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European stocks close the day mixed, early strength on ING earnings beat gives way to weakness as other earnings releases disappoint

Nov 01, 2018

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

European Markets

  • European stocks close mixed with early session strength on ING earnings beat giving way to a retreat, erasing most of the gains, with other company earnings results disappointing
  • The Euro Stoxx 600 is currently up +0.39%, the FTSE 100 has declined -0.18%, the DAX has advanced +0.18%, and the CAC 40 is lower by -0.21%
  • Investor sentiment for European stocks is positive with the advance/decline ratio for the Euro Stoxx 600 currently at 1.47x
  • Travel & Leisure (+2.74%), Basic Resources (+2.17%), and Telecommunications (+2.12%) stocks are the top performers in the Euro Stoxx 600 today
  • Oil & Gas (-2.44%), Financial Services (+0.02%), and Industrial Goods & Services (+0.03%) stocks are the worst performers in the Euro Stoxx 600 today
  • 54 stocks in the Euro Stoxx 600 are at 4-week highs while 13 stocks are at 4-week lows
  • 6 stocks in the Euro Stoxx 600 are overbought while 21 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 20.3 last week

Stocks Trending in the News

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  • BHP (BHP AU) will return a total of USD$10.4 billion to shareholders, the company announced.  BHP will buy back USD$5.2 billion in shares starting this month, buying shares off-market.  BHP will also return USD$5.2 as a special dividend as well, to be paid later.  BHP reaped USD$10.8 billion from sales of share assets and it is returning most to shareholders.  BHP  is rated “Neutral” In our Australia Large-Cap Global Top Stock Ideas.
  • Glanbia (ISE: GL9) shares are trading lower today after the company announced that its pricing declined 4.1% in the first three quarters of 2018. Glanbia management cited lower year-on-year dairy markets for the pricing decline. Glanbia also announced that its volume from wholly-owned continuing operations grew by 6.7%. Jefferies published a note on Glanbia, saying it expects, “such negative pricing to trouble the market.” Glanbia is rated “Top Buy” in our European SMID-Cap Global Top Stock Ideas. 
  • ING Groep (INGA NA) reported 3Q results that came above consensus.  ING Groep 3Q underlying pretax profit of 2.12mn euros, compared with guidance of 1.91 billion euros.  ING Groep net income of 776mn euros came well above 678mn expected.  ING Groep is rated “Top Short” in our European Large-Cap Global Top Stock Ideas.
  • Just Eat (LSE: JE) announces FY2018 guidance that falls slightly short of analyst forecasts. Just Eat forecasts FY2018 adjusted EBITDA at the lower end of between GBP165mm and GBP185mm while consensus analyst estimates call for GBP177.9mm. For FY3Q2018, Just Eat reports y/y group revenue growth of 41% to GBP195.3mm. Just Eat is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas. 
  • MorphoSys (XTRA: MOR) shares are posting large gains after the company announced positive results of its L-Mind study in relapsed or refractory diffuse large B-cell lymphoma. Results of the study detail that the treatment’s objective response rate rose to 58Z% from 49% in December. 81 total patients have been involved in this study so far. MorphoSys is rated “Top Short” in our European SMID-Cap Global Top Stock Ideas.  
  • Novo Nordisk (NOVOB DC) reported 3Q results in line.  Novo Nordisk reported sales of 27.76 billion krona versus 27.78 krona expected.  Novo Nordisk increased sale growth guidance to 0-1% growth up from -2-0% growth.  Novo Nordisk expanded its share buyback program to 15 billion krona, up 1 billion krona.  Novo Nordisk is rated “Attractive” in our European Large-Cap Global Top Stock Ideas.
  • Royal Dutch Shell (RDSA LN) reported 3Q results a touch below expectations.  Royal Dutch Shell reported CCS earnings of USD$5.62 billion, below consensus of USD$5.73 billion.  Royal Dutch Shell generated USD$12.1 billion in free cash from operations, above 11.2 billion expected.  Royal Dutch Shell said its next round of projects has a breakeven price of only USD$40 for oil.  Royal Dutch Shell is rated “Attractive” in both our European Large-Cap and United Kingdom All-Cap Global Top Stock Ideas.

 

 

What is Going on with European Currencies?

  • EUR€ is currently up +0.734% against the USD$ to 1.1395
  • GBP£ is currently up +1.645% against the USD$ to 1.2976
  • CHF is currently up +0.534% against the USD$ to 0.997

Highlights from the European Bond Market

  • Generic Euro 10-Year Bonds are lower with yields up 1.1 basis points to 0.396%
  • German 10-Year Bunds are lower with yields up 1.1 basis points to 0.396%
  • French 10-Year Government Bonds are lower with yields up 0.5 basis points to 0.756%
  • UK 10-Year GILTs are lower with yields up 1 basis points to 1.447%
  • Italian 10-Year Government Bonds are higher with yields down -5.1 basis points to 3.376%
  • Spanish 10-Year Government Bonds are lower with yields up 1.9 basis points to 1.567%

Euro Stoxx 50 Movers

In local currency.
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Outperformers Sector Price 1D % Chg Volume
ING Groep NV Financials 11.1 6.37%            31,582,899
Anheuser-Busch InBev SA/NV Consumer Staples 67.1 3.15%               1,866,542
Deutsche Bank AG Financials 8.91 2.92%            15,940,887
Banco Bilbao Vizcaya Argentaria SA Financials 5.02 2.70%            15,528,327
Bayer AG Health Care 69.30 2.61%               2,509,348
 
Underperformers Sector Price 1D % Chg Volume
TOTAL SA Energy 50.4 -2.69%               5,046,712
Eni SpA Energy 15.4 -1.90%               8,360,124
adidas AG Consumer Discretionary 204 -1.73%                  511,673
Airbus SE Industrials 96.5 -1.14%               1,361,851
SAP SE Information Technology 93.4 -1.10%               1,804,634