* European equities drop on doubts over speedy recovery
* Auto makers and insurers leading losses
* UK shares slide as recession worries grow
* Countryside Properties falls to bottom of FTSE 250
Welcome to the home for real-time coverage of European equity markets brought to you by Reuters
stocks reporters. You can share your thoughts Joice Alves (joice.alves@thomsonreuters.com) and
Julien Ponthus (julien.ponthus@thomsonreuters.com) in London and Stefano Rebaudo
(stefano.rebaudo@thomsonreuters.com) in Milan.
SLOWLY BACK OUT THERE (1122 GMT)
Now that some countries are starting to ease restriction measures, are people out and about
across the world?
More people around the world are going to work and shopping but they are not doing much more
than this apparently, for now.
Mobility to the workplace improved from about 55% of pre COVID-19 levels to 68% between late
April and early May, says UBS.
The retail sector has also been busier with mobility increasing from 40% to 60%.
On the other hand, "the pick-up in traffic congestion is not as impressive," the Swiss bank
adds, since people avoid hitting the roads as they are scared of the virus.
UBS analysed mobility in various sectors, traffic congestion and use of public transport in
45 countries. Here are the main findings:
The biggest question mark remains the job market. In the euro zone, concerns over employment
have eased as some countries reopened their economies but the total job listing index for the
four largest European countries hasn't risen. Here the charts by Jefferies:
Energy consumption in the bloc also fails to impress. It picked up a little, but just a
little in the past days, according to Jefferies:
(Joice Alves)
*****
RISK OF FRESH SELLOFF? (1055 GMT)
Stock prices have been sliding for a few days as investors worry about a possible second
wave of coronavirus infections. Some analysts are suggesting you better be super cautious, as
what markets are pricing in at the moment is still being debated.
Investors are taking the view that the easing of lockdowns will continue in the coming weeks
but they aren't ruling out a second wave of infections and potential new restrictive measures
being reimposed intermittently in 2020, according to UBS' Daily Europe.
Since financial markets are not off the hook yet, the Swiss bank shared a list of investment
tips:
- Go for credit, which is supported by the Fed's action and looks cheaper than equity,
considering U.S. stocks are trading at 18.5x p/e on 2021 estimates
- Be selective, diversify and protect against the downside in equities, because new selloffs
cannot be ruled out
- Take advantage of higher volatility with options as put-writing strategies can provide
additional yield.
(Stefano Rebaudo)
*****
OPENING SNAPSHOT: RISK-OFF AND VIRTUAL ROADSHOW (0759 GMT)
European bourses are well in the red as fears COVID-19 is here to stay intensify after WHO
emergencies expert suggested the virus may become endemic. The pan-European index is
falling around 1% with auto sector and travel and leisure leading losses again today.
In terms of single stocks, shares in TeamViewer fell sharply in early trade after private
equity firm Permira offered to sell around 25 million shares of the company.
Meantime, Britain's blue chips are down 1.4% with British Airways' owner ICAG
falling almost 4% to the bottom of the index in a risk-off session. While Hargreaves Lansdown
shares jumped 8% after its Q1 trading update showed the British fund supermarket's
assets under administration was better than market expectations.
Today is also the day when Europe completes its first ever IPO after an all-virtual
roadshow. Shares of Norway's Pexip Holding soared 54% as the video conferencing firm
made its stock market debut.
(Joice Alves)
*****
ON OUR RADAR: TEAMVIEWER, WIRECARD AND AUTO MAKERS (0655 GMT)
European bourses are seen opening in the red as sentiment is pretty grim across global
markets on worries of a second wave of infections.
But, let's start with positive results: Wirecard Q1 was up 26% thanks to boost
from consumer business.
Yet, a new day and a new batch of scrapped dividends: Clariant is scrapping a
regular dividend as it hunkers down to survive the COVID-19 crisis, but it sticks to extra $1
bln payout from asset-sale proceeds.
Fiat Chrysler and Peugeot also said last evening it would not pay
ordinary dividend for 2019 this year.
Shares in TeamViewer seen collapsing after private equity firm Permira offered to
sell around 25 million shares of the company.
Pressure on Lloyd's of London, which said underwriting and investment losses for the global
non-life insurance sector could reach a record $203 billion.
Meanwhile, Sanofi said last evening that it is working with European regulators to
speed up access to a potential coronavirus vaccine in Europe.
(Joice Alves)
******
STOXX 600: A MONTH-LONG BUMPY ROAD TO NOWHERE (0609 GMT)
Exactly a month ago, on Tuesday April 14th, the STOXX 600 ended the day up 0.6% at 333.89
points.
One month later, as we wait for the open, the pan-European index is at 333.93 points.
It sure has been a bumpy road in between but this road has led investors to nowhere.
Which actually isn't a bad thing considering the unprecedented economic damage the pandemic
already has and will inescapably inflict on the European economy.
As you can see on the chart below, there's been three clear phases in the coronavirus crash.
First the collapse: the STOXX 600 fell over 33% from its February 19th highs to hit a bottom
of 284 points at the close on March 16.
The index then went into 17% bear rally which ended on April 14.
While there's a solid belief that markets bottomed out about two months ago, there's also a
growing sense that investors may have somewhat jumped the gun on the V shaped recovery trade.
Anyhow, here's how the last 3 months panned out:
(Julien Ponthus)
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MORNING CALL: NOT MUCH TO LOOK FORWARD TO (0534 GMT)
Sentiment is pretty grim across world markets as the fear that the pandemic is here to stay
grows a bit bigger every day.
Let this sink in: "This virus may become just another endemic virus in our communities, and
this virus may never go away," WHO emergencies expert Mike Ryan told an online briefing
yesterday.
Add that to Powell's warning that the U.S. economy faces an "extended period" of weak
economic growth and the overall picture ain't that pretty.
Talking about the central banker who just brushed off the idea of negative rates, let that
quote from Wednesday's briefing sink in too: "There is a sense, growing sense I think, that the
recovery may come more slowly than we would like".
No wonder then that Wall Street and Asia ended in the red and that European futures are
trading in negative territory, roughly between -0.5% and -1%, this morning.
There just isn't much at the moment to look forward to.
Shorter term, there's a deluge of Q1 report that might help shape the trend of morning
trading, for the better or for the worse.
(Julien Ponthus)
*****
(Reporting by Joice Alves, Julien Ponthus, Stefano Rebaudo and Thyagaraju Adinarayan)
Hargreaves Lansdown (HL.)
