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EUROPEAN MIDDAY BRIEFING : Stocks Slump as Travel -2-

07/19/2021 | 06:25am EDT

0923 GMT - Telecom Italia has raised mid-term targets but downgraded guidance for 2021 organic Ebitda after leases amid incremental costs for an agreement with streaming service DAZN for the distribution of Italy's Serie A soccer championship, a decision that raises doubts over the Italian telecommunications company's ability to deliver a sustainable turnaround, Bryan Garnier says. "The 2021 downward revision is obviously more significant than the 2022-23 upward revision, which should lead to a drop in 2022 and 2023 forecasts--not implemented yet in our model," the European investment bank says. Bryan Garnier points out the group's ability to deliver a strong and sustainable operational turnaround is what investors are expecting, after significant net debt improvement in the last two years. Telecom Italia shares trade 3.4% lower at EUR0.37. (mauro.orru@wsj.com; @MauroOrru94)

Ceconomy 3Q EBIT Loss Widened Despite Higher Sales

Ceconomy's 3Q EBIT Beat Gives Grounds for FY Optimism

0834 GMT - Ceconomy's third-quarter operating loss wasn't as severe as consensus had expected, with the top line recovering in June, Clement Genelot at Bryan Garnier says after the German electronics retailer prereleased results for April-June. An adjusted loss before earnings and taxes of EUR93 million was narrower than consensus estimates, and can be attributed to lower sales in the DACH region in the first part of the quarter, due notably to a hard lockdown in Germany, Genelot says. But sales there evidently rebounded in June, while other regions performed well during the quarter, he adds. This momentum gives grounds for optimism for Ceconomy to reach its best-case scenario for the fiscal year, and the company may update guidance next month at full 3Q results, Genelot suggests. (joshua.kirby@wsj.com; @joshualeokirby)

RWE Says German Floods Caused Tens of Millions Worth of Damage to Its Sites

RWE said that some of its sites were affected by the floods that hit Western Germany, with damage up to a mid-double-digit-million euro sum.

The German energy company said its open-cast mine near the city of Inden and the connected Weisweiler power station were affected when water flooded a dam and entered the mine. It added that mining operations should restart by the end of next week, though it is still evaluating how long it will take to fully restore operations at the mine and the connected power station.

Flutter Entertainment Refinances Debt

Flutter Entertainment PLC said Monday that it has completed a debt refinancing that will reduce its cost of debt and provide it with additional liquidity.

The Dublin-based betting and gambling company estimates the transaction will result in interest savings of around 50 million pounds ($68.8 million) a year, based on its debt position at the end of 2020.

Assa Abloy 2Q Net Profit Beat as Demand Rebounded, Price Rises Offset Higher Costs

Sweden's Assa Abloy AB on Monday posted a bigger-than-expected rise in second-quarter net profit as demand rebounded in most markets and price rises offset higher raw material costs.

The lock maker said net profit for the period rose to 3.21 billion Swedish kronor ($369.3 million), from SEK1.4 billion for the year-earlier period. Sales for the quarter rose 19% to SEK23.65 billion.

China Wants a Chip Machine From the Dutch. The U.S. Said No.

Some of the tech industry's most important machines are made next to corn fields in the Netherlands. The U.S. government is trying to make sure they don't end up in China.

Beijing has been pressuring the Dutch government to allow its companies to buy ASML Holding NV's marquee product: a machine called an extreme ultraviolet lithography system that is essential to making advanced microprocessors.

U.K. House Prices Hit All-Time High in Busiest Ever First Half

U.K. house prices have hit a record high for a fourth consecutive month, rounding off the busiest ever first half of a year, according to new data from property portal Rightmove PLC.

The average price of property coming to the market rose an eye-watering 21,389 pounds ($30,199) in just six months, a rise of 6.7% and bringing the national average to a new all-time high of GBP338,447. The portal measured 95,164 prices across the U.K. over the four weeks to July 10.

GLOBAL NEWS

Money-Market Funds Buckled in Two Crises in a Row. Regulators Look to Fix Them Again.

The start of the Covid-19 pandemic led to a familiar wave of stress in money-market funds, which companies and consumers use like checking accounts to store their ready cash. The Federal Reserve had to step in to keep these funds operating.

The $20 Billion Winner of the American EV Startup Boom: Saudi Arabia

The single biggest financial beneficiary of the recent U.S. electric-vehicle startup boom is an unlikely candidate: the world's largest exporter of oil.

