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Here’s What to Watch in European Stocks This Morning

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

May Tries Again

U.K. Prime Minister Theresa May suffered a defeat in the House of Commons on Tuesday through which MPs voted to limit the chance of pushing the U.K. out of the European Union without an agreement. The threat that the country could crash out with no deal is a key part of May’s strategy to get her own accord with the EU passed and she now has five working days to garner support before a meaningful vote next week. Expect the rhetoric to ramp up around the threat of no  deal and calls for a second referendum, all of which should keep uncertainty elevated.

Signals from Trump

U.S. President Donald Trump tweeted that trade talks with China were going ``very well’’ and people familiar with the matter have suggested he is increasingly eager to strike a deal in order to boost the bruised U.S. stock market. The talks continue, so markets will remain on tenterhooks for some substantive updates on how those are going. Meanwhile, the president addressed the nation on Tuesday night and declared a ``crisis’’ at the U.S.-Mexican border. He didn’t provide any new plan for how to break the impasse with Congress over funding for a border wall and end the shutdown of the government. The trade question is more important for markets, but the shutdown is an increasing underlying risk so watch developments as Trump meets with congressional leaders on Wednesday.

British High Street

The cavalcade of U.K. high street names updating on spending over the Christmas period continues apace. J Sainsbury Plc, as it works towards completing its deal to acquire Asda, will be closely watched after rival Wm Morrison Supermarkets Plc and some pretty decent industry data on Tuesday. Tesco Plc  follows with its trading update on Thursday. We’ll also have the recently more vegan-friendly sausage roll merchant Greggs Plc,  discounter B&M European Value Retail SA and fashion retailer Ted Baker Plc, which has its own problems to contend with, to give a fuller picture of the state of the U.K. retail sector over Christmas.

Yet More Chip Misery?

After Samsung Electronics Co.’s sales and profit miss on Tuesday, the mantle returns to Apple Inc. to provide more bleakness to be baked into the semiconductor market. Nikkei reported Apple has asked suppliers to cut iPhone output by around 10 percent, hardly surprising after the sales downgrade the U.S. technology giant issued last week and which so rocked markets. Given the relatively benign reaction to Samsung in the European tech sector on Tuesday, this could provide further proof that much of the bad news is now baked in for the chip industry or perhaps prove the news needed to stop the melt-up.

U.K. House Prices

Brits love talking about house prices and unless the ``Beast from the East’’ comes along and elevates weather to the tips of tongues again, that’s likely to remain the case until at least some degree of certainty on Brexit emerges. Taylor Wimpey Plc, one of the U.K.’s largest housebuilders and which builds home across the country, will provide a good overview of how the appetite to buy a house held up in Britain in a fourth quarter overshadowed by intensified Brexit jitters. As the sector tends to move as a block, watch its rivals for read-across.

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