* European shares bounce, STOXX ends at month high
* Solid earning updates provide support
* Peugeot , AMS, Edenred (PA:EDEN) lead gains
* Wall Street gains
July 24 - Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters and anchored today by Helen Reid. Reach her on Messenger to share your thoughts on market moves: helen.reid.thomsonreuters.com@reuters.net
CLOSING SNAPSHOT: EUROPEAN STOCKS SNAP LOSING STREAK (1537 GMT)
European stocks have staged a comeback this session, ending at their highest level in more than a month as strong earnings reports trump any concerns over global trade.
Here's your provisional closing snapshot:
(Kit Rees)
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EUROPEAN AUTOS? "THERE IS A SIZEABLE CHANCE THE U.S. WILL IMPOSE TARIFFS" (1512 GMT)
Auto stocks are among the leading gainers today, up 2.7 percent, and it looks that worries over possible U.S. tariffs are something quite far away.
True there's been market talk this week that there could be a sort of compromise when the European Commission's Jean-Claude Juncker visits the White House on Wednesday, but Credit Suisse (SIX:CSGN) remains highly cautious.
Following a North American roadshow with Ralf Diemer, head of the Brussels office of the German Car Association, analysts at the Swiss investment bank said: "Overall, we come away with a mildly more negative view on tariffs."
"Given that the EC needs to get a mandate to negotiate a trade deal from all member states, we are concerned there might not be enough time to negotiate before the U.S. imposes Trump's tariffs," they said.
"We assume there is a sizeable chance that the U.S. government will impose tariffs on European cars," they add.
(Danilo Masoni)
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MINING STOCKS ON COURSE FOR BEST DAY SINCE TRUMP'S ELECTION (1413 GMT)
Europe's basic resources stocks have just hit a session high, up 4.9 percent and set to seal their strongest day's gains since Trump's election on November 9 2016, when the 'Trumpflation' trade took hold of global markets.
This time it's China, the world's biggest consumer of metals and an engine of industrial growth, which is behind the move: the Chinese cabinet promised more "vigorous" fiscal action to support the economy including cutting taxes for companies and accelerating investment in infrastructure. signs of more stimulus are alleviating concerns about trade tariffs and boosting metals prices in anticipation of greater demand.
Mining giants Glencore (LON:GLEN), ArcelorMittal, Anglo American (LON:AAL), BHP Billiton (LON:BLT) and Rio Tinto (LON:RIO) are leading gains, up 5 to 6 percent. Traders say hopes that the EU will strike a deal with Trump tomorrow on tariffs are also supporting the sector which has been on a downward trajectory since early June.
As you can see below, European miners' forward 12-month EPS expectations have ballooned recently to their highest since November 2012 as the metals cycle recovers and mining companies' balance sheets get healthier.
(Helen Reid)
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SEMICONDUCTOR SUPPLIERS AMONG MOST-SHORTED AHEAD OF RESULTS (1317 GMT)
To be fair, there's quite a mix of stocks in Markit's list of those most-shorted ahead of their earnings reports, but it's striking that two semiconductor equipment makers are in the mix: Germany's Aixtron and Dutch chipmaker supplier ASM International.
Aixtron's shares are up 11.6 percent this year and the company is due to report half year numbers on Thursday, while ASMI's shares are down more than 12 percent and its Q2 results are due tomorrow.
Here's the full list from Markit:
(Kit Rees)
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MIDDAY SNAPSHOT: CYCLICALS POWER STOCKS (1135 GMT)
The rally is real, fuelled by gains for miners, autos and banks, all sectors which have been bruised by the trade uncertainty.
Over in the U.S. futures are also on the rise, with Alphabet (NASDAQ:GOOGL) in focus after the Google parent's results beat forecasts and have subsequently spurred brokers to upgrade their price targets for the stock.
Here's your midday snapshot:
(Kit Rees)
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ITALY: STORMY SKIES AHEAD, DON'T GET COMPLACENT (1118 GMT)
According to GS, Italy's troubles are by no means over, despite stocks and bonds recovering pretty convincingly over the past weeks.
Although Italian stocks are up 0.8 percent today, tremors in the FTSE MIB on Friday as Italy's coalition looked fragile are testament to investors' still cautious outlook for the country. period of more positive performance of Italian assets is more likely to reverse than to extend," analysts at the U.S. bank write.
