LIVE MARKETS What Apple buys from you in Europe

  • The STOXX reaches a 2nd consecutive record
  • London makes up for it after a public holiday
  • Travel and Leisure actions shine
  • Future rise of Wall Street

January 4 – Welcome home for real-time market coverage presented by Reuters reporters. You can share your thoughts with us at market.research@thomsonreuters.com

WHAT APPLE PURCHASES YOU IN EUROPE (1332 GMT)

Apple hitting the $ 3 trillion mark is another reminder of how Europe has missed the big tech boom over the past decade.

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European stock markets have little to offer FAANG-focused investors and, as a result, are eclipsed by those of Alphabet, Amazon and of course Apple.

None of the European national references, by adding up all their constituents, is worth as much as the giant with its headquarters in Cupertino.

As you can see below, the 100 companies that make up London’s FTSE 100 are worth less overall than the iPhone maker.

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Now, looking at the main European index, the STOXX50, it would take 13 of its main components to match Apple’s value:

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Another way to look at Apple’s immense wealth is to compare it to the debt of a large eurozone country like France.

As you can see in the following graph, Apple’s $ 3 trillion value represents all of France’s 2020 debt:

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(Julien Ponthus and Saikat Chatterjee)

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REAL ESTATE EQUITIES IN THE UNITED KINGDOM UP TO 2015 LEVEL (12:30 GMT)

London-listed real estate stocks are at their highest level in several years as Omicron’s impact on the industry will be less severe than initially feared.

London real estate companies FTSE 350 (.FTUB3510) hit their highest level since October 2015, with housewife Hammerson’s shares jumping 5%.

Here are the top performers:

Real estate FTSE 350

Even data from the Bank of England, showing that UK mortgage approvals in November were the lowest since June 2020, didn’t spoil the party.

The BoE said mortgage lending rose by a net £ 3.693 billion, from £ 1.149 billion in October after stamp duty relief expired in late September.

But the November increase was nearly £ 3 billion below the average in the 12 months leading up to June, when the tax break was in full force, the BoE said, suggesting slowing market demand. housing. Read more

(Joice Alves)

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OMICRON FEAR AND GREEN TASKS (12:18 GMT)

The European Travel & Leisure Index shows no signs of slowing down and even gradually accelerated during morning trading to reach a rise of 3.5%, which would be its fourth best performance in the past 12 months.

That obviously says a lot about what investors think about Omicron right now and how big a threat it poses to the economy going forward.

“Gains for oil companies, airlines, and hotel, pub and restaurant operators reflect less investor concern over the Omicron variant of Covid-19 in hopes it will be milder , even more transferable, “summarized Russ Mold, director of investments at AJ Bell.

Hargreaves Lansdown analyst Susannah Streeter also felt there was potentially a lot of pent-up demand.

“With so many short-term people forced into self-isolation at home, it’s likely that many people will spend the next few weeks scouring travel blogs for inspiration, given that there is so much desperation. for a vacation, ”she added, noting that other stocks, like theater operators, were also on the rise.

But there is another indicator that investors are looking to gauge the waves of fear and greed unleashed by the new variant and that is the yen, which has fallen to its lowest level in five years against the dollar.

At 116.14 per dollar, a level not seen since January 2017, it looks like the safe haven currency is a good market indicator of the lack of fear the markets are currently feeling about Omicron.

The rally in bond yields which is accompanied by risk movements is indeed clearly felt on the Japanese currency.

The dollar / yen hit a new 5-year high in the wake of traders reducing their exposure to safe-haven assets and rate differentials widening against the yen, thanks to the Bank of Japan’s strategy which maintains a cap on Japanese yields, ”wrote Marios, an analyst at XM. Hadjikyriacos.

yen

(Julien Ponthus and Elizabeth Howcroft)

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NEW DAY, NEW MILESTONES (09:50 GMT)

Because the STOXX 600 hit an all-time high yesterday, it’s no surprise that a second day of gains across Europe brings new milestones.

Regardless, the pan-European index reached a new record of 493.64 points:

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Ditto for the French CAC 40 which is also on unexplored highs for another session at 7288 points:

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Other sectors also set new records such as industry at 811 points, personal and household goods at 1,118 points, construction and materials at 652 points and food and beverage at 883 points.

