(Bloomberg) -- Good morning. Here’s what we are watching ahead of the market open in Europe, including some relief after the sell-off, a possible delay in Brexit and London’s housing market.
Thursday was a brutal day for European stocks. Stocks everywhere, really. Futures are pointing a little higher on Friday after the carnage and one area caught up in the bloodbath to keep an eye on is tech. The furor over the arrest of Huawei Technologies Ltd’s CFO continues and particularly notable is that it happened around the same time the respective leaders of China and the U.S. were sitting down to dinner in Argentina. But if recovery mood prevails, look to the influence of U.S. chipmaker Broadcom Inc.’s results, where a good 2019 sales forecast sent its shares higher.
It’s tough to imagine painkillers have been invented that could cure the headache Theresa May must be suffering. The U.K. prime minister is now weighing whether to delay the vote planned for Dec. 11 on her Brexit deal to try to find an agreement to get it through Parliament and avoid a crushing defeat. The only thing that will bring is more uncertainty. Having seen the last of their 21st century gains wiped out Thursday, that’s the last thing U.K. stocks need.
Don’t expect any let up in the volatility of crude prices. OPEC ended talks in Vienna without a deal on production cuts for the first time in nearly five years, in part due to Russia flexing its muscles by refusing to commit to the big output curb Saudi Arabia has been pushing for. Oil is still trading lower today, which may cap any gains made by the European oil and gas stocks sector even if the rest of the market is in a better mood.
Having been bastions of stability in the shadow of Italian turmoil, Germany and France face more uncertain times. Germany’s CDU party will meet in Hamburg to decide who will replace Angela Merkel as leader, deciding between her preferred candidate or one backed by a group of powerful conservatives. In France, in the face of the “Yellow Vest” protests and a plunging approval rating, President Emmanuel Macron is now facing a no-confidence vote from the left. It is extremely unlikely to pass, but demonstrates how uncertainty has seeped beyond Italy and into Europe’s biggest powers.
Berkeley Group Holdings Plc, which reports earnings today, is the most exposed of the U.K.’s big listed homebuilders to the expensive, troubled London market. Look closely at the average selling price of the firm’s homes, the unsold stock and at the general outlook. It should all be taken with a pinch of salt, however, given the path of the U.K.’s entire housing market will be so heavily reliant on the outcome of Brexit, which remains as uncertain as ever.
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