Their reasons:
- lower GDP growth;
- 2019 budget law which could include fiscal easing of 1-1.5 percent of GDP;
- a "high" risk of elections in the first half of 2019 if coalition tensions continue.
"Even though some compromise is likely to be found such that government can pass a budget law and thus remain in office for the time being, these tensions give grounds for near-term concern and are a timely reminder that there are no grounds for complacency on the Italian outlook," write GS analysts led by Silvia Ardagna.
They note that while foreign investors have cut down on their Italian government bond holdings, they're still a pretty significant chunk of the ownership:
(Helen Reid)
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LUXURY STOCKS COULD DROP 30 PCT IN TRADE WAR, SAYS UBS (1034 GMT)
It's a bleak prognosis but UBS' analysts say that European luxury stocks could fall as much as 30 percent in a full-on trade war.
Their worst case trade war scenario is one where around 100bps is wiped off global GDP growth and global equities drop more than 20 percent.
"This trade war is unlikely to have much first-order impact (sector production is largely in Europe, and pricing power is high), but demand is highly dependent on wealth effects, and the U.S. and China are key markets," UBS analysts say in a note, adding that the two regions account for around 55 percent of sector sales.
They single out Swatch UHR.S , Burberry BRBY.L and Salvatore Ferragamo SFER.MI as stocks most at risk.
Below is UBS' chart showing the correlation between luxury sales growth with global GDP.
(Kit Rees)
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BANKING ON EARNINGS, ECB TO BOOST EUROPE'S LENDERS (1001 GMT)
UBS is providing welcome news for bank stocks today, and the sector index .SX7P is set for its strongest day in six weeks, with a 1.8 percent gain.
Ahead of results from Deutsche Bank (DE:DBKGn) tomorrow and a slew of Spanish banks Thursday and Friday, the Swiss lender's strong earnings beat is rekindling optimism around the sector.
Banks remain the worst-performing sector in Europe year-to-date, although telecoms are edging closer to it. With earnings revised down into the results season, there's arguably a lower hurdle for banks to beat forecasts, making it more likely for shares to jump after reporting.
Another potential positive catalyst for banks - which have been suffering as a result of interest rate expectations being pushed out - could come on Thursday with the ECB meeting, investors say.
"Should the ECB, as expected, guide the market that they are slightly more hawkish than is currently priced in, banks could see a rebound," notes Edward Park, investment director at Brooks Macdonald.
(Helen Reid)
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EUROPE JUMPS ON U.S., TRADE TALK HOPES (0920 GMT)
European stocks accelerated their gains at 9:30 London time, with the STOXX 600 hitting a five-week high, now up 0.9 percent and the DAX climbing 1.4 percent - eyeing its strongest day in nearly six weeks.
A few traders told us the driver was gains in U.S. stock futures, which start reliably trading around that time. U.S. stocks are set for a strong open thanks to Alphabet's stellar results overnight.
Traders are also pointing to this tweet from EU Trade Commissioner Cecilia Malmstrom as boosting markets, driving optimism ahead of talks on trade with Trump tomorrow in Washington.
(Helen Reid)
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STOXX SET TO SNAP LOSING STREAK (0715 GMT)
Solid earnings updates from companies such as car maker Peugeot PEUP.PA , bank UBS UBSG.S and paper maker UPM UPM.HE are giving European shares a welcome boost this morning, sending the STOXX 600 up 0.4 percent, on track to snap a three-day losing streak.
In sectors, export-oriented autos .SXAP , recently penalised by worries over a possible trade war, are leading gains, followed by basic materials .SXPP rising as metal prices bounce back, while banks .SX7P and tech .SX8P are also seeing good gains. Declines in energy shares are the main drag to Britain's FTSE 100 .FTSE .
Here's your snapshot:
(Danilo Masoni)
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WHAT'S ON THE RADAR FOR THE EUROPEAN OPEN (0644 GMT)
European stocks are set to bounce after three days in the red, thanks to a tonic of strong results from the tech sector as well as French carmaker PSA and Swiss bank UBS. Futures across European benchmarks are up 0.4 to 0.6 percent as earnings delivered their hoped-for support to the market.
