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European stocks close lower on light volume, on track for worst year since 2008

Dec 24, 2018

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

European Markets

  • European stocks closed lower in light volume and are on track for the worst year since 2008
  • The Euro Stoxx 600 closed down -0.42%, the FTSE 100 declined -0.52%, the DAX rose 0%, and the CAC 40 finished down -1.45%
  • Italian PM Giuseppe Conte has vowed to continue his coalition's expansionist policies, despite recent negotiations with the EU over its budget  
  • WTI crude us falling 4.2%, trading at $43.71, driven lower by continued worries about growing crude oil supplies in the US and decelerating global growth, overshadowing indications from OPEC that the group may make further cuts to CY2019 production targets
  • Investor sentiment for European stocks finished trading negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.16x
  • Insurance (+0.02%), Automobiles & Parts (-0.09%), and Health Care (-0.09%) stocks were the top performers in the Euro Stoxx 600 today
  • Retail (-1.41%), Personal & Household Goods (-1.13%), and Banks (-0.74%) stocks were the worst performers in the Euro Stoxx 600 today
  • 7 stocks in the Euro Stoxx 600 hit 4-week highs while 247 stocks closed at 4-week lows
  • 6 stocks in the Euro Stoxx 600 finished the trading session overbought while 77 stocks closed oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, closed  moving down -20.4 points today to 0 after closing at 20.4 last week

Stocks Trending in the News

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  • AbbVie (ABBV) is teaming up with Indian drugmaker Lupin (BSE: 500257) to work together on cancer treatments.  AbbVie and Lupin will work to develop and commercialize treatments for hematological cancers, according to a statement from Lupin.  AbbVie is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  Lupin is not rated in our Global Top Stock Ideas.
  • Amazon (AMZN) has received a request from the SEC to disclose how much of its revenue comes from its Prime customers, according to a report in the Wall Street Journal.  Amazon has reportedly refused the request from the SEC.  The request is part of a broader effort from the SEC to learn more about companies’ sources of revenue.  Amazon is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • BMW (DB: BMW) is facing a criminal probe in South Korea over safety issues.  BMW is alleged to have concealed safety issues related to fire hazards and delayed recalls.  BMW was also fined USD$10mn for delayed recalls related to a coolant leak problem.  BMW has been under investigation for that issue separately since August.  BMW is rated “Unattractive” in our European Global Top Stock Ideas.
  • Euronext (ENXTPA: ENX) has made an offer to acquire the Oslo Stock Exchange.  Euronext is offering USD$712mn for the Norwegian exchange.  Euronext has already secured backing from almost half of the Oslo Exchange’s shareholders.  The initial offer is a 32% premium to last valuation.  Euronext is rated "Top Buy" in our European SMID-Cap Global Top Stock Ideas.
  • ExxonMobil (XOM) has halted its mapping activities off the coast of Guyana after the Venezuelan navy “aggressively” interrupted the activities.  ExxonMobil was mapping in the Stabroek block, an area Venezuela has disputed with Guyana.  The block in question is expected to yield a large amount of oil, ExxonMobil has upped its estimate there 3 times this year.  ExxonMobil is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Fresh Del Monte Produce (FDP) call options trading reached 2-year high volume levels pre-market today. Fresh Del Monte call options volume totaled 501 this morning, 10x more than the 20-day average and the most since November 16th, 2016.  Fresh Del Monte is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas and “Top Short” in our US Consumer Staples Global Top Stock Ideas. 
  • JD.com (JD) CEO Richard Liu will not be charged with rape by US authorities and has been freed from jail.  The CEO and founder controls the USD$35 billion Chinese e-commerce giant and his arrest in August had been hanging over the company.  JD.com is rated “Top Short” in our China All-Cap Global Top Stock Ideas 
  • Mindbody (MB) will be taken private by Vista Equity Partners in a USD$1.9 billion deal.  Mindbody is a software developer for yoga, Pilates and other fitness centers.  Vista Equity Partners is paying a 27% premium to Friday’s closing price.  Mindbody has 30 days to shop the offer around and find a better deal, with no penalty if it finds a better suitor.  Mindbody is rated “Neutral” in our SMID-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Perrigo Co Plc (PRGO) was upgraded today by IBI Research to outperform from market perform.  IBI raised Perrigo’s target price to USD$6y, up from USD$47.  The average price target is USD$69.45.  The upgrade comes in the wake of Perrigo’s 29% tumble on Friday on its announcement of an unexpected tax assessment.  Perrigo is not rated in our Global Top Stock Picks.  Euronext is rated “Top Buy” in our US SMID-Cap Global Top Stock Ideas.
  • Playtech PLC (LSE: PTEC) shares are falling after reporting that Italy’s plans to increase their tax on gambling activities will result in a reduced FY2019 adjusted EBITDA for the company. After the Italian Senate passed the country’s 2019 budget on Sunday, Playtech expects a material decrease in EBITDA for FY2019 by between 20mm euro and 25mm euro. Playtech is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas.
  • The Royal Bank of Scotland (LSE: RBS) has applied for a German banking license.  The banking license is being set up to help The Royal Bank of Scotland retain clients in the EU in the event of a no-deal Brexit.  Royal Bank of Scotland is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Snap (SNAP) employees are questioning the management style of its CEO, which many call distant and aloof, according to a Wall Street Journal article.  CEO Evan Spiegel flies in a private jet alone and requested and received armed security, and with the company’s stock below $5, employees are questioning the need for these things.  Snap is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Information Technology Global Top Stock Ideas.
  • Tesla (TSLA) shares are falling after reporting it will cut its car prices in China.  The price cut comes after China agreed to lower tariffs on cars imported from the US.  Telsa said it will cover the cost of any tariffs customers paid on cars that did not arrive before the tariffs were cut.  Tesla is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Uniper SE (XTRA: UN01) is in talks to sell its power generation assets in France as it seeks to leave the country.  Uniper is in talks with Energeticky a Prumyslovy Holding AS of the Czech Republic to acquire all 2,250 MW of generation assets in France.  Bloomberg Intelligence reports the assets could be valued at up to USD$342mn.  Uniper is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas.
  • UPS (UPS)  has agreed to settle a lawsuit with the US Equal Employment Opportunity Commission over uniform issues.  The EEOC alleges that UPS refused to hire individuals who had beards or long hair for religious reasons, also saying when it did hire these individuals, they were segregated at the company.  UPS settled the case for USD$4.9mn.  UPS is rated “Top ” in our US Large-Cap Global Top Stock Ideas and  “Attractive” in our US Industrials Global Top Stock Ideas.

