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European stocks close session higher, post best week since late 2016; thawing trade tensions continues this week's rebound

Nov 02, 2018

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

European Markets

  • European stocks close session higher and post best week since late 2016; thawing trade tensions continues this week's rebound where we saw gains in European stocks every day
  • The Euro Stoxx 600 closed up +0.43%, the FTSE 100 declined -0.01%, the DAX rose +0.8%, and the CAC 40 finished up +0.53%
  • Investor sentiment for European stocks finished trading positive with the advance/decline ratio for the Euro Stoxx 600 currently at 2.35x
  • Automobiles & Parts (+2%), Media (+1.49%), and Banks (+1.37%) stocks were the top performers in the Euro Stoxx 600 today
  • Health Care (-0.65%), Food & Beverage (-0.64%), and Oil & Gas (-0.5%) stocks were the worst performers in the Euro Stoxx 600 today
  • 77 stocks in the Euro Stoxx 600 hit 4-week highs while 8 stocks closed at 4-week lows
  • 6 stocks in the Euro Stoxx 600 finished the trading session overbought while 16 stocks closed oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, closed  down -4.76 points today to 14.23 after closing at 19 yesterday

Stocks Trending in the News

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  • Alibaba Group Holding Limited (BABA) shares are trading higher after reporting earnings that largely beat analyst expectations. Alibaba delivers FY2Q2019 adjusted EPS of USD$1.40/share, beating consensus estimates of USD$1.06/share by 31%. Alibaba’s top-line revenue fell just short of analyst forecasts with FY2Q2019 revenue of USD$12.40bn while consensus forecasts called for USD$12.45bn. Alibaba management also pulled-back FY2019 revenue growth guidance by between 4% to 6%. Trump comments on a potential China-US trade resolution has put a further bid into Chinese stocks. Alibaba is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
  • Barclays Plc (LSE: BARC) announced that former Rothschild banker, Nigel Higgins, will succeed John McFarlane as Chairman of Barclay’s Board of Directors. McFarlane will step down from his position with Barclays at the company’s annual general meeting on May 2nd, 2019. Higgins appointment comes as Barclays is facing increased pressure from activist investor, Edward Bramson, who became one of the firm’s largest shareholders in March 2018. Barclays is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas. 
  • Mahindra & Mahindra (MM IN) reported a 17% increase in tractor sales for October.  Mahindra & Mahindra reported 47,376 units sold versus 39.516 a year ago.  Exports were 2% of sales.  Mahindra & Mahindra said demand is strong as festival season approaches.    Mahindra & Mahindra is rated “Attractive” in our India All-Cap Global Top Stock Ideas.
  • MGM China (2282 HK) surged on news Macau casino revenue rose 2.6%.  Total revenue hit a record USD$3.38 billion and the sector is reacting positively.  MGM China is rated “Neutral” in our china All-Cap Global Top Stock ideas.
  • Mitsubishi Corp (8058 JP) increased net income guidance to 640 billion yen but still comes blow average consensus of 654 billion yen.  Mitsubishi Corp booked a one-time charge of 55 billion yen for losses related to Chiyoda Corp.  Mitsubishi Corp expects strong growth from its energy business.  Mitsubishi Corp is rated “Unattractive” in our Japan Large-cap Global Top Stock Ideas.
  • Rosneft (ROSN RS) may invite ExxonMobil (XOM) to participate in Far East project called Eastern Petrochemical according to a report in the local Russian press.  The report outlines a number of options, one of which is to offer ExxonMobil over 50% of the project, having ExxonMobil control, to avoid US sanctions.   Blomberg reports Russian officials mentioned in October that the 2 companies were talking.  ExxonMobil is rated “Neutral” in our US Large-Cap Global Top Stock Ideas, Rosneft is rated “Top Buy” in our European SMID-Cap Global Top Stock Ideas.
  • Senvion S.A. (DB: SEN) shares are trading lower after the company cut its fiscal year guidance and forecasted its EBITDA margin to come in at the lower-end of guidance. Senvion expects its fiscal year adjusted EBITDA margin to be around 5% while its earlier guidance calls for between 5% and 6.5%. Senvion also detailed that it expects to experience short-term disruption in the supply of key components of its turbine product. Senvion is not rated in our Global Top Stock Ideas.  
  • SLM Solutions Group AG (DB: AM3D) shares are falling after the company’s CFO, Uwe Bogershausen, declared himself unavailable for an extension on his appointment set to end in June. Hauck & Aufhaueser published a note last night saying they are, “very disappointed,” about management board changes, detailing that this is a, “highly critical time,” for the company. SLM Solutions also cut its fiscal year revenue guidance from between 115mm euros and 125mm euros to between 90mm euros and 100mm euros.SLM Solutions is rated “Top Short” in our European SMID-Cap Global Top Stock Ideas.  

What is Going on with European Currencies?

  • EUR€ is currently down -0.272% against the USD$ to 1.1377
  • GBP£ is currently down -0.4% against the USD$ to 1.296
  • CHF is currently down -0.15% against the USD$ to 0.9964

Highlights from the European Bond Market

  • Generic Euro 10-Year Bonds are lower with yields up 3.1 basis points to 0.43%
  • German 10-Year Bunds are lower with yields up 3.1 basis points to 0.43%
  • French 10-Year Government Bonds are lower with yields up 2.9 basis points to 0.788%
  • UK 10-Year GILTs are lower with yields up 3.5 basis points to 1.49%
  • Italian 10-Year Government Bonds are higher with yields down -6.6 basis points to 3.314%
  • Spanish 10-Year Government Bonds are lower with yields up 0.7 basis points to 1.575%

Euro Stoxx 50 Movers

In local currency.
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Outperformers Sector Price 1D % Chg Volume
LVMH Moet Hennessy Louis Vuitton SE Consumer Discretionary 279 3.34%                  822,581
BASF SE Materials 69.8 3.29%               4,122,447
Banco Bilbao Vizcaya Argentaria SA Financials 5.16 2.70%            18,390,804
Deutsche Bank AG Financials 9.2 2.55%            15,143,816
Volkswagen AG Consumer Discretionary 155.10 2.42%               2,400,556
Underformers Sector Price 1D % Chg Volume
Fresenius SE & Co KGaA Health Care 55.2 -1.73%               1,783,605
Sanofi Health Care 77.8 -1.40%               1,662,923
Cie de Saint-Gobain Industrials 33 -0.94%               1,379,404
Industria de Diseno Textil SA Consumer Discretionary 25.3 -0.94%            25,731,642
Airbus SE Industrials 95.7 -0.66%               1,148,238