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Weak EU confidence data limits risk-appetite for European stocks today, UK stocks rally

Jan 30, 2019

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

European Markets

  • European stocks close flat on weak EU confidence data while UK stocks rallied sharply after Parliament's vote to renegotiate Brexit
  • The Euro Stoxx 600 closed up +0.36%, the FTSE 100 advanced +1.58%, the DAX fell -0.33%, and the CAC 40 finished up +0.95%
  • The US Federal Reserve (US Fed) is set to release a decision on interest rates today.  The announcement will be made at 2pm EST with Fed Funds futures currently pricing in no probability of a rate hike.
  • The European January economic confidence indicator falls to 106.2, below 106.8 consensus and down from 107.3
  • While the UK Parliament rejected the recent BREXIT proposal from Prime Minister Theresa May, Parliament did give her the OK to go back to the European Union to see if she can negotiate a better deal
  • Societe Generale gave a presentation to investors last week dicsussing European stocks, saying "No one is interested" and Europe "is becoming irrelevant";' European stocks have seen outflows 45 of the last 46 weeks
  • Investor sentiment for European stocks finished trading positive with the advance/decline ratio for the Euro Stoxx 600 currently at 2.11x
  • Personal & Household Goods (+1.86%), Basic Resources (+1.29%), and Chemicals (+1.06%) stocks were the top performers in the Euro Stoxx 600 today
  • Telecommunications (-0.38%), Industrial Goods & Services (-0.16%), and Insurance (-0.12%) stocks were the worst performers in the Euro Stoxx 600 today
  • 120 stocks in the Euro Stoxx 600 hit 4-week highs while 10 stocks closed at 4-week lows
  • 39 stocks in the Euro Stoxx 600 finished the trading session overbought while 5 stocks closed oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, closed flat today at 16.01 after closing at 16.05 yesterday

