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* European shares cruise higher on trade deal optimism
* STOXX 600 hits fresh July 2015 high, last up 0.3%
* But German industrial output drop adds to recession fears
* China says it agreed with U.S. to cancel tariffs in phases
* Wall Street opens higher
Welcome to the home for real-time coverage of European equity markets brought to you by Reuters
stocks reporters and anchored today by Thyagaraju Adinarayan. Reach him on Messenger to share
your thoughts on market moves: rm://thyagaraju.adinarayan.thomsonreuters.com@reuters.net
CLOSING SNAPSHOT: 9 POINTS IS ALL IT WOULD TAKE (1659 GMT)
9 little points is all it would take to bring the STOXX 600 to its highest level ever and
join Wall Street in the fun of fresh milestones and "record high" headlines.
With upbeat trade optimism lifting stock markets across the planet, it's absolutely possible
this will happen tomorrow (unless writing this just jinxed it!).
At the close, the STOXX 600 was up 0.37% at 406.56 points while its April 15 2015 record,
stands at 415.18 points.
All major regional benchmarks closed higher and apart from Utilities, there wasn't any big
sectoral losers.
(Julien Ponthus)
*****
TWO DECADES OF WALL STREET OUTPERFORMING EUROPE: "AN ILLUSION"(1515 GMT)
Natixis chief economist Patrick Artus makes an interesting argument about the two-decade
long stellar outperformance of Wall Street over Europe, saying it's "an illusion".
An illusion caused by share buybacks in the United States.
Here's his argument in a nutshell.
"A stock market index represents the value of companies per share: when the number of shares
falls, automatically the index rises. Now, the number of shares has fallen in the United States
under the effect of share buybacks, whereas it has risen in the euro zone," he says.
"When we adjust the stock market indices for the number of shares, we find that the adjusted
Euro Stoxx has risen as much as the adjusted S&P since 1998," he adds.
(Danilo Masoni)
*****
ARE UK RETAIL INVESTORS DRIFTING AWAY FROM THE TORIES? (1457 GMT)
The Share Centre surveyed 1,192 of its clients between November 2nd and 6th and found that
Conservatives were the top choice for the Dec 12 general election.
No surprise here: one wouldn't exactly expect UK retail stock investors to massively support
Labour.
What's much more interesting for those who see the winter poll as one of the most
unpredictable in recent history, is that support for the Tories has fallen since 2017.
In a survey conducted ahead of the 2017 elections, Conservatives, Liberal Democrats and
undecided were rated at 64%, 13% and 7% respectively.
The Share Centre's latest data put Boris Johnson's Tories at only 45% with the LibDems at
20% and undecided at 14%.
Also important to note is that while 77% of the survey believe the Conservatives understand
the needs of personal investors best, that figure is down from 83% in 2017.
That year, the consensus view was that Johnson's predecessor, Theresa May, would easily win
her bet of calling a snap election given how far ahead of Labour's Jeremy Corbyn she was in the
polls.
As it turned out, May lost her outright majority and came out considerably weakened from
the poll.
(Julien Ponthus)
*****
SHORTER HOURS (1346 GMT)
Equity trading workers who remain glued to their screens for long hours may be looking
forward to it but a shorter trading day could have its drawbacks.
For exchanges - and no surprise bourse operators are split over the proposed overhaul - and
companies alike.
Markus Huber, trader at City of London Markets, makes the point for both.
"It certainly won't help the LSE to become a more attractive place for companies being
listed or traders to trade on. Competition between exchanges keeps growing as do cost pressures.
Also shorter trading hours might also hurt any chances of future take overs or mergers as the
LSE might not be as competitive as some other exchanges are," he says.
"Shortening trading hours would only makes sense for stocks who suffer a lack of liquidity,
however for large multinational companies who have not multiple listings on other exchanges this
could make them less attractive as an investment," he notes.
But Ben Springett, Head of European Electronic and Program Trading at Jefferies, sees a
number of benefits, on the basis there is a coordinated shortening of the European trading day.
"From a liquidity perspective, compressing a day's trading into a shorter timeframe should
improve efficiency and potentially reduce transaction costs. The overlap with the US market is
most valuable, so any changes would likely be more directed at a later start time," he writes.
Read here for more: Banks, funds propose shorter trading day in Europe, bourses split
(Danilo Masoni)
****
GERMANY: NO FAST REBOUND BUT NO CRASH EITHER (1200 GMT)
No doubt the German industrial output disappointed this morning and the bigger-than-expected
0.6% drop did add to fears that Europe's biggest economy slipped into recession in Q3.
