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European shares close higher on US-China trade progress and Italian budget optimism

Dec 03, 2018

 

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

European Markets

  • European stocks close higher, driven by positive sentimen on trade and optimism on Italy's budget standoff with the EU
  • The Euro Stoxx 600 closed up +1.03%, the FTSE 100 advanced +1.18%, the DAX rose +1.85%, and the CAC 40 finished up +1%
  • Italy's populist leaders are striking a conciliatory tone again this week, with Deputy Prime Minister Salvini in particular speaking favorably about adjusting lower the country's budget deficit target
  • Investor sentiment for European stocks finished trading positive with the advance/decline ratio for the Euro Stoxx 600 currently at 2.92x
  • Basic Resources (+3.97%), Automobiles & Parts (+3.04%), and Technology (+2.63%) stocks were the top performers in the Euro Stoxx 600 today
  • Real Estate (-1.52%), Telecommunications (-0.6%), and Food & Beverage (-0.42%) stocks were the worst performers in the Euro Stoxx 600 today
  • 30 stocks in the Euro Stoxx 600 hit 4-week highs while 74 stocks closed at 4-week lows
  • 13 stocks in the Euro Stoxx 600 finished the trading session overbought while 33 stocks closed oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, closed down 1.58 points today to 16.91 after closing at 18.49 yesterday

Stocks Trending in the News

Click name for Q-Factor score and financial data

  • Accor SA (ENXTPA: AC), Vinci SA (ENXTPA: DG), and Carrefour SA (CA) shares are all trading lower amid the “Yellow Vest” protests in France on Saturday concerning President Emmanuel Macron’s proposed gas-tax hike. Carrefour and Vinci are the two worst performing stocks in the CAC40 Index today, which is up 1.00% on the day. Consulting firm MKG said last week that earlier protests on November 24th resulted in the cancellation of 10mm euros of hotel reservations. Accor is rated “Neutral” in our European Large-Cap Global Top Stock Ideas. Vinci is rated “Attractive” in our European Large-Cap Global Top Stock Ideas. Carrefour is rated “Neutral” in our European Large-Cap Global Top Stock Ideas. 
  • Bayerische Motoren Werke AG (DB: BMW)Daimler AG (XTRA: DAI)Volkswagen AG (XTRA: VOW3), and other global automobile manufacturer shares are trading higher after US President Donald Trump and China agreed to remove tariffs on American-made cars that severely hindered the global automobile manufacturing industry. BMW is rallying the most in three years on the news. BMW is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas. Daimler is rated “Top Short” in our European Large-Cap Global Top Stock Ideas. Volkswagen is rated “Neutral” in our European Large-Cap Global Top Stock Ideas. 
  • GlaxoSmithKline Plc (LSE: GSK) shares are trading lower after announcing the acquisition of Tesaro Inc. (TSRO) for GBP 4bn (USD$5.1bn). The acquisition price, which translates to an offer price of USD$75/share, is a roughly 62% premium on Tesaro’s Friday’s close. The move to acquire Tesaro, whose stock is down 44% YTD, is a move by CEO Emma Walmsley to revitalize the company’s cancer drug pipeline. GlaxoSmithKline Plc is rated “Top Buy” in our United Kingdom All-Cap Global Top Stock Ideas. Tesaro is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Glencore (LSE: GLEN) has announced that its billionaire had of copper trading and one of the firm’s largest shareholders Aristotelis Mistakidis has retired. With a reputation as one of the world’s most powerful commodity traders, Mistakidis retired amid intense pressure faced from a string of investigation and legal headaches pertaining to the US Department of Justice’s probe of Glencore’s dealings in the Democratic Republic of Congo. Glencore is rated “Neutral” in our European Large-Cap Global Top Stock Ideas and “Unattractive” in our United Kingdom All-Cap Global Top Stock Ideas. 
  • Lululemon (LULU) is in talks to join a Chinese investor group attempting a takeover of Amer Sports Oyj (AMEAS FH) according to a report in Bloomberg today.  The report states that Lululemon is in talks to take about 20% of the deal, though nothing has been confirmed officially.  Lululemon is rated “top Buy” in our US Large-Cap Global Top Stock Ideas.  Amer Sports Oyj is rated “Attractive” in our European SMID-Cap Global Top Stock Ideas.
  • MGM China (2282 HK) shares were up strong overnight on a report from JP Morgan.  JP Morgan said the November gaming revenue growth was impressive, growing at 8.5% in November.  JP Morgan said most important is that the strong numbers bear estimates that were increased recently, the median consensus was for 4% growth.  MGM China is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
  • RPC Group Plc (LSE: RPC) shares are falling after announcing that talks with potential buyers are narrowed to Apollo Global Management after Bain Capital dropped its bid. Apollo Global Management, a US-based private equity company, has until December 21st, 2018 to make an official offer for RPC Group or to end its pursuit. RPC Group is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas. 
  • Unilever (UNA NA) agreed to buy GlaxoSmithKline’s (GSK LN) Indian consumer business for US$3.8 billion.  Unilever is looking to expand its presence in the fast growing economy.   Unilever has been looking to expand further in emerging markets, where it already gets two-thirds of its revenue.  Unilever is rated “Top Buy” in our European Large-Cap Global Top Stock Ideas.  GlaxoSmithKline is rated “Top Buy” in our European Large-Cap Global Top Stock Ideas.  
  • Sands China (SEHK: 1928) shares are trading higher by double-digits after Macau casinos announced November revenue that topped analyst estimates. Macau saw gross casino revenues grow 8.5% y/y to 25bn patacas (USD$3.1bn) while analysts expected growth of just 4%. Analysts had already revised estimates upward in weeks leading up to the announcement, adding to the magnitude of the beat. Sands China is rated “Attractive” in our China All-Cap Global Top Stock Ideas.

 

What is Going on with European Currencies?

  • EUR€ is currently up +0.292% against the USD$ to 1.135
  • GBP£ is currently little changed against the USD$ at 1.2735
  • CHF is currently little changed against the USD$ at 1.0016

Highlights from the European Bond Market

  • Generic Euro 10-Year Bonds are higher with yields down -0.7 basis points to 0.306%
  • German 10-Year Bunds are higher with yields down -0.7 basis points to 0.306%
  • French 10-Year Government Bonds are lower with yields up 1 basis points to 0.694%
  • UK 10-Year GILTs are higher with yields down -5.1 basis points to 1.313%
  • Italian 10-Year Government Bonds are higher with yields down -6.8 basis points to 3.145%

 

Euro Stoxx 50 Movers

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

Outperformers Sector Price 1D % Chg Volume
Kering SA Consumer Staples 414 7.68%            534,587.00
LVMH Moet Hennessy Louis Vuitton SE Consumer Discretionary 265 5.03%               1,373,047
Bayerische Motoren Werke AG Utilities 75.7 4.78%               4,689,978
Daimler AG Consumer Staples 52 4.54%               7,668,362
ASML Holding NV Health Care 154 3.31%               2,077,129
 
Underperformers Sector Price 1D % Chg Volume
Vinci SA Consumer Discretionary 75.4 -2.20%               2,086,704
Sanofi Consumer Discretionary 78.2 -1.99%               2,973,138
Unibail-Rodamco-Westfield Telecommunication Services 150 -1.48%                  620,120
Koninklijke Ahold Delhaize NV Consumer Discretionary 22.4 -1.34%               4,417,602
Orange SA Materials 15 -1.22%               9,317,241