Stocks Trending in the News

Click name for Q-Factor score and financial data

  • Advanced Micro Devices (AMD) reported fiscal first quarter 2019 adjusted EPS of 8 cents matching consensus of 8 cents.  AMD fiscal first quarter revenue came at USD$1.42 billion, in line with consensus of USD$1.44 billion.  AMD gave first quarter 2019 revenue guidance of USD$1.2-1.3 billion, well below consensus of USD$1.47 billion.  AMD is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Alibaba (BABA) announced strong FY3Q2019 financials with growth in cloud computing and entertainment offsetting a slowing online retail business. Bernstein observed an adjusted EPS of 12.19 yuan in FY3Q2019 while analysts expected 11.21 yuan/share. Alibaba generated revenue growth of 41% y/y to USD$117.3bn yuan (USD$17.5bn). Bernstein analyst David Dai wrote in his report that, “Alibaba is the dominant and most profitable leader in China e-commerce.” Alibaba is rated “Unattractive” in our China All-Cap Global Top Stock Ideas.
  • Ally Financial (ALLY) announced fourth quarter 2018 adjusted EPS of USD$0.92, beating the highest analyst estimates that ranged between USD$0.79 and USD$0.88.  Ally Financials fourth quarter 2018 revenue came at USD$1.44bn, falling short of consensus of USD$1.53bn. Ally Financial is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Anthem Inc. (ANTM) reported fourth quarter 2018 adjusted EPS of USD$2.15 in line with consensus of USD$2.20.  Anthem fourth quarter 2018 revenue came at USD$23.73 billion, in line with consensus of USD$23.34 billion.   Anthem gave 2019 EPS guidance of USD$19. Anthem is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  
  • Apple (AAPL) reported fiscal first quarter 2019 adjusted EPS of USD$4.18 in line with consensus of USD$4.17.  Apple fiscal first quarter 2019 revenue came at USD$84.3 billion, in line with consensus of USD$83.97 billion.  Apple’s gross margin of 38% matched consensus.  Apple reported its first holiday sales decline since 2001 with iPhone sales falling 15%.  CEO Tim Cook outlined life beyond iPhones with growing sales in services and other Apple products.  Apple gave second quarter 2019 revenue guidance of USD$55-59 billion.  Apple is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • AT&T Inc. (T) reported fourth quarter 2018 adjusted EPS of USD$0.87 in line with consensus of USD$0.86.  AT&T fourth quarter 2018 revenue came at USD$47.99 billion, in line with consensus of USD$48.49 billion.   AT&T added only 134,000 wireless subscribers, below 208,000 consensus. AT&T is rated “Neutral” in our US Large-Cap Global Top Stock Ideas. 
  • Automatic Data Processing (ADP) reported second quarter 2019 adjusted EPS of USD$1.34  beating the highest analyst estimates that ranged between USD$1.16 and USD$1.23.  ADP second quarter 2019 revenue came at USD$3.51bn, beating consensus of USD$3.44bn.   ADP sees FY2019 EPS growth of 17%, falling short of consensus of 19%. ADP is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Boeing (BA) announced CY4Q2018 earnings and CY2019 guidance that sent the stock price soaring. Boeing reported a CY4Q2018 core EPS of USD$5.48, blowing out consensus of USD$4.59. Boeing sees CY2019 between USD$19.90 and USD$20.10, surpassing analyst expectations of USD$18.44. Boeing is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.
  • Check Point Software Technologies (CHKP) announced that it sees revenue for FY2019 between USD$1.94bn and USD$2.04bn while consensus calls for USD$1.99bn. Additionally, Check Point expects adjusted EPS between USD$5.85 and USD$6.25 in FY2019 while analysts expect USD$6.09. Check Point is not rated in our Global Top Stock Ideas.  
  • E-Bay (EBAY) reported fourth quarter EPS of 71 cents above consensus of 68 cents.  E-Bay fourth quarter revenue came at USD$2.88 billion, in line consensus of USD$2.86 billion.  E-Bay gave guidance for first quarter 2019 EPS of 62-64 cents, in line with consensus that is presently 61 cents.  E-Bay is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • General Dynamics Corp. (GD) reported fourth quarter 2018 EPS from continuing operations of USD$3.07, beating the consensus of USD$2.98.  General Dynamics fourth quarter 2018 revenue came at USD$10.38bn, edging past the consensus of USD$10.36bn. General Dynamics is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Industrials Global Top Stock Ideas.
  • Hess Corp. (HES) reported fourth quarter 2018 adjusted loss per share of USD$0.31, narrower than consensus for a USD$0.37 loss per share.  Hess observed a realized crude price/barrel of USD$58.11 in CY4Q2018 compared to USD$55.44 a year prior. Hess is rated “Top Short” in our US Large-Cap Global Top Stock Ideas.
  • Ingersoll-Rand (IR) reported fourth quarter 2018 adjusted EPS of USD$1.31  in line with consensus of USD$1.29.  Ingersoll-Rand fiscal first quarter 2019 revenue came at USD$3.895 billion, in line with consensus of USD$3.85 billion.  Ingersoll-Rand is not rated in our US Large-Cap Global Top Stock Idea
  • Invesco Ltd (IVZ) reported fourth quarter 2018 adjusted EPS of 44 cents well below consensus of 53 cents.  Invesco fourth quarter 2019 revenue came at USD$1.26 billion, in line with consensus of USD$1.3 billion.   Invesco’s assets under management (AUM) came at USD$888.2 billion, below USD$902 billion consensus. Invesco is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas. 
  • Juniper Networks (JNPR) reported fourth quarter adjusted EPS of 59 cents beating by a touch consensus of 57 cents.  Juniper Networks fourth quarter revenue came at USD$1.18 billion, in line with consensus of USD$1.22 billion.  Juniper Networks gave first quarter 2019 EPS guidance of 17-23 cents, well below consensus of 37 cents.  Juniper is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Lonza Group AG (SWX: LONN) surprised investors when it announced that CEO Richard Ridinger is set to step down from his position amid an overhaul to the drug maker’s product portfolio. Marc Funk, who currently heads Lonza’s pharmaceuticals and biotechnology division, will be promoted and take over as CEO. Lonza is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.  
  • LVMH SE (ENXTPA: MC) announced CY4Q2018 financials that sent its stock price and other luxury goods peers higher. LVMH generated organic sales growth of 9% in CY4Q2018, meeting analyst estimates, while its fashion and leather goods business surprised analyst expectations and signaled accelerating market share gains. LVMH is rated “Neutral” in our European Large-Cap Global Top Stock Ideas. 
  • McDonald’s Corp. (MCD) announced CY4Q2018 financial results that largely disappointed investors. McDonald’s US comparable sales rose 2.3% in CY4Q2018, missing consensus for 2.4% growth.  McDonald’s generated adjusted EPS of USD$1.97 in CY4Q2018, edging past analyst expectations for USD$1.89. McDonald's is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our Consumer Discretionary Global Top Stock Ideas.
  • Nasdaq (NDAQ) reported fourth quarter 2018 adjusted EPS of USD$1.26 in line with consensus of USD$1.27.  Nasdaq first quarter 2019 revenue came at USD$645 million, in line with consensus of USD$642.3 million.   Nasdaq offered to buy the Oslo Bors for NK152 per share, countering Euronext’s offer.  Nasdaq is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Royal Caribbean Cruises (RCL) reported fourth quarter 2018 adjusted EPS of USD$1.53, slightly beating consensus of USD$1.51.  Royal Caribbean fourth quarter 2018 revenue came at USD$2.33bn, beating consensus for USD$2.31bn.   Royal Caribbean gave first quarter 2019 adjusted EPS guidance of USD$1.10, higher than analyst expectations for USD$ 1.07. Royal Caribbean is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Silicon Labs (SLAB) announced CY4Q2018 financials and CY1Q2019 guidance that missed the lowest analyst estimates. Silicon Labs generated an adjusted EPS of USD$0.91 while analyst estimates ranged between USD$0.93 and USD$0.95. Silicon Labs sees adjusted EPS of between USD$0.42 and USD$0.52 in CY1Q2018 while analyst estimates ranged between USD$0.72 and USD$0.90. Silicon Labs is rated “Top Buy” in our US SMID-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Stryker Corporation (SYK) reported fourth quarter earnings announced FY2019 guidance that tops analyst expectations. Stryker increased its FY2019 revenue estimate by USD$160mm to USD$14.79bn. JPMorgan analyst Robbie Marcus called the company’s 4Q results a, “picture perfect finish to 2018.” Stryker Corporation is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.  
  • Thermo Fisher Scientific (TMO) reported adjusted EPS for CY4Q2018 that beat the highest analyst estimate. Thermo Fisher generated an adjusted EPS of USD$3.25 in CY4Q2018, beating the highest analyst estimates that ranged between USD$3.16 and USD$3.24. Thermo Fisher also generated revenue of USD$6.51bn while analyst estimates ranged between USD$6.19bn and USD$6.28bn. Thermo Fisher is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas.
  • T. Rowe Price Group (TROW) reported fourth quarter 2018 adjusted EPS of USD$1.54, falling short of consensus of USD$1.66.  T. Rowe fourth quarter 2018 revenue came at USD$1.31bn, falling just short of consensus of USD$1.33bn.   T. Rowe’s assets under management came in at USD$962bn, down 2.9% from the previous quarter. T. Rowe is rated “ Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Vale (VALE) said it will close some of its mining productions involved the recent dam disaster.  The death toll has risen to 84 people and is expected to rise further.  The price of iron ore has surged in the wake of the disaster and Vale is a significant supplier of iron ore to the world.  Vale is rated “Top Short” in our Brazil All-Cap Global Top Stock Ideas.
  • Wirecard AG (XTRA: WDI) shares fell as much as 25% after a report from the Financial Times suggests that one of the company’s senior executives is suspected of using forged contracts for multiple suspicious transactions. The company has since responded via a public statement that reads, “Today the Financial Times has published a false, inaccurate, misleading and defamatory article. This article lacks any substance and is completely meaningless.” Wirecard is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.  

