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European stocks close lower on Brexit and US-China trade concerns

Dec 04, 2018

 

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

European Markets

  • European stocks slid lower throughout the day, giving back the previous day's gains, with Brexit and US-China trade concerns driving the profit-taking
  • UK Prime Minister was defeated in Parliment in her attempt to keep the legal advice she received on Brexit private, she will have to provide it to Parliment
  • While President Trump tweeted over the weekend that China had agreed to remove tariffs on car imports his top adviser Larry Kudlow reversed that, saying today that the US does not have an agreement with China yet to lower tariffs on US car imports to China
  • The Euro Stoxx 600 closed down -0.76%, the FTSE 100 declined -0.56%, the DAX fell -1.14%, and the CAC 40 finished down -0.82%
  • US stock futures will trade overnight before Wednesday's suspension of all US stock and fixed income trading during the national day of mouring honoring the death of President George HW Bush
  • Investor sentiment for European stocks finished trading negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.32x
  • Food & Beverage (+0.58%), Health Care (+0.18%), and Utilities (-0.09%) stocks were the top performers in the Euro Stoxx 600 today
  • Automobiles & Parts (-2.52%), Travel & Leisure (-1.97%), and Media (-1.88%) stocks were the worst performers in the Euro Stoxx 600 today
  • 112 stocks in the Euro Stoxx 600 hit 4-week highs while 33 stocks closed at 4-week lows
  • 13 stocks in the Euro Stoxx 600 finished the trading session overbought while 15 stocks closed oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, closed up 0.29 points today to 17.20 after closing at 16.91 yesterday

Stocks Trending in the News

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  • Apple (AAPL) is transferring marketing staff from other divisions to its iPhone division to help boost sales, according to a report in Bloomberg today.  Apple plans to use more aggressive marketing tactics to drive sales.  The articles report that employees describe it as a “fire drill” as Apple scrambles to deliver sales that seem to be trailing expectations.  Apple is rated “Top Buy” in both our US Large-Cap and US Information Technology Global Top Stock Ideas.
  • BMW (BMW) is in talks to join peers in a collaboration on self-driving technology.  BMW is in talks with at least 2 peers to join them in developing the next generation of the technology.  BMW’s head of development said last week that companies that have gone it alone have struggled and that BMW would likely speak with other automakers.  BMW is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas. 
  • BPost SA/NV (ENXTBR: BPOST) shares are spiraling after the company announced that 2019 will be a challenging year. BPost issued a profit warning for FY2019, indicating that FY2019 EBIT will likely be cut below 390mm euros. Management cited radial challenges, the structural decline of mail, and rising labor costs as reasons for the profit warnings. BPost is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas.  
  • Ferguson Plc (FERG) shares are trading lower after reporting FY1Q2019 financials that missed analyst estimates. Ferguson reported EBITA of USD$432mm while analysts expected USD$439mm. FY1Q2019 like-for-like growth of 6.7% implies that like-for-like growth slowed to 5.1% in October after generating 7.5% like-for-like growth in the first 8 weeks of the quarter. Ferguson is rated “Neutral” in our European Large-Cap Global Top Stock Ideas and “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas.  
  • Iliad SA (ENXTPA: ILD) announced the launch of its “Delta” set-top box subscription plan that will include Netflix at no additional cost, Alexa voice assistant, and Vivendi’s myCanal. The cost of the Delta box, which includes a 10-gigabit fiber connection, will be 49.99 euros/month. Iliad is rated “Unattractive” in our European SMID-Cap Global Top Stock Ideas. 
  • Tencent (700 HK) started the IPO for its Tencent Music Entertainment Group yesterday.  The launch of the IPO was positive for Spotify (SPOT) which owns 8.9% of the company.  Spotify rose 3.2% yesterday with the launch of the Tencent Music IPO.   Tencent is selling 82 million ADRs with a price range of USD$13-15, looking to raise up to USD$1.23 billion.  Tencent is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.  Spotify is not rated in our Global Top Stock Ideas. 
  • Visa (V) and Mastercard (MA) sent a letter to the EU offering to cut the fees they charge on foreign transactions in an effort to end the EU antitrust probe.  Visa and Mastercard will reduce the interchange fees charged on debit cards to 0.2% from 0.3% and on credit cards to 1.15% from 1.5%.  The EU said it will study the offer as it reviews the industry and have a response within 6 months.  Visa is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.  Mastercard is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.  

What is Going on with European Currencies?

  • EUR€ is currently little changed against the USD$ at 1.1351
  • GBP£ is currently little changed against the USD$ at 1.2723
  • CHF is currently little changed against the USD$ at 1.0029
     

Highlights from the European Bond Market

  • Generic Euro 10-Year Bonds are higher with yields down -4 basis points to 0.266%
  • German 10-Year Bunds are higher with yields down -4 basis points to 0.266%
  • French 10-Year Government Bonds are higher with yields down -2.5 basis points to 0.669%
  • UK 10-Year GILTs are higher with yields down -2.9 basis points to 1.284%
  • Italian 10-Year Government Bonds are lower with yields up 0.7 basis points to 3.152%
  • Spanish 10-Year Government Bonds are higher with yields down -0.6 basis points to 1.485%

 

Euro Stoxx 50 Movers

In local currency.
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Outperformers Sector Price 1D % Chg Volume
Linde PLC Real Estate 144 2.06%         1,125,463.00
Vinci SA Consumer Discretionary 76.7 1.67%               1,464,955
Koninklijke Ahold Delhaize NV Consumer Discretionary 22.7 1.47%               5,645,022
Sanofi Consumer Discretionary 79.1 1.11%               2,186,534
Unilever NV Information Technology 49.4 1.10%               3,572,277
 
Underperformers Sector Price 1D % Chg Volume
CRH PLC Telecommunication Services 24 -3.77%               1,022,919
Banco Bilbao Vizcaya Argentaria SA Information Technology 4.93 -3.17%            31,396,495
Volkswagen AG Consumer Staples 149 -3.03%               1,274,926
Daimler AG Consumer Staples 50.5 -2.89%               3,693,331
Deutsche Post AG Health Care 28 -2.74%               3,409,823