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European stocks sell off as EU prepares to escalate budget battle with Italy

Nov 12, 2018


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

European Markets

  • European stocks sold off today, accelerating losses after the US opened lower, as the EU prepares to escalate its budget battle with Italy
  • The Euro Stoxx 600 closed down -1.01%, the FTSE 100 declined -0.74%, the DAX fell -1.77%, and the CAC 40 finished down -0.93%
  • Investor sentiment for European stocks finished trading negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.23x
  • Oil & Gas (+0.11%), Media (+0.05%), and Food & Beverage (-0.11%) stocks were the top performers in the Euro Stoxx 600 today
  • Technology (-3.7%), Personal & Household Goods (-2.13%), and Retail (-1.96%) stocks were the worst performers in the Euro Stoxx 600 today
  • 85 stocks in the Euro Stoxx 600 hit 4-week highs while 26 stocks closed at 4-week lows
  • 29 stocks in the Euro Stoxx 600 finished the trading session overbought while 13 stocks closed oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, closed  moving down -2.14 points today to 14.23 after closing at 16.38 last week

Stocks Trending in the News

Click name for Q-Factor score and financial data

  • Alibaba (BABA) posted sales of USD$30.8 billion on singles day over this weekend.  Alibaba pulled in those sales in the 24-hour period that ended at 12am Sunday.  This was Alibaba’s 10th singles day and it saw sales grow 27% year on year.  Last year Alibaba saw a 37% hike in sales.  Alibaba’s CEO Jack Ma is set to step down shortly, having previously announced his pending retirement.  Alibaba is rated “Neutral” in our China All-Cap Global Top Stock Ideas
  • British American Tobacco (LSE: BATS) shares are falling alongside other large tobacco companies after the Wall Street Journal reported that the Food and Drug Administration (FDA) is planning to propose a ban on menthol cigarettes. An analyst from Morgan Stanley wrote in regards to the possible ban that, “British American Tobacco is the most exposed name to the potential risk,” with the company’s US menthol cigarettes business accounting for 25% of its total earnings. British American Tobacco is rated “Top Buy” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Flughafen Zurich AG (SWX: FHZN) shares are falling after announcing that new guidelines required by the Swiss national regulator would result in its aviation revenue falling by 150mm Swiss francs (USD$148mm). Flughafen shares are falling the most in intraday trading since 2013 with the loss in aviation revenue representing about 25% of the companies’ total top-line. Flughafen Zurich AG is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas. 
  • IQE PLC (AIM: IQE) shares fell substantially today after the company said that it expects a material reduction in its financial performance for the full-year. In a company announcement, IQE detailed that a, “major chip company,” who is, “one of its largest,” customers will be, “materially,” reducing shipments in the current quarter. IQE did not supply financial guidance, however, the company does expect a reduction in financial performance. IQE is rated “Top Short” in our United Kingdom All-Cap Global Top Stock Ideas. 
  • Nyrstar (ENXTBR: NYR) shares have lost nearly half their value in intraday trading after ABN’s Phillip Ngotho warned that Nyrstar’s share value could be wiped out as a result of inevitable debt restructuring. Nyrstar, Europe’s largest zinc smelting company, has faced falling returns from zinc smelting due to lower processing fees and metal prices. As a result of lower zinc mining returns, Nyrstar has been hamstrung by interest payments that will force the company to refinance bonds due next year. Nyrstar is rated “Top Short” in our European SMID-Cap Global Top Stock Ideas.  
  • SAP SE (DB: SAP) will acquire Qualtrics International Incorporated (XM) for USD$8bn in the software company’s largest acquisition to date. The acquisition comes just before Qualtrics’ planned IPO, which the company initially filed for on October 19th, 2018. Qualtrics uses their software to gather and analyze data on customers, brands, employees, and products collected from emails, social media posts, and in-application data -- SAP hopes to leverage the acquisition in order to better understand its customers. SAP is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas. Qualtrics is not rated in our Global Top Stock Ideas.
  • Softbank (9984 JP) is seeking to raise USD$21.1 billion in the IPO of its mobile phone unit.   Softbank is looking to sell 1.6 billion shares at 1,500 yen per share.  Softbank said in its filing that is intends to pay out 85% of net income which would work out to about a 5% yield at present levels.  Many analysts question whether there is appetite for so much stock at this time.  Softbank is rated “Attractive” in our Japan All-Cap Global Top Stock Ideas.

What is Going on with European Currencies?

  • EUR€ is currently down -0.741% against the USD$ to 1.1252
  • GBP£ is currently down -0.917% against the USD$ to 1.2853
  • CHF is currently down -0.272% against the USD$ to 0.9917

Highlights from the European Bond Market

  • Generic Euro 10-Year Bonds are higher with yields down -0.9 basis points to 0.398%
  • German 10-Year Bunds are higher with yields down -0.9 basis points to 0.398%
  • French 10-Year Government Bonds are higher with yields down -0.6 basis points to 0.781%
  • UK 10-Year GILTs are higher with yields down -3.9 basis points to 1.452%
  • Italian 10-Year Government Bonds are lower with yields up 3.5 basis points to 3.438%



Euro Stoxx 50 Movers

In local currency.
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Outperformers Sector Price 1D % Chg Volume
Danone SA Consumer Staples 66 0.56%               2,228,227
Vivendi SA Consumer Discretionary 21.5 0.33%               2,546,285
Eni SpA Energy 15.5 0.21%               8,908,295
Air Liquide SA Materials 107 0.19%                  690,840
Iberdrola SA Utilities 6.57 0.09%               9,051,850
Underperformers Sector Price 1D % Chg Volume
SAP SE Information Technology 89.8 -5.64%               5,416,689
Bayer AG Health Care 68.6 -3.37%               3,376,050
Deutsche Bank AG Financials 8.67 -3.19%            12,252,451
Cie de Saint-Gobain Industrials 31.1 -2.48%               2,216,581
Intesa Sanpaolo SpA Financials 1.96 -2.26%            79,168,154