Live Markets: U.S. tax hike less likely: a boon for Europe Inc too

Investor AB

05/11/2020 10:08

* European shares open higher led by tech 
    * Strong Q3 earnings reports also help
    * Bank of England ramps up stimulus
    * Wall Street futures point to more gains

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    U.S. TAX HIKE LESS LIKELY: A BOON FOR EUROPE INC TOO (0957 GMT)
    A gridlock in Washington with Biden president and Republicans retaining the Senate is a
scenario that's becoming more likely and equity investors are starting to appreciate the lower
likelihood of business unfriendly policy.
    And the possible benefits for corporates, especially on the tax front, are going to be felt
on both sides of the pond.
     "President Trump cut the U.S. corporation tax rate from 35% to 21%. The Democrats were
intending to raise it back to 28%. That prospect now seems less likely, which should help U.S.
equities," say Citi strategists. 
    "It should also boost non-US companies with significant US businesses. Their relative
performance has flat-lined recently," they added.
    Several shares in European companies with big presence in the U.S. are doing relatively well
since it emerged that Trump was doing better than expected by the polls.
    In the snapshot you can see today's price moves of a basket of European stocks with high
revenue exposure to North America. The basket, which includes names such as Deutsche Telekom
 DTEGn.DE , UBS  UBSG.S , Roche  ROG.S  and National Grid  NG.L , is courtesy of Citi.    
    (Danilo Masoni)
    ***** 
    
    
    
    OPENING SNAPSHOT: STRONG Q3, TECH RALLY AND MORE UK STIMULUS (0854 GMT)
    European bourses are well in positive territory supported by a batch of positive Q3 results
and more stimulus in the UK as the country starts a second national lockdown. 
    The pan-European STOXX 600  .STOXX  index is up 0.8% to its highest level since Oct. 20,
with the tech sector  .SX8P  leading the gains, up 2.5%.
    Britain's blue chips  .FTSE  are up 0.3% after the Bank of England increased its already
huge bond-buying stimulus by a bigger-than-expected 150 billion pounds to 895 billion pounds.
The BoE kept the bank rate at 0.1%.  urn:newsml:reuters.com:*:nL8N2HR22R
    In terms of single companies, Milan-listed Tenaris  TENR.MI  is set for its best day in 9
years after reporting strong Q3 results, it was last up more than 11%. 
    
    (Joice Alves)
    *****

    
    ON THE RADAR: BANKS Q3, ARCELORMITTAL, SAINSBURY (0746 GMT)
    Looking at futures, it seems like it is going to be a start of the day in the black for
European bourses in a data heavy morning, which also sees investors having to digest a slew of
earnings results.
    There is a mixed batch of banking Q3 results with France's third-biggest listed bank Societe
Generale  SOGN.PA  swinging back to profit, as its equity trading business continued to recover
from a weak start to the year; and Italy's second-biggest bank UniCredit  CRDI.MI  posted much
higher than expected net profit as Europe emerged from lockdowns.  urn:newsml:reuters.com:*:nL8N2HQ70Y urn:newsml:reuters.com:*:nL1N2HR0EA
    In the meantime, Germany's Commerzbank  CBKG.DE  swung to a Q3 loss, as the lender undergoes
a restructuring. urn:newsml:reuters.com:*:nFWN2HR0E4
    ING Groep  INGA.AS , the largest Dutch bank, reported lower than expected pre-tax profit of
1.20 billion euros on declining interest income amid the coronavirus pandemic and said it
intends to cut 1,000 jobs.  urn:newsml:reuters.com:*:nL8N2HR0TR 
    British supermarket group Sainsbury  SBRY.L  also said it could cut 3,500 jobs in a
restructuring.  urn:newsml:reuters.com:*:nL1N2HR0GS
    On a brighter note, ArcelorMittal  MT.AS , the world's largest steelmaker, reported Q3 core
profit above expectations as the easing of lockdowns led to improved demand.  urn:newsml:reuters.com:*:nL1N2HR0F7
   German broadcaster ProSiebenSat.1 Media  PSMGn.DE  returned to profit, and reinstated its FY
guidance. Its shares rose 5.7% in premarket trade.  urn:newsml:reuters.com:*:nL8N2HR1HC
    HeidelbergCement  HEIG.DE , the world's No.2 cement maker, posted a 13% increase in Q3 core
profit, as cost cuts helped it to shrug off the impact of the pandemic and forecast higher
earnings for 2020.  urn:newsml:reuters.com:*:nL8N2HR0Y5
    Siemens Gamesa keeps profit target as Q4 uptick fails to stave off loss.  urn:newsml:reuters.com:*:nL1N2HR0DX
    British insurer RSA's  RSA.L  underwriting profit rose strongly in the first nine months of
2020 due to improvements the company made to its underwriting strategy.  urn:newsml:reuters.com:*:nL8N2HR2DB
    German reinsurance group Munich Re's  MUVGn.DE  net profit declined 77% to 199 million euros
in Q3.  urn:newsml:reuters.com:*:nFWN2HQ1AL
    Staying in Germany, specialty chemicals maker Lanxess  LXSG.DE  narrowed its 2020 core
profit outlook range after the coronavirus pandemic, saying it was seeing a pick up in the auto
industry, with China and the U.S. also providing positive stimuli.  urn:newsml:reuters.com:*:nL1N2HR0DM
    While Lufthansa  LHAG.DE  said it booked a net loss of 2 billion euros in Q3.  urn:newsml:reuters.com:*:nS8N28T040 
    Sunrise Communications  SRCG.S  announced plans to boost its 2020 dividend to 4.55 and 4.65
Swiss francs per share, from 4.4 francs, ahead of the Swiss telecommunications firm's takeover
by Liberty Global  LBTYA.O  that will lead to its delisting.  urn:newsml:reuters.com:*:nL8N2HR0TH
    
    (Joice Alves)
    *****
        
    
 
    
    MORNING CALL: STILL NO U.S. PRESIDENT (0638 GMT) 
    Futures are pointing to gains for European bourses this morning mirroring Asian shares,
which climbed on the prospect that a gridlock in the U.S. Congress will give a boost to some
industries.  urn:newsml:reuters.com:*:nL4N2HR0WI 
    So far, the count shows that Democratic challenger Joe Biden narrowly ahead in key states,
but the risk of a prolonged contested election remains.  urn:newsml:reuters.com:*:nL1N2HQ0VQ
    Back in Europe, it will be a data heavy morning with EZ and UK PMI data due. 
     The Bank of England's November monetary policy decision is also on schedule. The Telegraph
newspaper reported that the central bank is considering a move into negative interest rates.
 urn:newsml:reuters.com:*:nL1N2HQ3VL
    
    (Joice Alves)
    *****
    

    

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