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European stocks give up earlier gains and close mixed after EU warns Italy its budget risks violating fiscal criteria

Nov 08, 2018

 

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

European Markets

  • European stocks start the day strong but give up gains and close mixed after EU warns Italy its budget risks violating fiscal criteria
  • The Euro Stoxx 600 closed up +0.19%, the FTSE 100 advanced +0.33%, the DAX fell -0.45%, and the CAC 40 finished down -0.13%
  • Investor sentiment for European stocks finished trading neutral with the advance/decline ratio for the Euro Stoxx 600 currently at 1.11x
  • Basic Resources (+0.99%), Insurance (+0.95%), and Retail (+0.91%) stocks were the top performers in the Euro Stoxx 600 today
  • Automobiles & Parts (-1.09%), Chemicals (-0.61%), and Oil & Gas (-0.53%) stocks were the worst performers in the Euro Stoxx 600 today
  • 110 stocks in the Euro Stoxx 600 hit 4-week highs while 15 stocks closed at 4-week lows
  • 19 stocks in the Euro Stoxx 600 finished the trading session overbought while 5 stocks closed oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, closed  down -2.19 points today to 14.23 after closing at 16.43 yesterday

Stocks Trending in the News

Click name for Q-Factor score and financial data

  • AAC Technologies (SEHK: 2018) shares are lower today after the company reported CY3Q2018 earnings that missed the lowest analyst estimate. AAC Technologies announced CY3Q2018 net income of 973mm yuan while analyst estimates ranged between 1.16bn yuan and 1.47bn yuan -- consensus called for 1.33bn yuan. AAC Technologies also saw its gross margin in CY3Q2018 fall short of the 39.2% consensus estimate, reporting a gross margin of 37.1%. AAC Technologies cited a sluggish global smartphone market during CY3Q2018 in explaining its poor financials. AAC Technologies is rated “Neutral” in our China All-Cap Global Top Stock Ideas.  
  • AstraZeneca (LSE: AZN) shares are trading higher after the company announced CY3Q2018 product sales that topped analyst estimates by 3% and EBIT for the quarter 7% above analyst estimates. Management attributed “notably” higher product sales to a mix of better figures in their new and old drugs. AstraZeneca’s bottom-line EPS, meanwhile, fell in-line with analyst expectations. AstraZeneca is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas. 
  • Commerzbank (CBK GR) reported 3Q results that were in line and received generally encouraging comments from analysts.  Commerzbank saw 3Q revenue of 2.19 billion euros while 2.17 billion was expected.  Commerzbank 3Q net income of 218mn euros was a touch above 211.9mn euros was consensus.  Commerzbank has added 900,000 customers over the last year and management sees the first sign of recurring business from those new clients.  Commerzbank is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.    
  • Lenovo Group Ltd (SEHK: 992) shares are posting gains after the company announced FY2Q2019 earnings that largely beat the highest analyst forecasts. Lenovo’s FY2Q2019 net income of USD$168.4mm blows past consensus net income estimates of USD$115.7mm -- the highest analyst estimate for Lenovo’s FY2Q2019 net income was USD$127.0mm. Lenovo reported top-line revenue of USD$13.38bn in FY2Q2019 wile consensus called for USD$13.01bn. Lenovo is rated “Top Buy” in our China All-Cap Global Top Stock Ideas.
  • Poste Italiane SpA (BIT: PST) shares are posting notable intraday gains after reporting CY3Q2018 financials that surpassed analyst expectations. Poste Italiane reported CY3Q2018 revenue of 2.52bn euros while consensus called for 2.51bn. Poste Italiane also announced a 5% y/y dividend hike for the quarter to 0.44 euros/share. Poste Italiane is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas. 
  • ProSiebenSat.1 Media (XTRA: PSM) shares are tumbling after the company announced that it expects sales to fall in 2018 and that it will pay out a smaller dividend for the year. ProSiebenSat.1 Media will take a one-time 400mm euro charge related to licensing rights as the company renegotiates US studio contracts. ProSiebenSat.1 media will also begin investing in streaming services to complete with companies like Netflix and Amazon. PrioSiebenSat.1 Media is rated “Attractive” in our European SMID-Cap Global Top Stock Ideas. 
  • Siemens AG (DB: SIE) shares are slightly higher today after the company increased its dividend and provided positive 2019 guidance. Siemens’ management discussed that favorable market conditions in 2019 should result in a profit margin between 11% and 12%. On top of the dividend hike from 3.70 euros per share to 3.80 euros per share, Siemens announced a plan to buy back 3bn euros worth of shares. Siemens is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Societe Generale (ENXTPA: GLE) shares are rising after reporting CY3Q2018 EPS that significantly beat analyst expectations. Societe Generale’s CY3Q2018 net income of 1.23bn euros surpassed the largest analyst estimates that ranged between 823.0mm euros and 1.19bn euros. Notably, Societe Generale saw its equity trading, which has traditionally been a strength for the company, jump 19% for the quarter, its first gain in more than a year. Societe Generale is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas. 
  • Toshiba (TSE: 6502) shares are spiking after the company announced that it will sell its Toshiba American LNG Corp. unit to China’s ENN Ecological Holdings Co. (SHSE: 600803) for USD$15mm. Toshiba also agreed to pay ENN USD$821mm in order to receive all LNG (liquified natural gas) produced by Toshiba American LNG Corp.  Toshiba is not rated in our Global Top Stock Ideas.  
  • UniCredit (IBIT: UCG) shares are trading lower after the company announced a surprise one-time charge of 850mm euros (USD$972mm) related to its Turkish bank. According to management, the charge was caused by a revaluation of its Istanbul-based Yapi Kredi Bankasi AS which required an increase in funds to cover a potential settlement related to US sanctions on Iran. UniCredit was forced to pull-back its full-year revenue guidance due to the charge, however, the company maintained its 2019 profit target. UniCredit is rated “Top Short” in our European Large-Cap Global Top Stock Ideas. 