What is Going on with European Currencies?

  • EUR€ is currently up +0.405% against the USD$ to 1.1418
  • GBP£ is currently up +0.633% against the USD$ to 1.2725
  • CHF is currently up +0.746% against the USD$ to 1.0124

Highlights from the European Bond Market

  • Generic Euro 10-Year Bonds are flat with yields little changed 0 basis points to 0.25%
  • German 10-Year Bunds are flat with yields little changed 0 basis points to 0.25%
  • French 10-Year Government Bonds are flat with yields little changed 0 basis points to 0.697%
  • UK 10-Year GILTs are higher with yields down -5.8 basis points to 1.263%
  • Italian 10-Year Government Bonds are flat with yields little changed 0 basis points to 2.831%

 

Euro Stoxx 50 Movers

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

Outperformers Sector Price 1D % Chg Volume
Deutsche Post AG Health Care 24.1 1.69%               9,461,907
BASF SE Utilities 60.7 1.62%               8,841,494
Linde PLC Real Estate 137 1.03%            10,733,083
CRH PLC Telecommunication Services 22.5 0.71%                  103,628
Daimler AG Consumer Staples 46.8 0.64%            11,141,282
 
Underperformers Sector Price 1D % Chg Volume
LVMH Moet Hennessy Louis Vuitton SE Consumer Discretionary 245 -3.27%                  223,339
Unibail-Rodamco-Westfield Telecommunication Services 135 -2.44%                  223,255
Kering SA Consumer Staples 387 -2.30%                     63,035
Industria de Diseno Textil SA Materials 22.3 -2.20%                  923,690
Unilever NV Information Technology 47 -2.03%               1,085,623