* European Stoxx 600 flat
* Frankfurt closed for Whit Monday
* Asia shares wary of U.S. inflation
* Bitcoin steadies after Sunday sell-off
May 24 - Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com
HERE ARE THE MOST AND LESS CROWDED STOCKS (1025 GMT)
Following the money is always an effective way to understand what is going on in the financial markets.
So, we can use a UBS weekly analysis about the most overweight and underweight stocks by global active fund managers across different regions and countries.
Here below the top overweight with Visa , Facebook
and Alphabet at the top of the list.
The table below shows the top underweight, which include Apple and Tesla .
Using institutional ownership data by FactSet, UBS forms an active trading portfolio by aggregating positions across global active managers.
They sum up all the holdings, calculate the weights of stocks in this active trading portfolio and they compare them with the relevant index benchmark.
(Stefano Rebaudo)
*****
WHAT'S THE NEXT POSITIVE CATALYST? (0920 GMT)
With European equities unable to break above the record levels they have been hovering at since mid-April, JPMorgan has taken a look at what could help them conquer new ground.
Unsurprisingly perhaps, the next positive catalysts centre around central bank policy in the U.S. and essentially boil down to the preservation of a Goldilocks environment.
"For the next meaningful leg higher in equities the key is that fundamental Growth-Policy sweet spot is reconfirmed, after the uncertainty that was creeping in recently," say strategists at the U.S. bank led by Mislav Matejka.
In this respect and with tapering risks elevated, the U.S. May inflation data release on June 10 and the Fed meeting on June 16 are going to be key for market direction, they say.
"We are likely to get another very high CPI print... Post that though, the core CPI spike could appear to be peaking. Further, the Fed meeting.. is needed to reassure investors that policymakers are unlikely to change course anytime soon".
If that happens and the economy steam on then equities could witness the next leg higher going into year end, JPM concludes.
In the chart you can see how the Euro STOXX 50 benchmark has stalled around 4000 points for more than 1 month, having gained almost 14% since the start of the year.
(Danilo Masoni)
*****
EU PERIPHERY BANKS: LESS TAPERING WORRIES (0858 GMT)
A yield rise is supposed to be good for bank stocks, as it usually improves lenders’ margins besides being a sign of a solid economic outlook.
But a tapering by the European central bank (ECB) works the other way around for EU periphery banks.
It’s a simple mechanism. Tapering by the ECB will widen peripheral spreads as Southern European countries are the ones that benefit more from the ultra-accommodative monetary policy, with an adverse impact on the valuation of banks’ government bond portfolios and on their share price.
This negative correlation between interest rates and share prices will stay in place but will be “somewhat weaker,” Credit Suisse analysts say, mentioning Intesa Sanpaolo and Unicredit .
Both banks are “well-capitalized”, and the “impact of the spread widening on capital, while negative, is unlikely to create a meaningful dent in their respective excess capital stories,” they add.
“Politically, Mr Draghi is offering a much more robust near-term outlook, with limited – in our view – opportunities for instability.”
The holding of Italian/Spanish government debt across our Southern European bank coverage is highest at CaixaBank
and Unicredit and lowest and Santander
, which is Credit Suisse most preferred stock among Southern European bank shares.
The chart shows Unicredit stocks underperforming the European bank Stoxx index , while Santander shares have been outperforming it.
(Stefano Rebaudo)
*****
FTSE, CAC, IBEX ADD UP (0738 GMT)
While a big part of Europe is enjoying a long weekend -- being markets in Austria, Denmark, Norway, Switzerland and Germany on holiday -- the bourses that started regular trading were mostly posting small gains.
The UK's FTSE , the CAC of France and the IBEX in Spain are all up around 0.3% each while a bunch of stocks going ex dividend mean that Italy's FTSE MIB is being left behind with a 0.2% drop.
Activity will likely remain subdued due to the holiday mood but also the lack of any major corporate news that could liven things up. Here's your opening snapshot:
(Danilo Masoni)
*****
BITCOIN AND BELARUS IN THE HEADLINES (0710 GMT)
Taper talk is not going away and nor is Bitcoin volatility. But the global economy continues to steam on and COVID-19 infections are dropping, seemingly having peaked even in India.
So as the last full week of May kicks off, markets don't look eager to move beyond well-trodden trading paths, perhaps reflecting investors' wariness but also holidays in many parts of Europe.
Stock futures in Europe are up and Wall Street too looks set to hold ground after Friday's a mixed show. The dollar is languishing just off three-month lows and, at 1.62%, 10-year U.S. yields are at the midpoint of their 11-week range -- bond investors may keep powder dry ahead of a series of Treasury auctions and Friday's U.S. core PCE inflation reading.
But there are several Fed speakers to look forward to on Monday, most notably Lael Brainard who is due to speak on central bank digital currencies against the backdrop of the bitcoin storm. There is also a virtual CoinDesk gathering, which will feature Ray Dalio and Cathie Wood.
Crypto enthusiasts might hope Wood will be able to soothe crypto markets; remember her prediction last week of bitcoin at $500,000? Currently though, the world's biggest crypto coin is licking its wounds after falling as much as 17% on Sunday.
Cryptocurrency miners, including HashCow and BTC.TOP have halted their China operations after Beijing on Friday vowed further crackdowns on bitcoin mining.
Finally, Belarus dollar bonds are down as much as 0.7 cents after the government forced an airliner to land on Sunday, arresting an opposition-minded journalist on board and drawing condemnation from Europe and the United States.
Key developments that should provide more direction to markets on Monday:
* BOJ Governor Kuroda speaks
* Emerging market: central bank meetings in Indonesia, Nigeria, Ghana
* Auctions: U.S. 6-month and 3-month t-bills
* Fed speakers: Lael Brainard on CBDCs, Cleveland Fed’s Loretta Mester, Atlanta Fed’s Raphael Bostic, Kansas City’s Esther George
(Danilo Masoni)
*****
EUROPE SET TO EDGE UP (0526 GMT)
European shares look set to start the week slightly higher as optimism about the economic and corporate profit recovery keeps the region's equities near their record peaks.
Futures on the euro STOXX 50, DAX and FTSE 100 indices were all rising around 0.2%, while Wall Street futures also pointed to mild gains at the open later on.
Stocks in Asia, though, dipped as investors awaited key U.S. inflation readings (the core PCE on Friday) for guidance on monetary policy, while Bitcoin sought to stabilise after another sell-off over the weekend.
(Danilo Masoni)
*****
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ US 10-year yields open EUbanks Euro STOXX 50 top10ov top10un
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>