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European stocks rally the most in 7 months and see broad strength despite inflation accelerating in October

Oct 31, 2018

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

European Markets

  • European stocks closed higher, rallying the most in 7 months with broad strength despite inflation data showing an acceleration in October
  • The Euro Stoxx 600 closed up +1.76%, the FTSE 100 advanced +1.43%, the DAX rose +1.49%, and the CAC 40 finished up +2.42%
  • Investor sentiment for European stocks finished trading positive with the advance/decline ratio for the Euro Stoxx 600 currently at 4.94x
  • Basic Resources (+3.71%), Oil & Gas (+3.11%), and Industrial Goods & Services (+2.67%) stocks were the top performers in the Euro Stoxx 600 today
  • Utilities (-0.22%), Real Estate (+0.35%), and Telecommunications (+0.75%) stocks were the worst performers in the Euro Stoxx 600 today
  • 16 stocks in the Euro Stoxx 600 hit 4-week highs while 28 stocks closed at 4-week lows
  • 5 stocks in the Euro Stoxx 600 finished the trading session overbought while 67 stocks closed oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, closed down -1.92 points today to 20.30 after closing at 22.22 yesterday

Stocks Trending in the News

Click name for Q-Factor score and financial data

  • Airbus (AIR FP) saw earnings before interest, tax and one-time items climb to 1.58 billion euros, which came ahead of 1.4 billion euros expected.  Airbus maintained its 800 aircraft delivery guidance for the full year.  Airbus is struggling with production challenges with jet engines problems.  Airbus maintained its ebit forecast of about 5 billion euro.  Airbus is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Banco Santander, S.A. (BME: SAN) surprised investors after reporting CY3Q2018 financial results that detail stronger core capital levels. Banco Santander’s CY3Q2018 quarterly Spanish profit grew to 526mm euros driven by gains in bond trading as well as lower costs. Banco Santander is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Baxter International, Inc. (BAX) lowers its CY4Q2018 adjusted EPS guidance to between USD$0.71/share and USD$0.73/share while analyst estimates range between USD$0.76/share and USD$0.81/share. Baxter reports CY3Q2018 adjusted EPS from continuing operations of USD$0.80/share that exceeds consensus estimates of USD$0.74/share. Baxter is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas.
  • Computacenter (LSE: CCC) shares are seeing their largest decline since 2005 after the company announced that CY3Q2018 revenue fell 3% y/y to GBP900mm. Computacenter reported that its group technology revenue in CY3Q2018 grew by 1% y/y in constant currency, however, the firm's group technology sourcing revenue fell by 5% y/y in constant currency, driving the overall revenue decline. Computacenter is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas. 
  • Eutelsat (ENXTPA: ETL) shares are plunging the most in 5 months after the firm cut its full-year sales guidance. Although Deutsche Bank, who maintains a ‘sell’ recommendation on Eutelsat, said the cut was expected, it was reportedly one that came from, “an unexpected source.” Altogether, Eutelsat cut its full-year sales guidance by roughly 3%. Eutelsat is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas.  
  • L’Oreal S.A. (ENXTPA: OR) shares are posting their largest intraday gains in more than a year after the company announced positive CY3Q2018 earnings. L’Oreal’s luxury division saw total sales grow 16% y/y to 6.47bn euros while consensus sales forecast called for 6.34bn euros. L’Oreal is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Nokian Renkaat OYJ (FH: NRE1V) shares are down today after reporting CY3Q2018 net sales of 356.9mm euros, missing the lowest analyst estimate of 371.0mm euros and consensus estimates of 382.2mm euros. Nokian Renkaat’s EBIT margin in CY3Q2018 weakened to 24.1% from 24.7% a year before. Nokian Renkaat is rated “Top Buy” in our European SMID-Cap Global Top Stock Ideas.  
  • Sanofi (SAN FP) reported 3Q results above expectations.  Sanofi reported 3Q EPS of 1.84 euros while 1.70 was expected.  Sanofi revenue in 3Q of 9.39 billion euros versus 9.26 billion expected.   Sanofi expects EPD growth of 4-5% up from 3-5%.  Sanofi is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Sydbank A/S (CPSE: SYDB) shares are falling the most in a decade after the firm cut its full-year net income guidance. Sydbank management pulled-back full-year net income guidance from between 1.34bn kroner and 1.54bn kroner to between 1.25bn kroner and 1.325bn kroner. Sybank also missed CY3Q2018 revenue estimates, citing a tough banking market environment in Denmark. Sydbank is rated “Unattractive” in our European SMID-Cap Global Top Stock Ideas.  
     

What is Going on with European Currencies?

  • EUR€ is currently down -0.229% against the USD$ to 1.1319
  • GBP£ is currently up +0.417% against the USD$ to 1.2759
  • CHF is currently down -0.201% against the USD$ to 0.9929

Highlights from the European Bond Market

  • Generic Euro 10-Year Bonds are lower with yields up 1.4 basis points to 0.383%
  • German 10-Year Bunds are lower with yields up 1.4 basis points to 0.383%
  • French 10-Year Government Bonds are lower with yields up 0.6 basis points to 0.749%
  • UK 10-Year GILTs are lower with yields up 3.8 basis points to 1.437%
  • Italian 10-Year Government Bonds are higher with yields down -4.8 basis points to 3.427%
  • Spanish 10-Year Government Bonds are higher with yields down -2 basis points to 1.547%
     

Euro Stoxx 50 Movers

In local currency.
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Outperformers Sector Price 1D % Chg Volume
L'Oreal SA Consumer Staples 200 7.08%                  872,797
Safran SA Industrials 114 4.83%               1,313,671
Airbus SE Industrials 97.9 4.70%               2,686,844
Sanofi Health Care 79.2 4.39%               3,900,663
LVMH Moet Hennessy Louis Vuitton SE Consumer Discretionary 268.85 3.39%                  660,821
 
Underperformers Sector Price 1D % Chg Volume
Deutsche Post AG Industrials 27.9 -2.73%               8,444,063
Fresenius SE & Co KGaA Health Care 56.3 -1.72%               1,491,906
Intesa Sanpaolo SpA Financials 1.99 -1.72%          104,061,332
Banco Bilbao Vizcaya Argentaria SA Financials 4.88 -1.69%            36,376,933
Enel SpA Utilities 4.35 -1.21%            16,938,223