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European stocks stage relief rally, close off session highs with modest gains

Dec 07, 2018

 

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

European Markets

  • European stocks closed higher, with modest gains, recouping some of the losses earlier in the week; European stocks gave up some gains late in the session after US markets turned lower
  • White House adviser Peter Navarro said tariffs on Chinese goods would rise at the end of the present 90-day pause if no agreement is reached, his comments turned US market lower
  • The Euro Stoxx 600 closed up +0.62%, the FTSE 100 advanced +1.1%, the DAX fell -0.21%, and the CAC 40 finished up +0.68%
  • OPEC+ agreed to a production cut of 1.2 million bpd, above the 1 million expected 
  • UK Prime Minister Theresa May is considering a plan to postpone the Brexit vote in Parliment where she would likely suffer a massive defeat if held on December 11th as planned, Conservative Party members are encouraging her to take this path though it is not clear how that would happen
  • Investor sentiment for European stocks finished trading positive with the advance/decline ratio for the Euro Stoxx 600 currently at 2.16x
  • Oil & Gas (+2.19%), Construction & Materials (+1.33%), and Basic Resources (+1.3%) stocks were the top performers in the Euro Stoxx 600 today
  • Automobiles & Parts (-0.18%), Health Care (+0.06%), and Insurance (+0.19%) stocks were the worst performers in the Euro Stoxx 600 today
  • 2 stocks in the Euro Stoxx 600 hit 4-week highs while 278 stocks closed at 4-week lows
  • 1 stock in the Euro Stoxx 600 finished the trading session overbought while 98 stocks closed oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, closed down 2.94 points today to 21.66 after closing at 24.61 yesterday

