blog

Latest from the Quantamize Blog

European stocks rally throughout session on Italian budget optimism, tech rebound

Nov 21, 2018

 

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

European Markets

  • European stocks rallied, rising in the morning and then building on those gains in the second half of the session
  • The strong tech rebound and discsussions of a Fed rate hike pause in 2019 fueled today's gains
  • The Euro Stoxx 600 closed up +1.14%, the FTSE 100 advanced +1.47%, the DAX rose +1.61%, and the CAC 40 finished up +1.03%
  • Investor sentiment for European stocks finished trading positive with the advance/decline ratio for the Euro Stoxx 600 currently at 6.5x
  • Automobiles & Parts (+2.16%), Banks (+1.81%), and Technology (+1.76%) stocks were the top performers in the Euro Stoxx 600 today
  • Health Care (+0.05%), Utilities (+0.25%), and Food & Beverage (+0.65%) stocks were the worst performers in the Euro Stoxx 600 today
  • 19 stocks in the Euro Stoxx 600 hit 4-week highs while 200 stocks closed at 4-week lows
  • 9 stocks in the Euro Stoxx 600 finished the trading session overbought while 108 stocks closed oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, closed down 1.72 points today to 18.23 after closing at 19.96 yesterday

Stocks Trending in the News

Click name for Q-Factor score and financial data

  • Airbus (AIR FP) named Dominick Asam as its new CFO, joining from Infineon Technologies (IFX GR).  Airbus also announced a new COO for its plane making unit, Michael Schollhorn.  Both will take over in April after the present executives leave the company.  Airbus is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.  Infineon is rated “Top Short” in our European Large-Cap Global Top Stock Ideas.
  • Foxconn Technology Group (2317 TT) announced it is aiming to cut 20 billion yuan (USD$2.9 billion) in expenses 2019 according to an internal memo cited in a Bloomberg article.  Foxconn is the largest assembler of iPhones for Apple (AAPL).    The memo highlights Foxconn’s need to cut expenses in its iPhone assembly unit by 6 billion yuan as it will face “a very difficult and competitive year”.  Foxconn will eliminate 10% of its non-technical staff as part of its cost cutting.  The bad news surrounding iPhone demand has sent Apple down over 20% from its October peak, closing in bear territory yesterday.  Foxconn is not rated in our Global Top Stock Ideas.   Apple is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Johnson Matthey (LSE: JMAT) shares posted their largest intraday gains in 14 months after saying that full-year earnings will be towards the top end of guidance. The world’s largest trucking manufacturer is benefiting from increased market share in the European light-truck market as automakers are willing to spend more money on catalysts to reduce emissions. Johnson Matthey is rated “Unattractive” in our United Kingdom All-Cap Global Top Stock Ideas. 
  • Kingfisher PLC (LSE: KGF) shares are trading at their lowest level since September 2011 after announcing FY3Q2018 like-for-like sales that missed analyst expectations. In FY3Q2018, Kingfisher saw its Screwfix business generate like-for-like sales growth of 4.1% while analysts’ consensus called for 5.2%, its Brico Depot business generate like-for-like sales growth of 1.1% while analysts’ consensus called for 1.3%, and its Castorama business generate like-for-like sales growth of –7.3% while analysts’ consensus called for –3.0%. Kingfisher also announced a 50mm pound share buyback. Kingfisher is rated “Unattractive” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Nyrstar NV (BB: NYR) shares are popping after Trafigura Group granted USD$650mm of extra cash to sustain the company. The world’s second-largest producer of zinc has faced crisis of late as it deals with a massive debt burden. The USD$650mm of cash should allow Nyrstar to restructure in the near future. “For the zinc market, this is good,” said Philip Ngotho, an analyst at ABN Abro NV, adding, “for bondholders and shareholders, it doesn’t really change the story.” Nyrstar is rated “Top Short” in our European SMID-Cap Global Top Stock Ideas.
  • Paragon Banking (LSE: PAG) shares posted gains after analysts said that the diversification of their business is driving growth. Shailesh Raikundlia, an analyst from Panmure Gordon who maintains a “Buy” recommendation for Paragon, said the firm’s robust loan growth and better net interest margin drove the company to report pretax profit ahead of consensus by 1%. Phil Dobbin, an analyst from Jefferies who maintains a “Buy” recommendation for Paragon, highlighted the company’s commercial lending and portfolio purchasing units that were ahead of expectations. Paragon is not rated in our Global Top Stock Ideas. 
  • Samsung’s (5930 KS) new Galaxy S10 phone top model will have 6 cameras and a 6.7-inch screen according to a report in the Wall Street Journal.  Samsung is planning a major update for the 10th anniversary of its flagship phone.  The article discusses a top-secret plan to introduce 4 phones in total, 3 with screens between 5.8 and 6.4 inches and fourth top of the line model with 6 cameras-2 in the front, 4 in back.  Samsung is following Apple (AAPL) with the 10th anniversary model, making a major update in an effort to spark sales, which have been slumping.  Apple is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.  Samsung is not rated on our Global Top Stock Ideas. 
  • Swatch (UHR SW) was downgraded at RBC today to sector perform from outperform.  RBC does not see any near-term catalysts for Swatch.  Additionally, RBC sees believes present consensus is too high for Swatch.  A significant risk for Swatch is the growing market for used watches which may further eat into Swatch’s growth prospects.  Swatch is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Tencent (700 HK) backed Tongcheng-Elong Holdings (780 HK) priced its IPO today in Hong Kong.  Tongcheng-Elong Holdings, a Chinese online travel site, priced its IPO at the bottom of the range at HK$9.80, raising USD$180mn.  Tongcheng-Elong Holdings originally intended to raise USD800mn-USD$1 billion.  Tongcheng-Elong Holdings is not rated in our Global Top Stock Ideas.  Tencent is rated “Attractive” in our China All-Cap Global Top Stock Ideas.
  • Thyssenkrupp AG (TKA GR) said it expects profit next year to rise after reporting a fall in full year earnings.  Thyssenkrupp full year net income dropped to 60 million euros after saying of November 8th it expected ~100mn euros.  Fiscal full year ebit came at 1.55 billion euros, below 1.6 billion euros guidance from November 8th.  Thyssenkrupp AG said it expects profit next year to rise after reporting a fall in full year earnings.  Thyssenkrupp 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 1.1384
  • GBP£ is currently down -0.164% against the USD$ to 1.2767
  • CHF is currently little changed against the USD$ at 1.0048

