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European stocks close mostly lower with drop in Euro-area PMI and Italy-EU budget tension driving sellers

Oct 24, 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 with the drop in Euro-area PMI to 52.7 from 54.1 and the Italy-EU budget tension driving sellers today 
  • The Euro Stoxx 600 closed down -0.22%, the FTSE 100 advanced +0.11%, the DAX fell -0.73%, and the CAC 40 finished down -0.29%
  • Investor sentiment for European stocks finished trading negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.89x
  • Retail (+1.14%), Media (+0.96%), and Food & Beverage (+0.86%) stocks were the top performers in the Euro Stoxx 600 today
  • Automobiles & Parts (-2.39%), Basic Resources (-1.93%), and Technology (-1.85%) stocks were the worst performers in the Euro Stoxx 600 today
  • 7 stocks in the Euro Stoxx 600 hit 4-week highs while 302 stocks closed at 4-week lows
  • 4 stocks in the Euro Stoxx 600 finished the trading session overbought while 214 stocks closed oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, closed  down -7.13 points today to 14.23 after closing at 21.36 yesterday

Stocks Trending in the News

Click name for more information, Q-Factor score and latest price

  • Atos SE (ENXTPA:ATO) announces plans to refinance its USD$1.9bn loan for the Syntel takeover with bonds.  Atos is rated BBB+ by S&P.  Atos is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas. 
  • Boliden AB (OM:BOL) reports 3Q results which were well below analyst expectations.  CY2019 guidance for Capex came in well above where Street forecasts were, which may lead to negative earnings revision in the near future.  Boliden AB is rated “Attractive” in our European Large-Cap Global Top Stock Ideas. 
  • Heineken (HEIA NA) reported organic beer volumes above expectations.  Heineken saw organic beer volumes grow 4.6% while the estimate was for 4.3%.  Heineken saw Americas volume grow8.1%, Asia Pacific grew 4.8% while Europe grew 2.2%.   Heineken brewed less in Europe and Asia than expected.    Heineken is rated ‘Unattractive’ in our European Large-Cap Global Top Stock Ideas.
  • Kering (KER FP) is trading 7% higher at 377.70 euros after reporting its Gucci brand reported 35% growth in the last quarter, beating the 28% expectations.  Kering delivered strong growth in China at a time growth concerns there are strong for luxury goods sellers.  Kering is rated ‘Attractive’ in our European Large-Cap Global Top Stock Ideas.
  • Melexis (MELE BB) cut its full year guidance. Melexis cut full year revenue growth at 11% down from 13-14%.  Melexis expects revenue of 146.7mn euros while resent consensus is for 148mn euros.  Melexis sees full year gross margin at ~45%.  Melexis reported 3Q results in line with EPS of 0.74 euros while consensus was 0.77 euros.  Melexis is rated ‘Attractive’ in our European SMID-Cap Global Top Stock Ideas.
  • STMicroelectronics (STM FP) forecast zero improvement in gross margin for the fourth quarter.  STMicroelectronics sees 5.7% revenue growth in 4Q to USD$2.7 billion; the revenue guidance matches guidance but the 39.8% gross margin is below 40.2% guidance for STMicroelectronics.  STMicroelectronics is rated ‘Neutral’ in our European Large-Cap Global Top Stock Ideas.
  • Sunny Optical (2382 HK) closed 4.6% lower at HKD$78.50 after O-Film Tech (002456 CH) announced it is expanding into the vehicle lens market.  Jefferies commented that any new player in the sector would need time to ramp up glass and hybrid lens designs and capacity, so that near term Sunny Optical does not have much to worry about.  Longer term, though, it could be a challenge for Sunny Optical.  Sunny Optical is rated ‘Unattractive’ in our China All-Cap Global Top Stock Ideas.

What is Going on with European Currencies?

  • EUR€ is currently down -0.697% against the USD$ to 1.1391
  • GBP£ is currently down -0.655% against the USD$ to 1.2898
  • CHF is currently down -0.298% against the USD$ to 1.0021

Highlights from the European Bond Market

  • Generic Euro 10-Year Bonds are higher with yields down -1.3 basis points to 0.396%
  • German 10-Year Bunds are higher with yields down -1.3 basis points to 0.396%
  • French 10-Year Government Bonds are higher with yields down -1.5 basis points to 0.771%
  • UK 10-Year GILTs are higher with yields down -1.2 basis points to 1.457%
  • Italian 10-Year Government Bonds are lower with yields up 1.3 basis points to 3.605%
  • Spanish 10-Year Government Bonds are higher with yields down -3.8 basis points to 1.625%
     

Euro Stoxx 50 Movers

In local currency.
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Outperformers Sector Price 1D % Chg Volume
Safran SA Industrials 109 3.99%               2,517,841
Vinci SA Industrials 77.2 3.71%               2,675,790
adidas AG Consumer Discretionary 201 1.80%                  829,302
Anheuser-Busch InBev SA/NV Consumer Staples 72.4 1.47%               3,314,780
Airbus SE Industrials 95.31 1.24%               2,651,513
 
Underformers Sector Price 1D % Chg Volume
Deutsche Bank AG Financials 8.87 -4.76%            26,878,371
Volkswagen AG Consumer Discretionary 134 -4.29%               2,296,187
ASML Holding NV Information Technology 142 -3.65%               2,510,631
Intesa Sanpaolo SpA Financials 1.9 -3.43%          127,647,891
Societe Generale SA Financials 32.7 -2.66%               5,411,912