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European stocks close mostly lower on growth prospects concerns as both Michelin and Daimler issue profit warnings and analysts turn negative with earnings estimates revised down

Oct 19, 2018

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

European Markets

  • European stocks closed mostly lower on growth prospects concerns as both Michelin and Daimler issue profit warnings and analysts turn negative with earnings estimates revised down
  • The Euro Stoxx 600 closed down -0.12%, the FTSE 100 advanced +0.32%, the DAX fell -0.31%, and the CAC 40 finished down -0.63%
  • Investor sentiment for European stocks finished trading negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.58x
  • Food & Beverage (+1.64%), Utilities (+1.17%), and Personal & Household Goods (+0.92%) stocks were the top performers in the Euro Stoxx 600 today
  • Automobiles & Parts (-2.8%), Travel & Leisure (-1.77%), and Construction & Materials (-1.67%) stocks were the worst performers in the Euro Stoxx 600 today
  • 29 stocks in the Euro Stoxx 600 hit 4-week highs while 83 stocks closed at 4-week lows
  • 5 stocks in the Euro Stoxx 600 finished the trading session overbought while 124 stocks closed oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, closed  down -3.94 points today to 14.23 after closing at 18.17 yesterday

Stocks Trending in the News

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  • Daimler (DAI GR) closed 1.9% lower at 51.40 euros after announcing that earnings this year will be “significantly” lower than the market is expecting.  Daimler did not give details with its announcement just a general statement which drew criticism from many.  Daimler’s announcement included “an annoying lack of disclosure” according to Jefferies.   Local broker Bankhaus Metzler called Daimler’s warning “disastrous”.  Daimler is rated ‘Unattractive’ in our European Large-Cap Global Top Stock Ideas.
  • Lufthansa (LHA) closed 4.8% lower at 17.95 euros after it was downgraded in a note from MainFirst Bank.  Lufthansa was downgraded to neutral from outperform given its weaker outlook, according to the note.  Lufthansa had its price target slashed to 20 euros from 30 as well.  Lufthansa is rated ‘Neutral’ in our European Large-Cap Global Top Stock Ideas.
  • Nestle (NESN SW) is in talks with advisors about the potential sale of its skincare division according to a report in Bloomberg today.  Nestle could see proceeds of USD$8-10 billion according to the report.  Discussions are in early stages, it goes on, and interest could come from multi-nationals or private equity firms.  Nestle closed 3.1% higher at  82.04 francs.  Nestle is rated ‘Neutral’ in our European Large-Cap Global Top Stock Ideas.

What is Going on with European Currencies?

  • EUR€ is currently up +0.533% against the USD$ to 1.1514
  • GBP£ is currently up +0.177% against the USD$ to 1.3041
  • CHF is currently little changed against the USD$ at 1.0031

Highlights from the European Bond Market

  • Generic Euro 10-Year Bonds are lower with yields up 4.4 basis points to 0.46%
  • German 10-Year Bunds are lower with yields up 4.4 basis points to 0.46%
  • French 10-Year Government Bonds are lower with yields up 4.3 basis points to 0.84%
  • UK 10-Year GILTs are lower with yields up 3.8 basis points to 1.576%
  • Italian 10-Year Government Bonds are higher with yields down -20.3 basis points to 3.483%
  • Spanish 10-Year Government Bonds are lower with yields up 0.7 basis points to 1.735%

Euro Stoxx 50 Movers

In local currency.
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Outperformers Sector Price 1D % Chg Volume
Unilever NV Consumer Staples 47.3 2.78%               8,509,440
L'Oreal SA Consumer Staples 191 2.46%                  920,180
adidas AG Consumer Discretionary 203 2.04%                  878,318
E.ON SE Utilities 8.6 1.71%            11,009,528
Iberdrola SA Utilities 6.27 1.65%            29,308,750
 
Underformers Sector Price 1D % Chg Volume
CRH PLC Materials 24.4 -3.36%               4,558,193
Schneider Electric SE Industrials 60 -2.82%               3,156,884
Koninklijke Philips NV Health Care 34.7 -2.26%               6,151,625
Daimler AG Consumer Discretionary 51.4 -1.95%               9,510,534
Airbus SE Industrials 98 -1.37%               2,488,856