What is Going on with European Currencies?

  • EUR€ is currently little changed against the USD$ at 1.1417
  • GBP£ is currently little changed against the USD$ at 1.306
  • CHF is currently down -0.448% against the USD$ to 1.0009

Highlights from the European Bond Market

  • Generic Euro 10-Year Bonds are higher with yields down -1.2 basis points to 0.188%
  • German 10-Year Bunds are higher with yields down -1.2 basis points to 0.188%
  • French 10-Year Government Bonds are higher with yields down -1.4 basis points to 0.597%
  • UK 10-Year GILTs are higher with yields down -1.4 basis points to 1.255%
  • Italian 10-Year Government Bonds are higher with yields down -3.4 basis points to 2.599%
  • Spanish 10-Year Government Bonds are lower with yields up 1.6 basis points to 1.254%

 

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Euro Stoxx 50 Movers

In local currency.
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Outperformers Sector Price 1D % Chg Volume
LVMH Moet Hennessy Louis Vuitton SE Consumer Discretionary 278 6.87%               1,701,345
Kering SA Consumer Staples 432 3.32%                  351,984
Fresenius SE & Co KGaA Telecommunication Services 45.7 3.16%               1,629,554
Airbus SE Industrials 99 3.07%               2,213,713
Unibail-Rodamco-Westfield Telecommunication Services 158 1.23%                  471,551
 
Underperformers Sector Price 1D % Chg Volume
Banco Santander SA Health Care 4.2 -1.78%            54,931,431
Amadeus IT Group SA Materials 63.2 -1.77%                  747,387
Deutsche Post AG Health Care 25.7 -1.53%               3,499,202
SAP SE Industrials 88.8 -1.09%               2,825,191
Engie SA Industrials 13.9 -1.07%               5,684,232
Global Top Stock IdeasTOP LONG & TOP SHORT STOCK IDEAS FOR GLOBAL MARKETSMONTHLY TOP IDEAS FROM OUR MULTI-FACTOR QUANTITATIVE MODELS
Global Top Stock IdeasTOP LONG & TOP SHORT STOCK IDEAS FOR GLOBAL MARKETSMONTHLY TOP IDEAS FROM OUR MULTI-FACTOR QUANTITATIVE MODELS