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:

Big Drops

Stocks from New York to Tokyo slumped on a mix of concerns including a potential economic cycle peak and slowdown in corporate earnings growth, as well as the ongoing tightening of monetary policies. Reports of potential bombs being sent to two former U.S. presidents and the New York headquarters of CNN didn’t help sentiment, and the S&P 500 is now little changed for the year. The European futures open will shortly give us an idea of the extent of the damage to be expected in the region this morning.

Big Tech

Microsoft Corp. kicked off this week’s run of large-cap U.S. tech earnings, with Amazon.com, Inc. and Google-parent Alphabet Inc. both due after the market close later Thursday. Microsoft posted another quarter of brisk revenue growth driven by cloud services, and its stock edged higher in after-hours trading. But fellow Nasdaq-100 index member Tesla Inc. stole the limelight, announcing just the third quarter of positive earnings in its history, sending the shares up by about 10 percent. Elsewhere, another semiconductor stock plunged as Advanced Micro Devices Inc. results underwhelmed.

Mad Men

British advertising giant WPP Plc reports third quarter results before the market open, providing an opportunity to shift attention toward turnaround progress under new chief executive Mark Read. Results are expected to show weakness in the U.S., as well as creative advertising in general, although that could be offset by offset by strength in media investment management, analysts said ahead of the release. The report will also be eyed by investors in French rival Publicis Groupe, whose third quarter revenue growth numbers missed consensus last week.

More Beer

The world’s largest brewer Anheuser-Busch InBev NV reported revenue for the third quarter that missed the average analyst estimate this morning and cut its interim dividend in half. Shares of the Budweiser- and Stella Artois-maker had risen on Wednesday following updates from Heineken NV and Carlsberg A/S. The latter raised its 2018 earnings outlook, in part due to Europe’s warm summer weather.

Banks, Banks, Banks

Banks’ results keep coming, with Swiss giant UBS Group AG reporting trading revenue at its corporate and investment bank up 19 percent from a year earlier. Its third-quarter net income beat the highest estimate of analysts surveyed by Bloomberg. U.K.-focused Lloyds Banking Group Plc is also due to release numbers this morning, after challenger Metro Bank Plc showed signs that competition in residential mortgages is putting pressure on margins; meanwhile, the Bank of England’s August base-rate increase has raised the cost of deposits.

Draghi’s Tone

It’s ECB rate decision day, and while eurozone interest-rate setters aren’t expected to make a change this month, the tone of President Mario Draghi’s post-decision speech could, as usual, offer clues over timing of the next policy tightening. The euro fell against the dollar on Wednesday as markets speculated that Draghi will soften his rhetoric somewhat, in response to recent disappointing economic data.

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