Stocks Trending in the News

Click name for Q-Factor score and financial data

  • Airbus (AIR FP) confirmed an order for 100 single-aisle aircraft from Avalon, the Chinese aircraft leasing company owned by China’s HNA Group.  The order is valued at USD$11.5 billion before any discounts.  The planes are due to be delivered starting in 2023.  Airbus is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Amer Sports Corporation (HLSE: AMEAS), the Finland-based maker of Wilson tennis rackets and Louisville Slugger baseball bats, is being acquired by a group of Chinese investors led by Anta Sports Products Ltd. (SEHK: 2020) for 4.6bn euros (USD$5.2bn). The 4.6bn euro offer equates to 40 euros/share and is an all cash transaction. Amr Sports is rated “Attractive” in our European SMID-Cap Global Top Stock Ideas. Anta Sports is rated “Attractive” in our China All-Cap Global Top Stock Ideas. 
  • Associated British Foods (LSE: ABF) shares are trading lower after reporting that the performance of its Primark clothing chain in November was negatively impacted by a generally tough retail market. Management cited, “very mild weather,” this Autumn as reasoning for the tough broader retail market. Associated British Foods is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas. 
  • Boeing (BA) and Brazil’s Embraer (ERJ) had their deal halted by a federal judge in Sao Paulo.  The injunction was a surprise to both parties.  The judge said no deal can be finalized during the judicial recess in Brazil around the year-end holidays.  The ruling does not kill the deal between Boeing and Embraer, it just does not allow it to be concluded until the courts reopen in Brazil after the year-end recess.  Boeing is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.  Embraer is rated “Neutral” in our Brazil All-Cap Global Top Stock Ideas.
  • Broadcom (AVGO) gave the market something it hasn’t seen much from a tech company-guidance above estimates.  Broadcom’s fiscal 2019 forecast of revenue is ~USD$24.5 billion, present consensus is for USD$22.45 billion.  Broadcom did not provide updated guidance for fiscal 2018.  Broadcom is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Chevron (CVX) announced it is increasing its spending budget by 9.3%, its first hike since 2014.  Chevron is hiking spending even in the face of falling oil prices.  Chevron will spend USD$20 billion this coming year as it doubles down on shale.  Chevron will increase its footprint in the Permian Basin in the coming year.  Chevron is the first of the supermajor oil producers to provide spending guidance.  Chevron is rated “Attractive” in our US Large-Cap Global Top Stock Ideas
  • Fresenius Medical Care (FME GR) issued its second profit warning in the last 2 months.  Fresenius said it will not meet its previously provided guidance until at least 2020.  Fresenius said it will increase investments in its domestic hospital division in Germany, where growth has been sluggish.  Fresenius said it is “cautious” on growth prospects for its Kabi unit, which it sees as one of its main growth drivers.  Fresenius is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Halkbank (IBSE: HALKB) shares are trading higher after a US attorney from the US Attorney’s Office for the Southern District of New York withdrew an application to appeal the length of a prison sentence for Turkish banker Mehmet Hakan Atilla. Atilla was charged with aiding a plot by Iran to avoid sanctions. Halkbank is rated “Top Short” in our European Large-Cap Global Top Stock Ideas.
  • Momo Inc. (MOMO) is being downgraded at Morgan Stanley from overweight to equal-weight. In a note to clients, Morgan Stanley cited that Momo faces slowed economic growth from its top customers and intense competition as reasons for the downgrade. Additionally, Morgan Stanley slashed its price target for Momo by more than half, from USD$61/share to USD$30/share. Momo is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
  • Sino Biopharmaceutical’s (SEHK: 1177) is down nearly 30% over the last two days, its largest two-day slide since 2005, as investors are concerned that the Chinese government is driving generic drug prices lower through its centralized procurement program. Sino Biopharmaceutical is one of the most affected companies in the sector, with 31 of their drugs seeing an average price decrease of 45%. In the last two days, the MSCI China Health Care Index is down 16% while CSPC Pharmaceuticals (SEHK: 1093) is down nearly 20%. Sino Biopharmaceutical is rated “Top Buy” in our China All-Cap Global Top Stock Ideas. CSPC Pharmaceuticals is rated “Top Buy” in our China All-Cap Global Top Stock Ideas. 
  • Softbank (9984 JP), in the middle of the IPO of its telecom unit, had its cellular network go down overnight.  Softbank has previously said the entire USD$23 billion it is seeking to sell had already been sold.  Softbank is holding an emergency meeting with IPO buyers to explain what is happening with its network.  Softbank is rated “Neutral” in our Japan Large-Cap Global Top Stock Ideas. 

What is Going on with European Currencies?

  • EUR€ is currently little changed against the USD$ at 1.1388
  • GBP£ is currently down -0.313% against the USD$ to 1.2741
  • CHF is currently little changed against the USD$ at 1.0085

Highlights from the European Bond Market

  • Generic Euro 10-Year Bonds are lower with yields up 1.3 basis points to 0.249%
  • German 10-Year Bunds are lower with yields up 1.3 basis points to 0.249%
  • French 10-Year Government Bonds are lower with yields up 2.4 basis points to 0.688%
  • UK 10-Year GILTs are lower with yields up 1.9 basis points to 1.265%
  • Italian 10-Year Government Bonds are higher with yields down -7 basis points to 3.132%
  • Spanish 10-Year Government Bonds are higher with yields down -1 basis points to 1.451%
     

 

Euro Stoxx 50 Movers

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

Outperformers Sector Price 1D % Chg Volume
Nokia OYJ Financials 4.9 3.07%            33,773,838
CRH PLC Telecommunication Services 22.8 2.65%               1,368,189
Vinci SA Consumer Discretionary 72.7 2.40%               1,821,018
Eni SpA Utilities 14.1 2.02%            16,737,930
Bayer AG Information Technology 63.4 1.70%               5,372,592
 
Underperformers Sector Price 1D % Chg Volume
Fresenius SE & Co KGaA Telecommunication Services 39 -17.71%            12,540,156
ASML Holding NV Health Care 142 -1.39%               1,407,084
AXA SA Health Care 19.7 -1.26%               9,399,788
Deutsche Post AG Health Care 26.2 -0.83%               3,301,631
Amadeus IT Group SA Materials 61.3 -0.52%                  867,937