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European stocks sell off on trade pessimism after opening session with gains

Nov 19, 2018

 

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

European Markets

  • European stocks started the session with gains but building pesssimism on trade turned the market, with losses in the US pulling Europe even lower, closing at the lows of the session
  • The Euro Stoxx 600 closed down -0.73%, the FTSE 100 declined -0.19%, the DAX fell -0.85%, and the CAC 40 finished down -0.79%
  • Investor sentiment for European stocks finished trading negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.37x
  • Telecommunications (+0.36%), Utilities (+0.05%), and Banks (-0.17%) stocks were the top performers in the Euro Stoxx 600 today
  • Technology (-1.97%), Industrial Goods & Services (-1.38%), and Personal & Household Goods (-1.26%) stocks were the worst performers in the Euro Stoxx 600 today
  • 35 stocks in the Euro Stoxx 600 hit 4-week highs while 60 stocks closed at 4-week lows
  • 11 stocks in the Euro Stoxx 600 finished the trading session overbought while 39 stocks closed oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, closed down 0.04 points today to 18.04 after closing at 18.08 last week

Stocks Trending in the News

Click name for Q-Factor score and financial data

  • Amazon (AMZN) is planning to be your last minute savior at Thanksgiving this year, offering last minute delivery of groceries until 2pm.  Amazon is looking to gain an edge helping customers with last minute meal prep.  Amazon is experimenting with this service as it seeks to gain an edge.  It is trying build on its success in last minute delivery for Christmas last year.  Amazon is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Charles Schwab (SCHW) was downgraded at UBS today.  UBS cut the stock to neutral from buy.  UBS also cut the price target of Charles Schwab to USD$51 from USD$57.  UBS comments that while Charles Schwab is growing faster than traditional asset managers UBS sees “compression on market sensitive revenues” going forward which contributed to the downgrade.  Charles Schwab is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Diploma PLC (LSE: DPLM) shares are trading higher after reporting FY2018 results that were ahead of analyst expectations. Diploma delivered FY2018 revenue that increased 7% from the prior year and operating profit that increased 9% from the prior year. Diploma also raised its FY2018 dividend by 11% to 25.5 pounds/share. Diploma is not rated in our Global Top Stock Ideas.
  • JD.com (JD) shares are lower in pre-market trading after posting lower-than-expected revenue for FY3Q2018 and recording its first q/q drop in annual active users since initially listing. JD.com reported FY3Q2018 revenue of 104.8bn yuan while analysts’ consensus called for 105.7bn yuan.  Annual active users, meanwhile, grew 15% y/y to 305.2mm, although it fell 2.74% q/q from 313.8mm in FY2Q2018. JD.com is rated “Top Short” in our China All-Cap Global Top Stock Ideas.
  • The CEO of Renault-Nissan-Mitsubishi, Carlos Ghosn, has been arrested in Japan for financial improprieties, according to the Japanese press.  Nissan (7201 JP) confirmed he had underreported income “over many years” and he was taken into custody overnight.  Renault (RNO FP) and Mitsubishi (7011 JP) have yet to make a statement on the matter.  Nissan also said it will remove him as chairman.  Nissan is rated is rated “Attractive” in our Japan Large-Cap Global Top Stock Ideas.    Mitsubishi is rated “Top Buy” in our Japan Large-Cap Global Top Stock Ideas.  Renault is rated “neutral” in our European Large-Cap Global Top Stock Ideas.
  • Novo Nordisk (NOVOB DC) was upgraded to overweight from neutral by JP Morgan today.  Novo Nordisk has its price target hiked to 340 kroner from 290 kroner.  Novo Nordisk is entering “a new period of sustainable growth” well into 2019 and is expected to drive outperformance, according to JP Morgan’s report.    Novo Nordisk is rated “neutral” in our European Large-Cap Global Top Stock Ideas.
  • Salvatore Ferragamo (BIT: SFER) shares are trading lower after Bank of America Merrill Lynch downgraded the Italian shoemaker from “Neutral” to “Underperform”.  Bank of America Merrill Lynch cited a slowdown of demand in the luxury goods sector as reasoning for the downgrade. Salvatore Ferragamo is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas. 
  • The Swatch Group AG (SWX: UHR) shares are sliding after a team of analysts from Ashley Wallace cited “particularly weak” demand for watches in China. Ashley Wallace analysts went on to discuss that they have met with other watch retailers who have observed similar declines in demand, saying, “the risk is to the downside.” Last week, Mainfirst cut Swatch’s price target from 500 Swiss francs to 340 Swiss francs. Swatch is rated “Neutral” in our European Large-Cap Global Top Stock Ideas. 
  • Vallourec (VK FP) shares have fallen to the lowest level in a year after 2 downgrades to the stock.  Vallourec was downgraded at SocGen to sell from hold with its price target lowered to 2.28 euros.  Kepler Cheuvreux cut Vallourec to hold from buy while cutting the price target to 3.40 euros.  The downgrades come in the wake of Vallourec reporting cash outflows in 3Q, igniting concern among investors.  Vallourec is rated “neutral” in our European SMID-Cap Global Top Stock Ideas.
  • Xiaomi (1810 HK) reported a 49% jump in 3Q revenue, above expectations, on the strength of sales in emerging markets.  Xiaomi reported revenue of 50.85 billion yuan compared with 50.4 billion expected.  Xiaomi net income of 2.48 billion yuan compared with 1.45 billion expected.  Xiaomi is rated “Neutral” in our China All-Cap Global Top Stock Ideas.

What is Going on with European Currencies?

  • EUR€ is currently up +0.237% against the USD$ to 1.1442
  • GBP£ is currently little changed against the USD$ at 1.2841
  • CHF is currently up +0.58% against the USD$ to 1.006

Highlights from the European Bond Market

  • Generic Euro 10-Year Bonds are lower with yields up 0.6 basis points to 0.373%
  • German 10-Year Bunds are lower with yields up 0.6 basis points to 0.373%
  • French 10-Year Government Bonds are lower with yields up 1.6 basis points to 0.78%
  • UK 10-Year GILTs are higher with yields down -3.4 basis points to 1.378%
  • Italian 10-Year Government Bonds are lower with yields up 10.6 basis points to 3.597%

 

Euro Stoxx 50 Movers

In local currency.
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Outperformers Sector Price 1D % Chg Volume
Volkswagen AG Consumer Discretionary 147 1.95%               1,666,098
Enel SpA Utilities 4.56 1.38%            30,525,925
E.ON SE Utilities 9.21 0.82%               8,822,208
Bayerische Motoren Werke AG Consumer Discretionary 74.2 0.60%               1,711,054
ING Groep NV Financials 10.88 0.39%            12,060,996
 
Underperformers Sector Price 1D % Chg Volume
SAP SE Information Technology 89 -3.00%               3,119,886
Fresenius SE & Co KGaA Health Care 51.5 -2.94%               2,239,483
ASML Holding NV Information Technology 144 -2.56%               1,704,676
adidas AG Consumer Discretionary 201 -1.91%                  658,543
LVMH Moet Hennessy Louis Vuitton SE Consumer Discretionary 259 -1.89%                  665,625