Here’s What to Watch in European Stocks This Morning

(Bloomberg) -- Good morning. Here’s what we’re watching ahead of the market open in Europe, including…

Black Gold and Regular Gold

Oil is on track to deliver its biggest weekly gain in two years, making a positive start to the new year thanks to traders now believing that OPEC cuts will be enough and that trade tensions between the U.S. and China may be abating. Here are the biggest winners and losers from the spending revival in offshore oil. But don’t forget gold either. The yellow metal has restored its place as a haven from market storms, and Goldman Sachs analysts say it will climb to levels not seen for five years.


For now, the U.S. government shutdown has not proved a huge issue for financial markets. But the longer it goes on, the more of a risk it becomes. President Donald Trump denied reports that he slammed a table and stormed out of a meeting on ending the shutdown this week, saying he just got up, ``politely said bye-bye’’ and left. He’s now examining using emergency funding to build the wall on the Mexican border, but the key takeaway from this week is that signs of compromise have been thin to non-existent, so this risk could run for a while yet.

Battered Autos

Volkswagen AG is going to update the market and given the trade war backdrop and the battering auto stocks took in 2018, both a backward look at how it fared and a forward look at how it sees the situation progressing will be closely watched. Be aware too of Hella GmbH, the German auto-parts player, which said sales growth will be at the lower end of its forecast range. Auto makers got hit hard last year but not as hard as the parts supplier sub-sector, which was peppered with profit warnings. Most of the misery may be priced in, but be prepared for surprises.

Luxury Mood

Cie Financiere Richemont SA, the company responsible for Cartier jewelry and Mont Blanc pens, has provided the first insight into how luxury sales held up over Christmas and its results look right in line with expectations. The Swiss group is tilted more to watches and jewelry than fashion-heavy peers like LVMH Moet Hennessy Louis Vuitton SE and Kering SA, so it’s never a completely clean read-across to the rest of the sector. But the mood in Richemont’s markets and its outlook for sales, particularly in the crucial Chinese market, will be important in setting the tone for the updates from the sector still to come.

Department Store Coup

Mike Ashley, the oft-controversial founder and boss at Sports Direct International Plc, made a big move on Thursday to lead the ouster of Debenhams Plc’s chairman and chief executive from the board. Ashley has built a big stake in Debenhams, one of the worst performing stocks in the U.K. last year, and attention will now turn to what his plans may be. After picking up House of Fraser, a collapsed department store rival to Debenhams, speculation about Ashley’s intentions for Debenhams will be flying.

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