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:

The G-20

The one-on-one meeting between U.S. President Donald Trump and Chinese leader Xi Jinping won’t happen until Saturday, so traders will have to wait until next week to price in the outcome. Note too that Trump canceled a much-anticipated meeting with Russia’s Vladimir Putin. But headlines flowing out of the summit, particularly those focused on trade relations globally, are likely to spark movements in the most sensitive sectors, including autos, tech and mining companies.

Volatile Crude

Any hints in either direction on crude supplies is having an impact on the oil price and on the European oil and gas sector. Again, keep an eye out for anything emanating from the G-20 summit today on this topic that could send prices soaring or plummeting again, particularly from Russia or Saudi Arabia. Worth noting, however, that while it’s on the precipice of slipping into the red, the Stoxx 600 oil and gas sector is still higher this year thanks to the profit boost a higher oil price had provided earlier in 2018. Oil is little changed on Friday morning.

U.S Tech Optimism

After a pretty dour summer for tech stocks, this week has delivered a few bright spots and could help the European tech sector extend the rebound it has seen in recent sessions. After the upbeat forecasts from cloud giant Salesforce.com Inc. earlier in the week had lifted the mood, bullish reports from human resource software maker Workday Inc. and from cybersecurity outfit Palo Alto Networks Inc. could underpin another bounce on Friday.

Less Predictable Path

Federal Reserve Chairman Jerome Powell’s comments earlier in the week took some of the sting out of the release, but the Fed minutes do confirm that it will be a much less predictable rate path ahead for investors to contend with. Watch now for the surprises that are likely to flow in coming months as markets try to get a handle on what the Fed policy plan will look like going into 2019.

Swiss Contingencies

Switzerland will need to decide whether it will have to implement a contingency plan to protect its stock market amid the looming prospect that its exchanges may lose recognition under European Union rules. Temporary equivalence for Swiss stock markets will expire at the end of this year and there are no assurances it will be extended, while the Swiss government set a Dec. 1 target to put a countermeasure into force. Watch for any jitters in the Swiss stock market.

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