Tech is likely to be the key driver after Google parent Alphabet beat forecasts overnight, sending Asian tech stocks higher. On the European front chipmaker and iPhone supplier AMS struck an upbeat tone in its earnings outlook, and is indicated up 3 to 5 percent at the open.
French carmaker PSA kicks off a heavy week for auto earnings in Europe, with a strong earnings beat after the newly acquired Opel-Vauxhall business returned to profit.
Auto earnings are particularly under scrutiny this quarter after the shares were dented by U.S. import tariff threats, but PSA is set for a bounce of 7 to 10 percent after results according to pre-market indications.
Another unloved sector this year, banking stocks, could also see a boost after Swiss bank UBS beat analyst expectations with a net profit of 1.3 billion Swiss francs. Its shares are seen rising 2 to 3 percent.
On trade war watch, aluminium producer Norsk Hydro provided an interesting look at how steel tariffs are impacting the industry. The Norwegian company said it saw a bigger global aluminium deficit in 2018 with market uncertainty due to U.S. tariffs and sanctions on Rusal continuing.
(Helen Reid)
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EARNINGS AND TECH TONIC BOOSTS EUROPEAN FUTURES (0611 GMT)
Looks like European stocks are in for a bounce after three days of falls, with earnings delivering the hoped-for effect, bolstering confidence in equity markets thanks to a strong showing from Alphabet and some Europe-based beats too.
As we head into the last week of July, analysts warn sluggish summer markets can drive volatility.
"Markets flows have already lightened as the usual summer slowdown takes effect," notes Societe Generale (PA:SOGN). "This has exaggerated moves but may equally discourage position taking."
(Helen Reid)
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EARNINGS ROUNDUP: UBS, PSA, AMS AND MORE (0549 GMT)
It's a mixed bag of results today as the heaviest earnings week continues: Swiss bank UBS, French car manufacturer PSA, chipmaker AMS, chocolate maker Lindt & Spruengli and tyre manufacturer Michelin (PA:MICP) among the biggest names.
UBS posts Q2 net profit of 1.3 bln Sfr, beats poll posts profit gain as Opel turnaround takes root confirms FY outlook after H1 organic growth accelerates posts flat H1 results as it waits on Essilor merger posts profit gain despite currency setbacks AMS posts Q2 operating loss but spreads optimism for rest of year staffing company Randstad posts Q2 earnings above expectations company Edenred eyes higher annual profits after strong H1 expects positive earnings trend to continue hearing aid maker Amplifon to buy Gaes Group for $617 million posts flat H1 results as it waits on Essilor merger manager Duesmann to become new Audi CEO - Handelsblatt Reid)
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MORNING CALL: EUROPEAN SHARES TO CLIMB ON ASIA, TECH STRENGTH (0534 GMT)
European stocks are set to bounce back from yesterday's weak session, thanks to gains overnight in Asian markets and strong results from tech giant Alphabet. FTSE 100 is expected to open 3 points higher at 7,681, the DAX is seen opening 59 points higher at 12,620 and the CAC 40 is expected to rise 6 points to 5,404, according to spreadbetters CMC Markets.
Manufacturing and services PMIs are expected from France and Germany, with investors watching for a potential World Cup boost and signs the slowing pace of Europe's expansion was just a blip.
Tech is likely to be a focus today after Google parent Alphabet beat profit estimates and Austrian semiconductor maker - and iPhone supplier - AMS also reported overnight, striking an upbeat tone for the second half of the year. Reid)
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http://reut.rs/2y3Bc4f futures july 24
https://reut.rs/2LlIMha opening
https://reut.rs/2JQYwD5 Malmstrom Tweet July 24
https://reut.rs/2Lu0EWt bank earnings revisions July 24
https://reut.rs/2JQcEMX Luxury sector sales, GDP (-UBS)
https://reut.rs/2LynQ5K Italian securities foreign holdings july 24 GS
https://reut.rs/2JOZdwX Midday snapshot
https://reut.rs/2mCF1Ff Markit's most-shorted
https://reut.rs/2JPa8GP Miners earnings to recover July 24
https://reut.rs/2JUIAQe Closing snapshot
https://reut.rs/2LEC30W
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