitability due to an "exceptionally"
strong spring and summer season.
Phone tower operator Cellnex said it was
considering up to 11 billion euros worth of potential
investments and confirmed it expects its bottom line to remain
negative in the coming quarters even as core earnings rise.
Meantime in the UK, retailer Marks & Spencer on
slumped to a H1 loss, the first in its 94 years as a publicly
listed company, after clothing sales were hammered by the
COVID-19 pandemic.
(Danilo Masoni)
*****
EUROPE WAKES UP WITH U.S. ELECTION DOUBTS (0622 GMT)
European stock futures aren't in great shape this morning as
hopes of a clear-cut Biden victory in the U.S. presidential
elections faded overnight with Trump doing better than expected
by the polls, possibly paving the way for a contested election.
Trump took the lead over Biden in the vital battleground of
Florida and other U.S. swing states, but Biden pinned his White
House hopes on Arizona and a "blue wall" of three Rust Belt
states that could take days to count their votes.
European stock futures underperformed U.S. ones but trading
remained pretty volatile, reflecting growing uncertainty.
EuroSTOXX 50 futures were last down 0.2%, DAX
futures were flat and FTSE futures added 0.2%.
A Biden win is viewed as potentially underpinning European
equities because of expectations of a bigger stimulus package
and better trade relations with Washington.
(Danilo Masoni)
*****
Marks & Spencer (MKS)