Here’s What to Watch in European Stocks This Morning

(Bloomberg) -- Good morning. Here’s what we are watching ahead of the market open in Europe:

FAANGs Fall

Amazon.com Inc. slumped 7 percent in after-hours trading after its forecasts for revenue and operating income in the fourth quarter missed consensus, while fellow FAANG stock Alphabet Inc. slid 4 percent after reporting a second consecutive quarter of sales that fell short of estimates. The Google parent’s results coincided with the publication of a newspaper report on its handling of sexual-misconduct claims against a former executive. Meanwhile, Intel Corp. edged higher after its third quarter numbers topped estimates. Nasdaq futures declined, and could offer a sense of direction in European tech this morning.

Drug Prices

U.S. President Donald Trump proposed cutting what Medicare pays for many costly drugs for cancer and other conditions to match lower prices paid by European countries, in a keenly awaited speech at the Department of Health and Human Services (HHS). The prices charged by drug manufacturers to wholesalers and distributors under the program can be as much as 1.8 times higher than in other countries, HHS said prior to the event. Watch shares of pharmaceutical giants like the U.K.’s AstraZeneca Plc and GlaxoSmithKline Plc, and Switzerland’s Novartis AG and Roche Holding AG, which all earn at least 30 percent of their revenue in North America.

Wells and Mines

Two oil heavyweights are due to update the market before the open, with France’s Total SA and Italy’s Eni SpA reporting third-quarter numbers. Total has already raised its output target twice this year, while Eni has undertaken a ramp-up of several major projects. The sector has outperformed the broader market this year as Brent crude futures -- the major benchmark for European oil markets -- have rallied almost 15 percent. Anglo–Swiss miner and trading firm Glencore Plc also reports, continuing Friday’s commodities theme.

Los Bancos

Spanish banks are reporting earnings following a troublesome few weeks. Alicante-based Banco de Sabadell SA, still reeling from the I.T. meltdown at its TSB unit in the U.K. announced quarterly net income just shy of analyst forecasts. Barcelona’s CaixaBank SA beat consensus. The sector has had a rough 2018, due in part to concern over Spain’s own budget, but also because of the risk of contagion from political uncertainty in Italy and Turkey. The sector tumbled again last week after a court ruling on mortgage-loan taxes. The two biggest Spanish banks, Banco Santander SA and Banco Bilbao Vizcaya Argentaria SA, update next week.

Tumble Dryers

Swedish white goods-maker Electrolux AB reports before the open, having lost about 27 billion kronor ($3 billion) of market cap this year amid what it describes as “a slightly softer market demand outlook” in the Americas and Australia. There could also be a read-across for France’s SEB SA. U.S. rival Whirlpool Corp. rallied on Thursday after its full-year earnings guidance beat the highest estimate given by analysts surveyed by Bloomberg.

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