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:

Brexit Back Down

Theresa May has reportedly backed down from a key Brexit battle in parliament by ditching moves to stop lawmakers attempting to re-write her plans. The move could have a significant impact on the Brexit process, as lawmakers will be free to vote on a series of possible changes to May’s proposed deal, which could include calls for a different agreement or for another referendum. The government and the Bank of England are also due to issue Brexit economic analysis today and May will face Prime Minister’s questions for the first time since the plan was presented. Yet again, Brexit will overshadow everything in the U.K. today.

In the Cloud

U.S. cloud software giant Inc. jumped in extended trading on Tuesday after it delivered a strong revenue forecast and eased investor concerns about growth slowing down in the sector. After a rough few weeks for tech, watch for read-across to Europe’s SAP SE and potentially some good vibes across Europe’s tech sector. Note too that Microsoft Corp., which has benefited enormously from a pivot toward the cloud, took its place as the world’s most valuable company as it vaulted over Apple Inc.

German Brakes

Knorr-Bremse AG, the world’s largest truck and train braking systems manufacturer, offers up its first set of results since going public in October. Shares are a little below the float price, but given the headwinds facing European automotive suppliers and industrial stocks that doesn’t seem like a huge surprise. Watch for the outlook statement on how the group sees the trade threats progressing and whether any impact is yet being seen.

Brits Abroad

If you only look at the results from Thomas Cook Group Plc, which lost nearly a third of its value on Tuesday, you’d think the appetite among U.K. consumers to go abroad was waning. Another good rest of that comes today with On the Beach Group Plc, an online firm which sells cheap beach holidays and which has been growing at a pretty good clip for some time. Note, however, we also had warnings from U.K. airlines that Brexit-driven uncertainty is weighing on bookings, so don’t be surprised if there is a note of caution sounded.

Horlicks Sale

Unilever is said to have entered into exclusive talks to buy the nutrition business of drugmaker GlaxoSmithKline Plc, according to the Financial Times. With earnings season essentially over now, deals like this are likely to take center stage. Note too that Glaxo is said to be close to selling its consumer health-care business to Nestle SA, so keep a very close eye on the U.K. group when the market opens.

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