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Early strength in European stocks gives way to losses at the close after Italy's populist government says it needs a dialogue with the EU about its 'necessary' breach of deficit rules

Oct 22, 2018

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

European Markets

  • European stocks were up early in the day but gave back everything and closed with losses after Italy's populist government said it needs a dialogue with the EU over its "necessary' breach of EU deficit rules next year
  • The Euro Stoxx 600 closed down -0.42%, the FTSE 100 declined -0.1%, the DAX fell -0.26%, and the CAC 40 finished down -0.62%
  • Investor sentiment for European stocks finished trading negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.55x
  • Chemicals (+0.36%), Personal & Household Goods (+0.21%), and Food & Beverage (+0.2%) stocks were the top performers in the Euro Stoxx 600 today
  • Oil & Gas (-1.46%), Telecommunications (-1%), and Travel & Leisure (-0.96%) stocks were the worst performers in the Euro Stoxx 600 today
  • 21 stocks in the Euro Stoxx 600 hit 4-week highs while 193 stocks closed at 4-week lows
  • 5 stocks in the Euro Stoxx 600 finished the trading session overbought while 160 stocks closed oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, closed  moving higher 0.57 points today to 19.35 after closing at 18.78 last week

Stocks Trending in the News

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  • CropEnergies (CE2 GR) cut its forecast for operating profit for the full year to 15-35 million euros, down from 25-55 million euros.  CropEnergies now expects full-year revenue of 750-780 million euros, down from 810-860 million euros.  CropEnergies issued a profit warning, saying “due to difficult market conditions, CropEnergies will halt production in its plant in Wilton, UK from the end of November, 2018 on.”  CropEnergies closed 6.5% lower at 4.19 euros.  CropEnergies is not rated in our Global Top Stock Ideas.
  • Daimler (DAI GR) had its price downgraded today at Bankhaus Metzler to 48 euros from 52 euros while reiterating its sell rating on Daimler in a note published today.  Daimler “has often delivered too little earnings momentum” according to the note and the profit warning from Friday was cited as evidence.  Daimler's 6% operating profit at Mercedes-Benz “disappointed”, the note went on to explain.  Daimler is rated ‘Unattractive’ in our European Large-Cap Global Top Stock Ideas.
  • Linde (LIN GR) and Praxair (PX) won approval from the US Justice Department for their USD$46 billion merger.  Linde and Praxair together will create an international giant in industrial gases.  Linde and Praxair will each sell some assets and the combination will save USD$1.1-1.2 billion per year in expenses.  Linde closed 2.8% higher at $217.30.  Praxair is trading 1.7% higher at $162.60.   Linde is rated ‘Top Buy’ in our European Large-Cap Global Top Stock Ideas, Praxair is rated ‘Neutral’ in our US Large-Cap Global Top Stock Ideas.

What is Going on with European Currencies?

  • EUR€ is currently down -0.469% against the USD$ to 1.146
  • GBP£ is currently down -0.864% against the USD$ to 1.2963
  • CHF is currently little changed against the USD$ at 1.0027

Highlights from the European Bond Market

  • Generic Euro 10-Year Bonds are higher with yields down -1.2 basis points to 0.448%
  • German 10-Year Bunds are higher with yields down -1.2 basis points to 0.448%
  • French 10-Year Government Bonds are higher with yields down -1.9 basis points to 0.821%
  • UK 10-Year GILTs are higher with yields down -4.9 basis points to 1.527%
  • Italian 10-Year Government Bonds are lower with yields up 0.7 basis points to 3.49%

Euro Stoxx 50 Movers

In local currency.
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Outperformers Sector Price 1D % Chg Volume
Safran SA Industrials 108 0.60%               1,005,406
AXA SA Financials 22.5 0.51%               6,017,426
Air Liquide SA Materials 106 0.47%                  927,390
Enel SpA Utilities 4.44 0.16%            26,965,093
Siemens AG Industrials 100.24 0.14%               2,094,616
 
Underformers Sector Price 1D % Chg Volume
Koninklijke Philips NV Health Care 31.7 -8.69%            10,530,044
Banco Bilbao Vizcaya Argentaria SA Financials 5.1 -2.13%            19,954,017
Airbus SE Industrials 96.3 -1.67%               1,441,080
ING Groep NV Financials 10.4 -1.55%            19,011,347
TOTAL SA Energy 52.1 -1.42%               3,910,479