But as continental stocks continue to climb, it’s worth noting that London’s FTSE 100, which outperforms today with a 1.2% rise, is still more than 5% off its May 2018 high:

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(Julien Ponthus)

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BLACK AND GRAY SWANS (0909 GMT)

Distressed stocks, a very hawkish Federal Reserve and rising gold prices are some of the surprises markets would do well to focus on in 2022, according to Byron Wien, vice president and Joe Zidle, strategist in Head of Investments in Private Wealth Solutions at private equity giant Blackstone.

Defining a “surprise” as an event to which the average investor would attribute a one in three chance of occurring but which Blackstone’s Wein considers “likely” or having a greater than 50% probability of occurring, he lists 10 surprises that the markets might do well to focus on this year.

Other notable factors include increasingly entrenched inflationary pressures, nuclear alternatives for power generation enter the arena, and ESG initiatives become mainstream as government agencies enforce new regulatory standards on the subject. For a full list see: https://www.blackstone.com/news/press/byron-wien-and-joe-zidle-announce-the-ten-surprises-of-2022/

(Saikat Chatterjee)

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LONDON TAKES OFF WITH TRAVEL AND LEISURE (0832 GMT)

UK travel and leisure stocks are shining this morning and are the clear leaders in the pan-European STOXX 600.

BA owners, IAG, Ryanair, Wizz Air and TUI are up around 6% to 8.5% and take the sector to a 2.7% rise in early trading.

There is certainly some optimism in the air that Omicron will not pose a long-term threat to the economic recovery.

London, which was closed for a public holiday yesterday, caught up with the overnight rally and the FTSE 100 up 1.1%, about twice the speed of the STOXX 600’s 0.5% gain.

Optimism for the New Year is well distributed across all industries. Energy, mining, banking, autos and retail all increased by more than 1%.

Here is how the Travel and Leisure sector is doing this morning:

travel and leisure

(Julien Ponthus with Tommy Lund)

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CELEBRATE AS IF IT IS 2022 (0756 GMT)

While many New Years celebrations across the world have been scaled back or canceled due to the surge in the Omicron coronavirus variant, the financial markets threw their own party on the first trading day of 2022.

A new record was set for the pan-European STOXX 600 on Monday and on Wall Street the S&P 500 (.SPX) and Dow Jones (.DJI) closed at all-time highs.

The euphoria surrounding stocks was best captured by Apple (AAPL.O) reaching $ 3 trillion in market cap, which is well above the combined value, for example, of all blue chips listed on the London FTSE 100 (.FTSE).

US Treasury yields also surged, as optimism for the economic recovery prompted some investors to prepare for interest rate hikes earlier than expected by the Federal Reserve.

U.S. 2-year bond yields, sensitive to rate hike expectations, hit their highest level since March 2020, when the pandemic sparked market turmoil. Read more

Other asset classes also benefited from the mood at risk, such as oil, which rose in hopes of new demand despite OPEC + appearing ready to accept a further increase in production. . Read more

Simply put, there is a bullish consensus that the unprecedented wave of COVID-19 infections will not derail the global recovery and that vaccines will prevent the need for strict lockdowns.

Of course, this account can be taken as a leap of faith in the supposedly gentler nature of Omicron and that other factors at play, such as inflation, a political mistake, or politics suddenly fail to make. rock the boat.

In the meantime, Asian stocks were bullish on Tuesday and European and US equity futures point to another session of gains.

China Evergrande shares jumped 10% as trading resumed after the developer said a government order to demolish 39 buildings on the resort island of Hainan would not affect the rest of its project there. -low. Read more

And data showing Chinese factory activity grew at its fastest pace in six months in December and German sales surged unexpectedly in November could fuel further optimism.

Key developments that should give more direction to the markets on Tuesday:

–Retail sales rebound in Germany in November read more

–Switzerland, France CPI data

–Mortgage data UK

–Oil prices on the rise ahead of OPEC production policy meeting + Read more

Apple’s soaring stock market value

(Julien Ponthus)

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LONDON READY TO CALL (0747 GMT)

The London Stock Exchange was on holiday yesterday and therefore missed the New Year’s Eve in global markets.

It looks like there has been a lot of development in Fomo and investors are ready to catch up.

Futures for the FTSE 100 are currently up over 1%.

Other European stock markets should nevertheless record a second consecutive session of gains, but with increases limited to around 0.5%.

Same trend for US futures which are currently pointing to another day or Wall Street records.

(Julien Ponthus)

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Mary I. Bruner