What is Going on with European Currencies?

  • EUR€ is currently little changed against the USD$ at 1.1411
  • GBP£ is currently little changed against the USD$ at 1.311
  • CHF is currently little changed against the USD$ at 0.9963

Highlights from the European Bond Market

  • Generic Euro 10-Year Bonds are lower with yields up 1 basis points to 0.457%
  • German 10-Year Bunds are lower with yields up 1 basis points to 0.457%
  • French 10-Year Government Bonds are lower with yields up 0.9 basis points to 0.822%
  • UK 10-Year GILTs are lower with yields up 3.2 basis points to 1.565%
  • Italian 10-Year Government Bonds are lower with yields up 5.9 basis points to 3.396%
  • Spanish 10-Year Government Bonds are lower with yields up 0.6 basis points to 1.608%

 

 

Euro Stoxx 50 Movers

In local currency.
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Outperformers Sector Price 1D % Chg Volume
Societe Generale SA Financials 33.9 2.14%               6,164,429
Koninklijke Ahold Delhaize NV Consumer Staples 22.1 1.42%               7,361,346
adidas AG Consumer Discretionary 201 1.21%                  882,199
Allianz SE Financials 187 0.98%               1,259,764
Telefonica SA Telecommunication Services 14.63 0.94%            11,806,819
 
Underperformers Sector Price 1D % Chg Volume
Fresenius SE & Co KGaA Health Care 54.4 -2.55%               2,296,193
Volkswagen AG Consumer Discretionary 151 -2.36%               1,292,793
Daimler AG Consumer Discretionary 51.3 -1.91%               4,393,933
LVMH Moet Hennessy Louis Vuitton SE Consumer Discretionary 271 -1.90%                  622,981
Anheuser-Busch InBev SA/NV Consumer Staples 65.6 -1.81%               1,653,044