The DAX however managed to carry on and is now comfortably trading at its highest
levels since February 2018, up more than 0.7%. Why is that?
Surely that's mostly due to the trade optimism, but it's also worth noting that the data
doesn't mean the whole German economy is going to crash, even though it dampens hopes of a quick
recovery of its industrial sector that were fuelled by yesterday's promising data on orders.
Let's see what economists had to say: .
ING: "Industrial production disappoints once again, defying any hopes for a quick rebound of
the German economy... a contraction in the third quarter of the entire economy is not yet a
done deal. As so often, it will be the export sector, which decides on the fate of the German
economy".
UniCredit: "A crash in the German economy is unlikely. There are no early warning signals of
such a worst-case scenario. Instead, the story is one about a slight technical recession,
stagnation or lacklustre growth at best".
Below here's the DAX reaching Feb 2018 highs:
(Danilo Masoni)
*****
RESULTS, POSITIVE TRADE HEADLINES HELP EXTEND RALLY (0856 GMT)
European stocks open higher driven by some strong post-earnings moves, while positive noise
from China on "phase one" trade deal is also helping auto and mining stocks.
It's risk-on in Europe with defensive stocks selling off as investors storm back into
cyclicals on positive trade headlines.
The pan-European STOXX 600 index is rising 0.4% and has hit a fresh July 2015 high
this morning with Germany's export-heavy index DAX 30 (+0.7%) fuelling those gains.
Among single stocks, Vestas Wind, Tate & Lyle, ArcelorMittal and
Lufthansa are all rising between 6-9% after reporting results.
(Thyagaraju Adinarayan)
****
TRADE HEADLINES DRIVE FUTURES HIGHER ON BUSY EARNINGS THURSDAY (0756 GMT)
European stocks seem to be heading for a solid open (+0.7%) this morning as headlines from
China on trade negotiations with the U.S. is overshadowing the earnings Thursday storm.
The pan-European STOXX 600 index is all set to scale fresh July 2015 peak.
In earnings, German industrial company Siemens expects global economy to weaken
in the 12 months after reporting a forecast-beating results. German factory data confirms the
downtrend as September output fell more than expected (-0.6%).
In further woes to the sector, the world's largest steelmaker ArcelorMittal warned
of weaker demand in its main U.S. and European markets, but shares are seen opening sharply
higher on better-than-expected results.
On the bright side, we have Lufthansa printing some good earnings numbers,
fuelling the airline's shares (+1.2% premarket).
In dealmaking, LVMH shares in focus after Reuters reports that Tiffany has
asked the French luxury giant to raise its $14.5 billion offer, calling the offer "too low".
In the UK: Rolls Royce is seen falling 4% after profit warning, while Sainsbury's
profit miss is likely to put shares under pressure.
Here are some headlines to digest ahead the open:
Siemens cautions about tougher 2020 after beating Q4 forecasts
UniCredit quarterly profit up, helped by Italian govt bond reduction
Commerzbank Q3 net profit up 35% in Q3, confirming preliminary earnings
ArcelorMittal takes dimmer view of U.S, Europe steel demand
Deutsche Telekom raises earnings guidance
Siemens cautions about tougher 2020 after beating Q4 forecasts
HeidelbergCement confirms outlook after Q3 results
Tiffany asks LVMH to raise its $14.5 billion offer -sources
Persimmon Sees H2 Volumes Greater Than H1, Reflecting Seasonality
G4S Q3 revenue grows, says reviewing proposals for cash business separation
Rolls Royce sees operating profit at lower end on Trent 1000 issue
German finance watchdog approves new AMS bid for Osram
Sainsbury's profit falls 15% after failure of Asda deal
(Thyagaraju Adinarayan)
*****
ANOTHER SUBDUED OPEN FOR EUROPEAN STOCKS? (0647 GMT)
European stocks seem to be heading for another flat open as investors stay on the sidelines
awaiting updates on the impending U.S.-China "phase one" trade deal.
Financial spreadbetters IG expect London's FTSE to open 4 points lower at 7,393, Frankfurt's
DAX to open 8 points lower at 13,172 and Paris' CAC to open 3 points lower at 5,864.
It's earnings Thursday here and so far we've had updates from Commerzbank (profit
+35%), Lufthansa (adjusted EBIT beats forecasts), ArcelorMittal (flags weak
demand in U.S. and Europe) and Siemens (warns about tough year head).
(Thyagaraju Adinarayan)
*****
(Reporting by Danilo Masoni, Joice Alves, Julien Ponthus and Thyagaraju Adinarayan)
