Macron nominates France's European commissioner

French President Emmanuel Macron has nominated Atos chief executive Thierry Breton as his candidate for European Commissioner. Breton has a long career in the private sector - before leading multinational IT consultancy Atos, he helmed France-Telecom and Thomson - and was also France's Finance Minister from 2005 to 2007. 

An early backer of Macron's 2017 presidential candidacy, Breton replaces the French premier's initial candidate Sylvie Goulard, who was rejected by the EU earlier this month. The French commissioner is expected to oversee a wide portfolio spanning digital issues and the internal market. 

 

European coal plants set to lose $7.3bn this year

Four out of five of Europe's coal-fired power stations are unprofitable and could lose $7.3bn this year, according to a new report. Think-tank Carbon Tracker says the EU's coal generators can't compete with cheap renewables and gas, especially as they are hit by eco-minded legislative restrictions. EU carbon credits, which must be purchased by industries with high CO2 emissions, have trebled since 2017 to almost $28 per CO2 tonne. 

As part of a general move to end the era of coal-fired stations, 13 EU member states have committed to close all coal generators by 2030. Carbon Tracker's Matt Gray warns that governments over the next decade will face "intractable problems" if they prop up coal power: whether to "pass costs to the utilities and destroy shareholder value; pass costs to consumers and push bills up; or fund them from debt or taxes."

 

PPI hit drags RBS from $1.2bn profit to a third-quarter loss

Royal Bank of Scotland (RBS) made a loss in the third quarter, having made a $1.239bn profit in the same period last year. The state-backed bank, in which the government owns a 62 percent stake, blamed a new $1.16bn charge from PPI mis-selling claims.

RBS also had problems with its investment banking arm NatWest Markets, which posted a loss of $248m for the quarter: a depressed bond market took the unit's income down from $733m in Q3 2018 to $193m this time. These were the final results under chief executive Ross McEwan, who will be replaced next month by Alison Rose, the first woman to lead one of the UK's big four banks.

 

Coca-Cola diluted by European slowdown

Coca-Cola European Partners has warned that profits will be affected by weakening demand in France and Britain - and widespread cold weather in October. The world's largest independent bottler of Coke products, which sells and distributes drinks in 13 European countries, reported $3.649bn in third-quarter revenue, compared to $3.660bn a year earlier.

The firm forecast full-year revenue to grow about 3 percent and diluted earnings per share growth of around 10 percent. It also announced the purchases of a 25 percent stake in Parisian on-demand delivery service Kol and a 15 percent stake in self-driving technology company TeleRetail.

 

Daimler profit accelerates but there are roadblocks ahead

German carmaker Daimler has announced a slight rise in third-quarter operating profit. Boosted by an 8 percent rise in sales of luxury Mercedes-Benz vehicles, earnings before interest and taxes also rose 8 percent from $2.771bn to $2.994bn. 

However, Daimler also announced cost cuts and warned of future legal costs due to litigation against diesel emissions: in September, German prosecutors fined the company almost $1bn for "negligent violation" in the data-manipulating scandal that rocked the car industry. Daimler is to give a detailed presentation on strategy and costs next month. 

 

Brexit on ice (sort of).... now it's all about the earnings

With US-China trade talks quiet for now, and the pound taking a breather as the Brexit schedule is on a kind of pause, market direction and volatility has been driven by U.S. earnings.

Sour results and a big miss on earnings from Caterpillar, plus uninspiring news from Boeing, initially knocked the markets lower, but the bright spots were Microsoft and Tesla. Tesla really surprised the markets with strong third-quarter earnings and news it was ahead of schedule on a new factory in Shanghai. Shares spiked more than 20 percent. Tech heavyweight Amazon reports today and will be the center of attention.

 

Data distraction

However, some European data could provide some distraction. Analysts are looking out for Germany's Markit Manufacturing Flash PMI for October, at 15:30GMT. Forecasts suggest a tiny rise from the previous month - not enough to suggest either Germany or the European economy is looking much healthier, but with so much economic uncertainty, even that might be seen by the markets as a win. If the numbers are worse than expected, it could drag down European stocks and the Euro in the short term.

Also late today, Mario Draghi will be chairing the European Central Bank governing council meeting for the last time. "For some, he's the savor of the monetary union; for others, he's an enabler of a transfer union which violates the spirit of the Maastricht Treaty and is not sustainable in the long run," said Dr. Jorg Kramer, chief economist at Commerzbank.

Talk of the trading floor is that Draghi will finish his term with a quiet exit rather than a blaze of glory as the ECB is universally expected to leave rates unchanged. 

Sterling is treading water as we await Europe's decision on a Brexit deadline extension. The next decision after that will be around another General Election here in the UK.