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:

Talking Again

It took news of just one phone call to stem losses in Asian stocks, as investors reacted to reports that U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He resumed talks on trade on Friday. Equities had been dragged lower by a warning from a relatively unknown Apple Inc. supplier that an unidentified customer had scaled back orders. Traders presumed that Lumentum Holdings Inc. was indeed referring to the world’s largest company. While much of that news came during late in the European session, Apple suppliers in the region might be vulnerable again this morning.

Tinker Taylor

U.K. builder Taylor Wimpey Plc reports third quarter numbers this morning, and while it might be able to sell two-bedroom apartments in London’s King’s Cross for 1.4 million pounds ($1.8 million), its earnings outlook, and that of its peers, has been ravaged by Brexit-related uncertainty. Fears of an economic slowdown have weighed on house prices, while the sector’s labor supply could be hit by a fall in immigration. Also reporting today is fellow FTSE 100 constituent Land Securities Group Plc, which owns the iconic lights at Picadilly Circus in the capital, in addition to a sprawling retail and office property portfolio. Estate agent Foxtons Group Plc also releases a trading update today.


Brexit and the Italian budget saga are two very different situations, but they’re both political risks that don’t appear to be going away. In the U.K., ministers have reached the “endgame” in their quest to secure a divorce deal, Theresa May said in a speech at Guildhall in the City last night. The pound pared some of Monday’s losses as cabinet members worked on a deal overnight, but there is still (yes, still) no confirmed agreement between U.K. lawmakers on the future of the Irish border. Turning to Italy, today is the deadline for Rome to submit a revised budget proposal to the European Union, which wasn’t too keen on its last submission. The EU could potentially now start disciplinary proceedings against the country.

Bruised Bayer

Aspirin and weed killer are an odd combination. But they’re two things made by German conglomerate Bayer AG, whose quarterly numbers are due this morning. While the Leverkusen-based firm’s pharmaceutical unit is expected to have been boosted by a key blood clot treatment, much focus is likely to be on management commentary surrounding litigation, after a recent ruling that the herbicide Roundup, made by Bayer’s recently acquired Monsanto business, contributed to a dying groundskeeper’s cancer. Bayer’s stock has fallen about 32 percent this year, as the saga has unraveled.

Heating On

Companies that keep Britons warm might be in focus this morning after German firm Innogy SE cut some profit targets for its retail and renewable businesses. Innogy is currently reworking an agreement to combine its U.K. retail operation Npower with that of SSE Plc, to create Britain’s second-biggest energy supplier, behind Centrica Plc’s British Gas.

©2018 Bloomberg L.P.