Highlights from the European Bond Market

  • Generic Euro 10-Year Bonds are lower with yields up 2.6 basis points to 0.376%
  • German 10-Year Bunds are lower with yields up 2.6 basis points to 0.376%
  • French 10-Year Government Bonds are lower with yields up 0.8 basis points to 0.766%
  • UK 10-Year GILTs are lower with yields up 1.3 basis points to 1.396%
  • Italian 10-Year Government Bonds are higher with yields down -14.6 basis points to 3.471%
  • Spanish 10-Year Government Bonds are higher with yields down -1.2 basis points to 1.635%
     

 

Euro Stoxx 50 Movers

In local currency.
On Mobile/Tablet scroll to the right.

Outperformers Sector Price 1D % Chg Volume
Volkswagen AG Consumer Discretionary 152 4.53%               1,891,769
ASML Holding NV Information Technology 145 2.85%               2,044,635
Intesa Sanpaolo SpA Financials 1.93 2.83%          124,990,652
LVMH Moet Hennessy Louis Vuitton SE Consumer Discretionary 261 2.68%                  744,474
adidas AG Consumer Discretionary 54.36 2.04%                  656,007
 
Underperformers Sector Price 1D % Chg Volume
Fresenius SE & Co KGaA Health Care 49.4 -0.94%               2,364,818
Sanofi Health Care 78.5 -0.57%               2,440,550
Deutsche Post AG Industrials 27.8 -0.47%               3,190,749
E.ON SE Utilities 9.18 -0.37%            10,273,996
Iberdrola SA Utilities 6.62 -0.15%            14,618,044