Last checked at 
* Major U.S. stock indexes churn near flat line, Nasdaq up
front
* Utilities leads gainers among S&P sectors; materials lag
* Euro STOXX 600 edges higher
* Dollar, gold, crude advance
* US 10-Year Treasury yield ~1.10%
Jan 13 - 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
EUROPEAN STOCKS: UNLOVED FOR THE PAST TWO DECADES, WHAT
ABOUT THE NEXT? (1045 EST/1545 GMT)
While Wall Street and Asian stocks are at all-time highs,
Europe is clearly lagging and has been for the past 20 years.
The old continent's share in the value of global equities
has almost halved over the past two decades, to 17% from over
30%, as per BofA Global Research.
The U.S. bank blames it on the absence of FAANGs, bigger
exposure to cheap sectors like banks and energy, aging
population, pressures from de-globalisation and climate change,
slower GDP growth versus rest of the developed world.
Apparently, Apple sells more watches than the
entire Swiss watch industry, and Cisco's market cap is
more than that of leading telecom service providers in UK,
France, Spain, Italy and Switzerland, combined, according to the
note.
What does the future look like for European investors? BofA
lists a handful of sectors that could shape the markets in the
next decade.
FANGMAN to GRANS: While U.S. remains a FANGMAN
market(Facebook, Amazon, Alphabet,
Microsoft, Apple, Netflix), Europe is
dominated by GRANS (GlaxoSmithKline, Roche,
AstraZeneca, Novartis, Sanofi).
Healthcare has been among the sectors whose markets weightings
have grown in the wake of the pandemic.
CLIMATE ACTION: Eight of the top 10 clean energy companies
by market cap are in Europe, which is also the undisputed leader
of ESG markets.
LUXURY: Luxury companies in Europe are worth more than its
autos sector, while in 2009 they were worth less than one-third;
LVMH is valued more than 4x Daimler, the largest
European carmaker.
GOLDEN AGE FOR EU CLEANTECH: 85% of Europe's electricity is
expected to be from zero-carbon sources by 2030 vs. 57% in 2020;
BofA sees tailwind from economics, policy, funding, tech
innovation and consumer adoption.
Even so, BofA says Europe's pro-cyclical nature and a weak
domestic growth means that European EPS only outperforms during
periods of strong global growth, and it's lack of exposure to
high-growth sectors like technology will drive its structural
underperformance in future.
(Sruthi Shankar)
*****
U.S. STOCKS WAFFLE, THEN HEAD SOUTH (1008 EST/1508 GMT)
Wall Street waffled on Wednesday after the opening bell,
strobing between green then red - but seemed to decide, a
half-hour into the session, to settle in negative territory.
There was little in the way of a catalyst to turn investor
moods sour or sweet. The ongoing vaccine rollout and
expectations for more generous fiscal stimulus from the incoming
Biden administration was again offset by the resurgent pandemic
and the unfolding drama in Washington.
The U.S. House of Representatives is expected to vote for
the second time within 12 months to impeach President Donald
Trump, this time for inciting an insurrection.
That insurrection caught the attention of U.S. Federal
Reserve officials, who said on Tuesday that while concerns about
continued violence pose a risk, but the transition to a new
administration on Jan. 20, and a likely accelerating vaccine
rollout have left them optimistic.
On the economic front, CPI data appeared to confirm tepid
inflation that can keep the Fed's monetary policy accommodative
for the foreseeable future.
In a reversal from Tuesday, economically sensitive small
caps and transports are underperforming the
broader market.
Here's your opening snapshot:
(Stephen Culp)
*****
TECH VS FINANCIALS: COMING BACK TO EARTH (0900 EST/1400 GMT)
After an unprecedented streak of consecutive higher monthly
closes that ended in August of last year, the S&P 500 tech
sector / S&P 500 financial sector ratio has
been coming back to earth.
This, as value took the reins from growth.
Indeed, the tech / financials ratio ended at 5.23 in August,
after having logged 11-straight higher monthly closes. (Click on
chart below)
That's one more month than the 10-month win streak the ratio
recorded into the Nasdaq/tech sector October 2007 top.
It was also this ratio's longest streak of higher monthly closes
using Refinitiv data back to 1989.
Additionally, through August, the ratio ended above its
upper monthly Bollinger Band (BB) for eight straight months
(more than two standard deviations above its 20-month moving
average). That was also its longest such streak going back to
1989. Thus, the ratio appeared especially high on a relative
basis.
With September's downtick, the ratio came back inside the
upper monthly BB, suggesting potential for a more significant
reversal.
Now, at 4.36, the ratio is on track to fall for a 5th
straight month. A continued decline to even just meet the rising
20-month moving average, now around 3.99, would suggest
additional tech underperformance relative to financials, and
with this, likely further growth underperformance vs value.
(Terence Gabriel)
*****
FOR WEDNESDAY'S LIVE MARKETS' POSTS PRIOR TO 0900 EST/1400
GMT - CLICK HERE:
(Terence Gabriel is a Reuters market analyst. The views
expressed are his own)
