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European stocks are seeing profit taking today with US 10-year bond yield above 3.22% and Morgan Stanley downgrading the entire luxury goods sector

Oct 10, 2018

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*Data in Price Return and Updated Real-Time (with a delay), Source: StockDio

European Markets

  • Europe stocks are inching down this morning with US 10-year treasury yields breaking above 3.22% 
  • Morgan Stanley’s downgrade of large-cap luxury stocks to sell is raising investor worries about a structural slowdown of the Chinese economy -- large-cap luxury stocks continue to be heavily owned by institutional funds with the NTM P/E at 21.1x vs. 10-year average of 17.6x 
  • Disappointing earnings outlook from LVMH (ENXTPA:MC) is pressuring French stocks with LVMH ~6.7% of the benchmark French index -- LVMH and Kering (ENXTPA:KER) make up ~4.5% of the Euro Stoxx 50 large-cap European index
  • The Euro Stoxx 600 is currently down -0.31%, the FTSE 100 has declined -0.01%, the DAX has fallen -0.61%, and the CAC 40 is lower by -0.69%
  • Investor sentiment for European stocks is negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.49x
  • Telecommunications (+2.68%), Banks (+1.41%), and Oil & Gas (+1.01%) stocks are the top performers in the Euro Stoxx 600 today
  • Technology (-2.3%), Chemicals (-1.96%), and Personal & Household Goods (-1.78%) stocks are the worst performers in the Euro Stoxx 600 today
  • 8 stocks in the Euro Stoxx 600 are at 4-week highs while 271 stocks are at 4-week lows
  • 7 stocks in the Euro Stoxx 600 are overbought while 126 stocks are oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, is  moving down this morning and is currently at 14.23 after closing at 16.9 yesterday

What is Going on with European Currencies?

  • EUR€ is currently little changed against the USD$ at 1.1498
  • GBP£ is currently little changed against the USD$ at 1.3152
  • CHF is currently little changed against the USD$ at 1.0076

Highlights from the European Bond Market

  • Generic Euro 10-Year Bonds are lower with yields up 0.3 basis points to 0.552%
  • German 10-Year Bunds are lower with yields up 0.3 basis points to 0.552%
  • French 10-Year Government Bonds are lower with yields up 0.4 basis points to 0.894%
  • UK 10-Year GILTs are lower with yields up 0.4 basis points to 1.72%
  • Italian 10-Year Government Bonds are higher with yields down -0.7 basis points to 3.469%
  • Spanish 10-Year Government Bonds are lower with yields up 0.1 basis points to 1.601%

Euro Stoxx 50 Movers

In local currency.
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Outperformers Sector Price 1D % Chg Volume
Deutsche Telekom AG Telecommunication Services 14.4 3.52%      11,359,871.00
Intesa Sanpaolo SpA Financials 2.12 2.36%      75,211,537.00
ING Groep NV Financials 11.1 2.29%         8,936,623.00
Orange SA Telecommunication Services 13.9 2.13%         3,423,327.00
TOTAL SA Energy 56 2.13%         2,637,722.00
 
Underformers Sector Price 1D % Chg Volume
LVMH Moet Hennessy Louis Vuitton SE Consumer Discretionary 270 -5.39%            906,974.00
ASML Holding NV Information Technology 152 -4.37%            785,886.00
L'Oreal SA Consumer Staples 193 -3.13%            310,489.00
adidas AG Consumer Discretionary 198 -3.03%            315,165.00
Schneider Electric SE Industrials 63.8 -2.44%            616,399.00