Dec 1 - 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 APPETITE FOR EQUITIES REMAINS (1151 GMT) Quite a contrarian take by BofA this morning! The bank sees European equities falling about 10% in 2022 due to growth slowing down and monetary policy tightening. They have a target of 430 points for the pan-European STOXX 600 which is quite below our latest Reuters poll of 500 points by mid-2022 (currently 467 points). read more There isn"t too many analysts going bearish at the moment and in fact, it seems the Omicron variant has not much dented appetite for European equities despite the uncertainty about its potential human and economic cost. At Barclays, strategists acknowledge the unknowns but are optimistic for 2022 and "advise buying on dips", which is kind of what"s happening this morning in Europe. There"s a tweak though: they believe it may be time to have a slightly more cautious exposure in the short term. "We think more of a barbell factor allocation makes sense for now, but look for cyclicals to lead in 2022". Roughly the same take at Generali Investments which says equities remain "appealing" due to solid earnings growth in 2022. The team there also favours a barbell approach with value, staples, durables and pharma. Mark Haefele, CIO at UBS GWM says he expects focus to return to earnings growth too and that should allow stocks to resume their upward trend. "Responding too quickly by reducing exposure to risk assets could undermine long-term performance", he added, noting however that portfolios needed to be ready for some volatility moving forward. There"s indeed a consensus that whatever the direction of travel, the road ahead is bumpy, courtesy of the pandemic. "Traders should prepare for a highly volatile time, with few places to hide", warned Joshua Mahony at IG this morning. Here"s the latest expectations from Refinitiv I/B/E/S for European earnings growth: More reading on the Reuters poll: POLL-European stocks seen reaching new records in 2022 read more (Julien Ponthus) ***** WANNA SAY GOODBYE TO TRANSITORY INFLATION? BET ON BANKS (1102 GMT) Now that even Powell has called time on the transitory inflation narrative, investors may look with greater confidence about investing in banks stocks, the most prominent victim of ultra accommodative monetary policies. "The direction of travel for interest rates and correspondingly well correlated banks" share prices is up," says Deutsche Bank analyst Benjamin Goy. The sector is cheap and even though it has recovered with an 29+% bounce year to date, there"s room for further gains ahead, he believes, even though it"s unlikely to be plain sailing. "While the destination might be clear, detours and delays can be possible as highlighted by last week"s Omicron sell-off," he writes. "Nevertheless, at c.8x earnings the sector is anyway not priced for imminent interest rate hikes in our view, pointing to upside in case of delivery of interest rate hikes - the key theme for the sector in 2022," he adds. (Danilo Masoni) ***** STOXX KICKS OFF DECEMBER ABOVE 7-WEEK LOWS (0903 GMT) European shares started the final month of the year on a positive footing with a broad-based bounce lifting the STOXX 600 by 0.7% after Omicron worries and hawkish Powell comments sent the pan-regional benchmark to near seven-week lows. Battered travel and leisure stocks (.SXTP) led the recovery in early trading even as the United States tightened travel rules. Miners, oil, banks and autos were also well bid. Luxury giant LVMH and defensives like Nestle eased, and stay-at-home plays like Hellofresh also dipped, as volatility (.V2TX) fell from an over one year high hit on Tuesday. Here"s your opening snapshot: snapshot snapshot (Danilo Masoni) ***** TRANSITORY, YOU ARE TOAST (0754 GMT) If there was a word of the year for financial markets, then "transitory" would be a leading contender. Yet, as 2021 approaches its final stretch, its time too may be over. Speaking to U.S. lawmakers on Tuesday, Federal Reserve chief Jerome Powell said it was probably time to "retire" the term used by many central banks to describe a short-term inflation surge. Instead, Powell said a strong economy, stalled workforce growth, and high inflation that"s expected to last into mid-2022, was reason enough for the Fed to start discussing whether to end bond purchases earlier than anticipated. read more The result? Markets are back to pricing in a first 25 basis-point Fed hike for July 2022, versus September a day ago and U.S. Treasury yields have resumed their climb. Working out the Fed"s next move is another task for investors -- in addition to assessing how serious an impact the Omicron coronavirus variant might have on the world economy. But for now, markets have started December in brighter spirits. U.S. and European share futures are higher, Asian stocks were heading for their best day in nearly two months and oil has rallied around 2%. The Organization of the Petroleum Exporting Countries meets later on Wednesday, ahead of Thursday"s meeting of OPEC+, which groups OPEC with other oil producing allies. They will discuss how to respond to the threat of a hit to fuel demand from the Omicron variant. The latest U.S. ISM manufacturing survey, out later this session, will also be in focus. Renewed COVID concerns wipe $2 trillion off value of world stocks Renewed COVID concerns wipe $2 trillion off value of world stocks Key developments that should provide more direction to markets on Wednesday: - Asian factories shake off supply headaches but Omicron presents new risks. read more - Suncity shuts VIP gaming rooms in Macau after CEO"s arrest -sources read more - Prepare sanctions on Russia and ramp up military cooperation, Ukraine tells NATO - read more - Australia economy"s Q3 slump not as bad as feared, recovery underway read more - Bank of England Governor Andrew Bailey speaks - Federal Reserve Beige Book of economic condition - Final manufacturing PMIs euro zone - Emerging markets: Korea exports; PMIs in several countries - ADP private payrolls/ISM PMIs - Earnings. Trip.com, Royal Bank of Canada, National Bank of Canada, Snowflake, Synopsys, Crowdstrike, Veeva Systems, Okta, Splunk, Elastic, Five Below (Dhara Ranasinghe) ***** EUROPE: ONE DAY DOWN, ONE UP... (0736 GMT) The post-Omicron scare is taking shape and it"s name is volatility. And a hawkish Powell is also doing his fair share. So what we"re seeing across equity markets these days are dramatic sell-off followed by powerful bounce-backs. No surprise then that after plunging to seven-week lows, European shares look set for a positive open. Futures on main regional benchmarks are rising as much as 0.6%. A similar script is in store for Wall Street with derivatives pointin g to a tech-led bounce after yesterday"s battering. Nasdaq futures are up 1.4%.