Live Markets: 'Robinhooders' chase Chinese fintechs after Fangdd
11/06/2020 11:48
* European shares slide
* Travel stocks lead decline as virus cases rise
* Lufthansa slumps after job loss warning
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.
'ROBINHOODERS' CHASE CHINESE FINTECHS AFTER FANGDD (1047)
Another day, another mysterious move in the U.S.
Wild bets by U.S. retail traders drove a Chinese fintech stock Jiayin Group JFIN.O as much
as 920% and the volumes were 170x daily average. This stock rose to no. 3 in Robinhood
popularity leaderboard, Tesla was no. 1.
Robinhood is a popular trading app among amateur investors that greets visitors to its
website with the motto "It's Time to Do Money."
The craziness did not stop at Jiayin. Another Chinese firm Wins Finance WINS.O , which got
a delisting warning from Nasdaq last month, jumped as much as 758% before settling at +170%.
It's similar to how these frenzied retail traders piled in to a a little-known Chinese
online real estate company FANGDD DUO.O , which rose as 400% Monday and two-thirds of those
gains disappeared the very next day. urn:newsml:reuters.com:*:nL1N2DO0A6
Will Jiayin see a similar fate? Doesn't look like it.
Shares are up 24% this morning in premarket trade after it reported its first-quarter
results: revenue drops 57% to $44 million, profits shrink to $5.6 million. urn:newsml:reuters.com:*:nGNX4q666w
(Thyagaraju Adinarayan)
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ACTIVITY LEVELS IN THE UK (1028 GMT)
UK activity levels fail to impress despite the easing of some lockdown measures. Looking at
real time data, things seemed in May close to April's activity collapse and the outlook for June
is not promising.
According to Commerzbank, real time data from Google and Open Table suggest that activity in
May was close to levels seen a month earlier "and the indicators for early June are not
promising".
With more shops opened and the easing of social distancing restrictions, data from Google
suggests that visits to shops remain 38% below pre-Corona averages, Commerzbank notes.
Restaurants remain closed, but they can provide takeaway services, yet "UK restaurant
bookings remain extremely depressed compared to a number of other countries," it adds.
In terms of power generation, the UK is currently generating around 10% less electricity
than in the same period a year ago, "a clear evidence that the gap between output in 2019 and
2020 has narrowed," Commerzbank says.
(Joice Alves)
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THE FALLEN CORPORATE APPETITE FOR CAPEX (0952 GMT)
After European governments stepped in with huge spending programmes, you wouldn't expect
Capex to be an issue for companies, but the coronavirus pandemic hit hard corporate investment
appetite with its still unknown impact on the real economy.
A UBS research note estimates a Capex contraction of 7% in 2020 and a modest bounce back of
2% in 2021, but on the assumption that profit margins will recover to above 2019 levels and
close to the 2017/18 peak.
Net balance of firms planning to increase investment fell sharply to -7% in Q2 from +44% in
a survey before the lockdown, with small and medium enterprises reducing their spending plans
the most, the investment bank says.
Spain and France saw sharp declines, while there was "a bit more muted reaction" in Germany,
the strongest economy of the area, and in Italy, "which it came as a surprise," it adds.
Bottom line this year Capex is not going to be a strong theme for equity investors, better
to focus "on public sector fiscal spending".
(Stefano Rebaudo)
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OPENING SNAPSHOT: NEW WAVES OF SELL-OFFS? (0728 GMT)
European stocks are well in the red today after reports of a second wave of contagion in the
U.S., which added to the Fed yesterday's prediction that the U.S. economy will shrink 6.5% in
2020 and unemployment would still be at 9.3% at year's end.
"Investors' worst nightmare becomes reality with news of a second wave of contagion hitting
the wires in the U.S.," writes Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
"Meanwhile, the WHO warned that the persistent rise in Latin America is a cause for
concern," she adds.
The pan European index .STOXX was down 2.5% with the travel and leisure index .SXTP , a
typical gauge of coronavirus fear, 4.6% lower.
Banks .SX7P , autos .SXAP were also around 4% down.
Lufthansa shares were the worst hit and fell to the bottom of the index, after the company
said up to 26,000 employees are at risk of losing their jobs.
(Joice Alves)
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ON THE RADAR: M&A AND COVID-19 WINNERS AND LOSERS (0640 GMT)
European bourses are seen opening in the red after a downbeat economic outlook from the Fed
and some analysts are pointing that signs that there's could be a second wave of infection in
some U.S. cities are also pushing stocks down. urn:newsml:reuters.com:*:nW1N2CX03R
In terms of corporate news, Just Eat Takeaway.com said on Wednesday it agreed to buy U.S.
peer Grubhub for $7.3bn in an all-stock deal that could create the world's largest food delivery
company outside China. urn:newsml:reuters.com:*:nL4N2DN37K
Fiat Chrysler FCHA.MI and Peugeot maker PSA PEUP.PA face a lengthy EU antitrust
investigation after declining to offer concessions to allay EU antitrust concerns about their
planned $50 billion merger.
Generali GASI.MI is exploring strategic options for its Swiss insurance operations,
Bloomberg reported.
Here the coronavirus winners and losers: Lufthansa says up to 26,000 employees are at risk
of losing jobs, and OPAP, Europe's fourth-biggest betting business, reported a 38% drop in
first-quarter profit, while Sweden's medical equipment supplier Arjo expects operating profit to
rise more than 30% in Q2. urn:newsml:reuters.com:*:nL8N2DN6EC urn:newsml:reuters.com:*:nL8N2DN3N6 urn:newsml:reuters.com:*:nL8N2DO0MZ
Other news: Nokia plans to replace CFO in management revamp, Fiat and PSA $50 bln merger
faces lengthy EU antitrust probe, while Sanofi is upbeat on Dupixent product opportunities,
which is used to treat eczema and Ocado plans to raise 1 bln pounds in equity and bond issue
urn:newsml:reuters.com:*:nL8N2DO0NY urn:newsml:reuters.com:*:nASN0007VI urn:newsml:reuters.com:*:nL1N2DN1O1 urn:newsml:reuters.com:*:nASN0007VD
(Joice Alves and Stefano Rebaudo)
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MORNING CALL: STOCK RALLY PAUSES ON FED'S OUTLOOK (0535 GMT)
European shares are seen open lower this morning after a downbeat economic outlook from the
Fed, which signalled it plans years of extraordinary support for an economy deeply struggling
with the coronavirus pandemic.
The Fed predicted yesterday that the U.S. economy will shrink 6.5% in 2020 and unemployment
would still be at 9.3% at year's end. urn:newsml:reuters.com:*:nW1N2CX03R
The outlook, a challenge to the stock market's recent optimism, pushed down Asian shares
while bonds rallied.
In Europe, financial spreadbetters at IG expect London's FTSE to open 97 points lower at
6,232, Frankfurt's DAX to open 173 points down at 12,357 and Paris' CAC to open 73 points lower
at 4,981.
(Joice Alves)
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