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:
Stocks gained in Asia after Donald Trump said he’s aiming for a “great” deal on trade with China. U.S. equities had declined earlier after a report saying the White House is preparing to impose more tariffs on goods from China not already announced, if next month’s talks fail to ease tensions. Watch the European sectors seen most vulnerable to trade tensions, like automakers, miners and semiconductor producers.
U.K. Chancellor Philip Hammond gave bookmakers a double boost in yesterday’s budget announcement, just as markets were closing. Remote gaming duty -- a tax on digital games of chance like roulette -- will be raised to 21 percent from the current 15 percent. That’s below the 25 percent rate predicted by some analysts. He also confirmed that clampdowns on fixed odds betting terminals won’t take effect until October next year, after some campaign groups argued they should be implemented as early as April. Citi analysts expect a “slightly positive share price reaction” on Tuesday. Watch firms like Paddy Power Betfair Plc and William Hill Plc at the open.
Two consumer-staples giants, British firm Reckitt Benckiser Group Plc and Germany’s Beiersdorf AG, report third-quarter numbers before the open. Analysts hope Durex condom and Dettol cleaning product-maker Reckitt will raise its full-year growth forecast again despite less-than-encouraging performance in the U.S. Nivea moisturizer-producer Beiersdorf raised its outlook back in August, but healthy demand for skin-care products could help the company to beat estimates again Tuesday, according to Bloomberg Intelligence. Rival dermatology-products firm L’Oreal reports after the market close in Paris.
Quarterly updates from the world’s biggest oil explorers keep keeping. BP Plc reports before the open, and like both France’s Total SA and Italy’s Eni SpA, which posted numbers last week, analysts expect the U.K. producer to have benefited from the jump in crude oil prices during the period. Refinery investment costs may cut into profit, however. Royal Dutch Shell Plc reports on Thursday and the U.S.’s Exxon Mobil Corp. and Chevron Corp. follow on Friday. BP’s numbers could move the sector this morning.
Europe’s largest listed carmaker, Volkswagen AG, reports third quarter numbers shortly. The sector had its biggest one-day gain since August on Monday after news that China is considering a tax cut to revive its flagging automotive market. VW would be one of the biggest beneficiaries of such a move, given its large market share in the country. The company is unlikely to join BMW and Daimler in issuing a warning on full-year profit today, according to Bloomberg Intelligence, given its strong first half and outperformance in the luxury segment.
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