The kingdom of Saudi Arabia stands to record a profit of nearly $20 billion on a $2.9 billion investment in Lucid Motors Inc., a San Francisco Bay Area electric-car maker that is set to list publicly after it completes a merger with a special-purpose acquisition company Friday. The Saudi Public Investment Fund will own over 60% of the company, which is expected to have a market capitalization of about $36 billion based on the SPAC's current share price.

OPEC, Allies Agree to Boost Oil Output as Demand Roars Back

OPEC and its Russia-led oil-producing allies agreed to unleash millions of barrels of bottled-up crude over the next two years, committing to restore all the cuts they made at the start of the Covid-19 pandemic as many economies pick up and crude demand recovers.

Underscoring the uncertain speed of a full economic recovery and a return of pre-pandemic oil demand, the group chose to move gradually, agreeing to modest, monthly installments of new oil through the latter end of 2022. Oil prices have eased recently in anticipation of a deal, but analysts said the gradual nature of the output boost could continue to pressure prices.

Economy Week Ahead: Housing, Jobless Claims, ECB

The U.S. housing market is in focus during a relatively light week for economic data.

TUESDAY

Red-Hot U.S. Economy Expected to Cool From Here

The U.S. economy's 2021 growth surge likely peaked in the spring, but a strong expansion is expected to continue into next year, say economists surveyed by The Wall Street Journal.

Widespread business reopenings, rising vaccination rates and a big infusion of government pandemic aid this spring helped propel rapid gains in consumer spending-the economy's main driver. But that burst of economic growth is starting to slow, economists say.

Democrats' Budget Would Finance Sweeping Clean-Energy Plan

The $3.5 trillion budget plan from congressional Democrats would finance a far-reaching transition to cleaner power, but it is expected to face opposition from parts of the energy industry and their industrial customers over provisions likely to raise their costs.

The plan calls for paying money to utilities that make a fast transition to cleaner fuels-and levying financial penalties for those that move slowly, one of several largely untested programs in the package. Others include tariffs on imports based on their production's greenhouse-gas emissions, and creating first-of-their-kind fines on oil-and-gas producers for leaking greenhouse gases into the atmosphere from their wells, pipes and tanks.

Private-Equity Deal Making Surges Toward Record Year in Europe

Low interest rates and soaring stock markets are expected to fuel a record-setting year for private-equity deals in Europe amid a rebound marked by a whirlwind of transactions involving midsize companies.

Some 1,800 deals in Europe totaling EUR169.6 billion (equivalent to about $200.3 billion) closed in the just-ended quarter, marking a second consecutive quarter with a record-setting deal pace, albeit the volume was lower than the first quarter, according to research firm PitchBook Data Inc. The Seattle-based company said Monday that the figures for the most recent quarter far surpassed those of the year-earlier period, when the pandemic depressed deal-making activity in the region.

Escalating Materials Prices Turn Construction Bids Into a Gamble

Construction companies, manufacturers and other businesses that submit bids to win jobs say that process has turned unpredictable as rising materials costs expose them to potential losses.

As projects and orders stack up in a rebounding U.S. economy, some construction and manufacturing executives said they are surrendering profits on jobs or paying out of their own wallets to cover materials costs that exceed their bids.

When Is Jeff Bezos' Flight to Space and How to Watch the Blue Origin Launch

Jeff Bezos has big ambitions in space. The Amazon.com Inc. founder plans to make his own first visit with a flight scheduled to launch at 9 a.m EDT on July 20, the 52nd anniversary of the Apollo 11 moon landing.

The New Shepard rocket and capsule that will carry Mr. Bezos and three others was developed by his Blue Origin company, named for the belief that this blue planet is just the starting point for humankind's future.

Senate Infrastructure Bill Drops IRS Funding, Raising Pressure for New Revenue

Lawmakers dropped plans to pay for a roughly $1 trillion infrastructure package in part by boosting tax-collecting enforcement at the Internal Revenue Service, a setback for the bipartisan measure ahead of a looming deadline for agreement.

The shift came after pushback from Republicans who were wary of granting the agency more money and power, Sen. Rob Portman (R., Ohio), one of the lead negotiators, said Sunday on CNN. Legislative aides from both parties confirmed the move.

Unvaccinated Americans Are Behind Rising Covid-19 Hospitalizations

(MORE TO FOLLOW) Dow Jones Newswires

07-19-21 0624ET

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