Here’s What to Watch in European Stocks This Morning - EcoFinBiz Blog

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Here’s What to Watch in European Stocks This Morning

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(Bloomberg) -- Good morning. Here’s what we are watching ahead of the market open in Europe:

Hopes Fading

The pound slipped in Asian trading as senior ministers in the U.K. appear no closer to signing off on Prime Minister Theresa May’s plan for leaving the European Union. Even if May’s Cabinet approve the deal, pro-leave members of her Conservative party, as well as the Northern Irish Democratic Unionist Party, which props up the minority government, have threatened to reject it in Parliament. There’s also speculation that more ministerial resignations could follow that of Jo Johnson on Friday.

Funeral Price War

While global markets fret over tariff wars, in the U.K., there’s a funeral price war, and the sector’s only publicly traded company, Dignity Plc, will update the market this morning on what impact the episode is having on its earnings. Dignity’s stock is down 43 percent this year after it announced huge price cuts aimed at helping it compete with its biggest rival, Co-Operative Funerals Ltd. In a damning report in June, the U.K. competition regulator estimated that people on the lowest incomes can spend up to one third of their annual income on a funeral. No surprise then that Dignity says the bereaved are increasingly shopping around online.

Italy Nail-Biting

Italy’s government has until tomorrow to submit a revised budget after its recent proposal was lambasted by the European Commission. Rome says it won’t budge, sticking to its plan to boost benefit spending, cut taxes and lower the retirement age, despite the commission’s warnings over its implications for the country’s budget. The EU may be forced to start disciplinary proceedings against the country, officials told Bloomberg.

READ: Stocks Meander as Investors Pause; Pound Slips: Markets Wrap

Volatility Victors

When volatility spikes, exchanges do more business, as investors rush to close out trades or seek to make profits from big market movements. This morning we’ll get third-quarter numbers from Euronext NV, which operates the main equity venues in France, the Netherlands and Belgium, among others, and investors may look for any commentary regarding the impact of last month’s wild market moves. Germany’s Deutsche Boerse AG and the U.K.’s London Stock Exchange Group Plc both issued upbeat, albeit undramatic, quarterly reports last month.

Quick Start

The week has barely begun and we’ve already had our first piece of deals news: Europe’s biggest technology company announced its largest acquisition to date. German software company SAP SE agreed to buy Qualtrics International Inc. for $8 billion in cash, in a move that preempts the U.S. company’s plans to go public. Qualtrics makes software for surveying customers and analyzing employee sentiment.

To contact the reporter on this story: Joe Easton in London at jeaston7@bloomberg.net

To contact the editors responsible for this story: Beth Mellor at bmellor@bloomberg.net, Phil Serafino

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