blog

Latest from the Quantamize Blog

European shares close lower on trade, Brexit and Italian budget concerns

Nov 27, 2018

 

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

European Markets

  • President Trump's trade comments dampened sentiment and sent European stocks lower across the continent
  • Additional tariffs on car imports to the US were also mentioned, further weighing on European stocks
  • Reuters is reporting that EU delegates will vote to start the disciplinary action against Italy's budget despite Italy's apparent willingness to adjust it
  • Brexit approval was thrown in question after the leader of the Democratic Unionists said his party is not bluffing about potentially blocking the deal in Parliment
  • The Euro Stoxx 600 closed down -0.26%, the FTSE 100 declined -0.27%, the DAX fell -0.4%, and the CAC 40 finished down -0.24%
  • Investor sentiment for European stocks finished trading negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.68x
  • Utilities (+0.8%), Telecommunications (+0.79%), and Food & Beverage (+0.43%) stocks were the top performers in the Euro Stoxx 600 today
  • Automobiles & Parts (-2.52%), Basic Resources (-2.37%), and Chemicals (-1.43%) stocks were the worst performers in the Euro Stoxx 600 today
  • 56 stocks in the Euro Stoxx 600 hit 4-week highs while 21 stocks closed at 4-week lows
  • 8 stocks in the Euro Stoxx 600 finished the trading session overbought while 25 stocks closed oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, closed up 0.05 points today to 18.47 after closing at 18.42 yesterday

Stocks Trending in the News

Click name for Q-Factor score and financial data

  • Line Corp (3938 JP) is partnering with Tencent’s (700 HK) WeChat Pay in its push into financial services.  Line Corp will form an alliance with Tencent targeting Chinese visitors to Japan.  This is part of Line’s plan to spend USD$882mn by 2021 to create an all-in-one online communications and entertainment provider.  Tencent s rated “Attractive” in our China All-Cap Global Top Stock Ideas.  Line Corp s not rated in our Global Top Stock Ideas. 
  • Bain Capital is considering a takeover bid for Osram (OSR GR) of Germany, a company with a USD$4.4 billion market value.  Osram shares soared in Germany on the news.  At this point Bain is analyzing the German maker of lighting equipment and neither Bain nor Osram has any comment on the news.  Osram is rated “Unattractive” in our European Global Top Stock Ideas.
  • Shares of Swedish banks Svenska Handelsbank AB (OM: SHB A), Skandinaviska Enskilda Banken AB (OM: SEB A), and Swedbank (OM: SWED A) are all trading higher after Morgan Stanley raised its net interest income estimates for the three banks in 2019 and 2020. Explaining the estimate hike, Morgan Stanley detailed that it belives that current consensus forecasts underestimate the benefits to net interest income on rising interest rates. Svenska Handelsbank is rated “Neutral” in our European Large-Cap Global Top Stock Ideas. SEB is rated “Attractive” in our European Large-Cap Global Top Stock Ideas. Swedbank is rated “Attractive” in our European Large-Cap Global Top Stock Ideas.  
  • Thomas Cook (TCG LN) cut its profit outlook for the third time this calendar year as the fallout from its botched summer continues.  Thomas Cook cut its ebit forecast by 58mnpounds to 250mn pounds.  Thomas Cook suspended its dividend, saving it 9mn pounds.    Thomas Cook was not prepared for the very hot summer and these cuts are the results of that.  Thomas Cook is rated “Top Short” in our United Kingdom Global Top Stock Ideas.
  • Vallourec (ENXTPAA: VK) shares are soaring, posting their largest intraday gains since March 2016, after Bank of America Merrill Lynch analyst Vlad Sergievskii upgraded Vallourec to “Buy”. In a note, Sergievskii said the recent decline of Vallourec is “overdone” and that insolvency concerns were exaggerated. Vallourec is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas.
     

What is Going on with European Currencies?

  • EUR€ is currently down -0.335% against the USD$ to 1.129
  • GBP£ is currently down -0.702% against the USD$ to 1.2737
  • CHF is currently little changed against the USD$ at 1.001

Highlights from the European Bond Market

  • Generic Euro 10-Year Bonds are higher with yields down -1.1 basis points to 0.35%
  • German 10-Year Bunds are higher with yields down -1.1 basis points to 0.35%
  • French 10-Year Government Bonds are higher with yields down -0.8 basis points to 0.731%
  • UK 10-Year GILTs are higher with yields down -1.8 basis points to 1.392%
  • Italian 10-Year Government Bonds are lower with yields up 2 basis points to 3.289%
  • Spanish 10-Year Government Bonds are higher with yields down -0.8 basis points to 1.554%

 

Euro Stoxx 50 Movers

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

Outperformers Sector Price 1D % Chg Volume
Engie SA Utilities 12.7 1.85%               7,871,539
Fresenius SE & Co KGaA Health Care 49.6 1.47%               2,164,820
L'Oreal SA Consumer Staples 208 1.46%                  503,382
Industria de Diseno Textil SA Consumer Discretionary 26.9 1.43%               6,334,332
Unilever NV Consumer Staples 49.09 1.43%               3,740,706
 
Underperformers Sector Price 1D % Chg Volume
Volkswagen AG Consumer Discretionary 148 -4.01%               1,779,095
Banco Bilbao Vizcaya Argentaria SA Financials 4.92 -3.27%            44,196,875
Daimler AG Consumer Discretionary 50.7 -2.41%               3,683,800
BASF SE Materials 65.2 -1.44%               3,233,111
Bayerische Motoren Werke AG Consumer Discretionary 73.9 -1.34%               1,941,777