Five Things You Need to Know to Start Your Day
Five Things You Need to Know to Start Your Day
(Bloomberg) --
Good morning. European equity futures are pointing higher after suffering their worst one-day rout for several years, the U.K. prime minister is being accused of bad faith on Brexit and a U.S. activist investor has a financial firm from this region in its sights. Here’s what’s moving markets.
Worst Rout in Years
European shares suffered their biggest plunge Monday since the fallout of the 2016 Brexit vote as investors were jolted by a surge of coronavirus cases in Italy, mostly stemming from an infected man seeking treatment at a hospital in the north of the country a week ago. A combination of bad luck and inadequate safety protocols are being blamed. The spread of the illness outside of China, including in South Korea and Iran, has seen the number of cases worldwide top 80,000. But for now, the World Health Organization isn’t yet calling the outbreak a pandemic.
The Morning After
From a markets perspective, things are looking a little different this morning, with U.S. and European equity futures edging higher and havens like gold and Treasuries retreating. That’s even as more companies warn of a hit to revenue, and amid signs of a fall in all-important Apple Inc. iPhone sales. Some traders say Monday’s slump presents a buying opportunity while also pointing to progress on treatments. And there’s also optimism that central banks will use monetary stimulus to cushion the impact of the illness on economic growth. There wasn’t too much letup for Asian stocks, however, with Chinese shares sliding again.
Brexit Bad Faith
Ministers from European Union nations get together in Brussels today, where they’re expected to sign off on the mandate for negotiations on a U.K. trade deal. France continues to play the role of bad cop, warning British Prime Minister Boris Johnson not to use “blackmail” to secure an agreement ahead of the discussions that are set to begin next week. Those comments came amid reports Johnson’s government is refusing to ask ports to get ready to implement new checks on goods moving between Britain and Northern Ireland, risking inflaming tensions and leaving the PM facing complaints of bad faith.
Prudential Targeted
One of Europe’s largest financial firms has become an activist investor target. U.S. hedge fund Third Point has built a position in U.K. insurer Prudential Plc and plans to push for a separation of its U.S. and Asian businesses. Dan Loeb’s New York based firm has built a position of just under 5% in Prudential, according to a letter sent on Monday. Loeb says Prudential has favored “a sleepy, Euro-centric focus” over the chance to build on earlier successes in the Asia region. Prudential says it looks forward to starting a dialogue.
Coming Up…
Spanish electricity-provider Endesa SA is on this morning’s earnings calendar and Shoprite Holdings Ltd reported an increase its share of the South African grocery market earlier, while football team Manchester United Plc reports later. We’ll also get readings of German gross domestic product and French business confidence, but economic data may carry less weight amid the coronavirus overhang. The Hungarian central bank is seen making no change to its main interest rate.
What We’ve Been Reading
This is what’s caught our eye over the past 24 hours.
- Weinstein convicted of rape in case that sparked #MeToo.
- Former French prime minister, wife to attend "fake job" trial.
- Assange’s own supporters stop him concentrating.
- Pipeline fight is paralyzing parts of Canada’s economy.
- Ban on primary-aged kids heading footballs.
- Huawei’s new MatePad looks a lot like Apple’s iPad Pro.
- `Mission Impossible’ filming halted due to virus.
To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net
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