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European stocks lower, reversing gains after UK cabinet resignations

Nov 15, 2018

 

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

European Markets

  • European stocks opened the session higher, but news of UK cabinet sessions reversed markets, which gave up gains and closed lower
  • Only UK's FTSE 100 showed a gain today, however so slight, on hopes the weaker pound would aid exporters
  • The Euro Stoxx 600 closed down -1.06%, the FTSE 100 advanced +0.06%, the DAX fell -0.52%, and the CAC 40 finished down -0.7%
  • Investor sentiment for European stocks finished trading negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.29x
  • Basic Resources (+0.66%), Oil & Gas (+0.58%), and Chemicals (-0.04%) stocks were the top performers in the Euro Stoxx 600 today
  • Travel & Leisure (-2.51%), Financial Services (-2.31%), and Real Estate (-2.26%) stocks were the worst performers in the Euro Stoxx 600 today
  • 38 stocks in the Euro Stoxx 600 hit 4-week highs while 41 stocks closed at 4-week lows
  • 6 stocks in the Euro Stoxx 600 finished the trading session overbought while 21 stocks closed oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, closed  down -18.45 points today to 0 after closing at 18.45 yesterday

Stocks Trending in the News

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  • Aston Martin Lagonda (LSE: AML) shares are falling after reporting FY3Q2018 financials that disappointed investors, despite nearly doubling sales y/y. Aston Martin reported net income of 282.4mm pounds for the quarter, a y/y increase of 81% while its sales nearly doubled to 1.776bn pounds. What disappointed investors, however, were Aston Martin’s profitability guidance, as the luxury car manufacturer’s adjusted EBITDA margin of 19% largely missed its target for the quarter of 23%. Aston Martin is not rated in our Global Top Stock Ideas. 
  • Bovis Homes (LSE: BVS) shares are declining after the company said that uncertainty surrounding Brexit impacted discretionary spending in Europe. As a result of the uncertainty, Bovis Homes changed its strategy for the second half of the fiscal year to increase its use of part exchange deals, which involves trading in one’s home as part of a payment for a new property. Bovis Homes stressed that it maintained its rate of sales for the second half of the fiscal year. Bovis Homes is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Credit Suisse Group (SWX: CSGN) shares are negative after reports are breaking that the Swiss bank is deliberating hundreds of job cuts. Citing people familiar with the matter, the job cuts could come as early as this year as a part of CEO Tidjane Thiam’s initiative to cut expenses, which is now extending into its fourth year. Credit Suisse did not comment on the story. Credit Suisse is rated “Neutral” in our European Large-Cap Global Top Stock Ideas. 
  • Henkel AG (XTRA: HEN3) shares are posting slight gains in relief of a reported quarterly profit that kept the firm on track to meet its 2018 growth guidance. Henkel generated y/y EPS growth of 2.6% to 1.58 euros/share while reporting organic y/y sales growth of 2.7% to 5.04bn euros. Henkel AG also saw its EBIT margin improve by 40 basis points to 18.4%. Henkel is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Hugo Boss (BOSS GR) announced that it will pay more attention to fashion trends and avoid the fashion mistakes it made in 2015 and 2016.  Hugo Boss will speed up production, personalize clothes more and boost its e-commerce effort significantly.    Hugo Boss guidance is for sales growth of 5-7% for the next 4 years as it seeks to move closer to the “fast fashion” models of other successful retailers.  Hugo Boss is rated “Attractive” in our SMID-Cap Global top Stock Ideas.
  • Royal Bank of Scotland (LSE: RBS) shares are falling the most in 2 years on speculation that British Prime Minister Theresa May’s government may fall apart, which would result in an uncertain future under a labor led administration. In the past, Jeremy Corbyn, the Labour leader, has discussed the potential breakup of the state-controlled lender in order to create new public banks. “RBS is tanking as traders fear the possibility of a Labour led government,” says Shore Capital analyst Gary Greenwood. Royal Bank of Scotland is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas. 
  • Tencent (700 HK, TCEHY) backed Mogu Inc. has reduced its valuation target for its IPO.  Mogu is seeking a USD$2 billion valuation, half the USD$4 billion target when the deal was first announced earlier in the year.  Mogu is an online retailer of fashion and cosmetics with 62.6 million active users.  Tencent is rated “Attractive” in our China All-Cap Global Top Stock Ideas.

What is Going on with European Currencies?

  • EUR€ is currently little changed against the USD$ at 1.1313
  • GBP£ is currently down -1.87% against the USD$ to 1.2749
  • CHF is currently little changed against the USD$ at 0.9937

Highlights from the European Bond Market

  • Generic Euro 10-Year Bonds are higher with yields down -3.8 basis points to 0.36%
  • German 10-Year Bunds are higher with yields down -3.8 basis points to 0.36%
  • French 10-Year Government Bonds are higher with yields down -3.1 basis points to 0.751%
  • UK 10-Year GILTs are higher with yields down -13.3 basis points to 1.373%
  • Italian 10-Year Government Bonds are lower with yields up 0.3 basis points to 3.493%
  • Spanish 10-Year Government Bonds are lower with yields up 1.3 basis points to 1.631%

 

 

Euro Stoxx 50 Movers

In local currency.
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Outperformers Sector Price 1D % Chg Volume
Anheuser-Busch InBev SA/NV Consumer Staples 68 2.43%               2,887,119
Schneider Electric SE Industrials 64.4 1.29%               2,637,722
TOTAL SA Energy 50.1 0.91%               6,529,172
Siemens AG Industrials 101 0.82%               2,587,000
BASF SE Materials 69.7 0.69%               2,800,332
 
Underperformers Sector Price 1D % Chg Volume
CRH PLC Materials 24.7 -4.00%               1,895,989
Engie SA Utilities 12.2 -2.72%               8,614,820
Daimler AG Consumer Discretionary 51.1 -2.35%               5,054,950
ING Groep NV Financials 10.9 -2.27%            19,815,574
Safran SA Industrials 109 -1.75%               1,028,726