Here’s What to Watch in European Stocks This Morning

(Bloomberg) -- Good morning. Here’s what we’re watching ahead of the European market open today.

China’s Pledge

The trade talks between the U.S. and China seemed to have made the kind of progress that had been anticipated, with China pledging to buy more U.S. goods. A final deal, however, to entirely remove the uncertainty, will only happen once President Donald Trump and Chinese Premier Xi Jinping meet. China seems to really need the stability. Hundreds of Chinese firms have issued profit warnings this week and the country is still intervening to ease the despair. Keep an eye on cyclical stock sectors sensitive to trade talks for any reaction.

Delaying Tactics

U.K. Prime Minister Theresa May is on a charm offensive with Labour rebels to try  and garner the support she needs to get at least a version of her current Brexit plans through a Parliament which has thus far shown little sign it intends to pass what she has proposed. Yet, though the government has remained steadfast on the current March deadline for leaving, the groundwork seems to be being laid for a delay. Perhaps then civil servants will have time for other things, like a spending review meant to herald the end of austerity.

Deutsche and Danske

The European bank earnings season gets under way proper with two of the worst performers last year, Germany’s Deutsche Bank AG and Denmark’s Danske Bank A/S and amid new regulatory scrutiny for the sector. After the ever-present Commerzbank AG merger chatter emerged once more on Thursday, Deutsche is  already facing plenty of questions on that front along with queries on the continued shrinkage of the business. Danske, meanwhile, will be watched closely for any more updates on the money laundering scandal that marred 2018. Three Spanish lenders – BBVA SA, CaixaBank SA and Banco Sabadell SA –  also are out with results. Beyond banking, watch numbers from Danish insulin giant Novo Nordisk A/S and an update from mining group Glencore Plc.

Growth Concerns

The tone going into the European day may be soured a little by the drop in Inc. shares in late trading in the U.S., owing to concerns about a soft outlook for the  current quarter and worries about a slowdown in India, an increasingly important market for the consumer and retail sectors. And further concerns about growth were sparked by China’s factory PMI data coming in at the lowest in nearly three years, keeping a cap on oil after its best month since 2015.

Coming up…

After the stellar earnings from Royal Dutch Shell Plc and ConocoPhillips on Thursday, we’ll get more from the U.S. oil majors in the shape of Exxon Mobil Corp. and Chevron Corp. Watch too for industrial giant Honeywell Inc. and drug firm Merck & Co. Nonfarm payrolls top the day for economic data and the estimate is 165,000 jobs added, so start gathering the #nfpguesses from colleagues. Add to this manufacturing PMI data from across Europe and from the U.S. and it’ll be another busy day to contend with. 

What We’ve Been Reading

This is what’s caught our eye over the last 24 hours

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