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European stocks post tepid gains, rising late-session after strong US jobs data

Feb 01, 2019

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

European Markets

  • European stocks trade lower most of the session and rise late session after strong US jobs data
  • The US added 304,000 non-farm jobs in January, nearly twice the 165,000 expected and the most in almost a year
  • The Euro Stoxx 600 closed up +0.29%, the FTSE 100 advanced +0.74%, the DAX rose +0.07%, and the CAC 40 finished up +0.53%
  • 4Q European earnings have been “good enough” to date, buying stocks valuations to start the year though investors are beginning to worry about vulnerability to potential negative news flow
  • Investor sentiment for European stocks finished trading positive with the advance/decline ratio for the Euro Stoxx 600 currently at 2x
  • Automobiles & Parts (+0.96%), Construction & Materials (+0.96%), and Media (+0.79%) stocks were the top performers in the Euro Stoxx 600 today
  • Banks (-0.45%), Utilities (-0.2%), and Real Estate (-0.18%) stocks were the worst performers in the Euro Stoxx 600 today
  • 199 stocks in the Euro Stoxx 600 hit 4-week highs while 27 stocks closed at 4-week lows
  • 31 stocks in the Euro Stoxx 600 finished the trading session overbought while 4 stocks closed oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, closed down 1.13 points today to 13.98 after closing at 15.11 yesterday

Stocks Trending in the News

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  • Adidas AG (DB: ADS) shares fell after UBS wrote in a note to clients that increased competition and promotional activity in 4Q will hurt the company's product margins. UBS cut Adidas from buy to neutral for this reason. UBS sees Adidas’ gross margins falling by about 20 basis points while consensus calls for a 30 basis point increase. Adidas is rated “Attractive” in our European Large-Cap Global Top Stock Ideas. 
  • Amazon (AMZN) reported fourth quarter 2018 EPS of USD$6.04, above consensus of USD$5.55.  Amazon fourth quarter revenue came at USD$72.4 billion, beating consensus of USD$71.9 billion.  This is Amazon's third record earnings report in a row.  Amazon gave guidance for first quarter 2019 net sales of USD$56-60 billion, below consensus that is presently USD$60.9 billion.  Amazon is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Chevron Corp. (CVX) posted earnings for CY4Q2019 that beat analysts’ consensus. Chevron reported a production increase to 3 million barrels of oil equivalent per day for the first time in its history, despite falling crude oil prices. Chevron sees fiscal first quarter 2019 EPS between USD$ and USD$. Chevron is rated “Neutral” in our US Large-Cap Global Top Stock Ideas. 
  • Cigna Corp. (CI) reported fourth quarter 2018 adjusted EPS of USD$2.46, in line with consensus of USD$2.45.  Cigna Corp. fourth quarter 2018 revenue came at USD$13.75bn, matching consensus.  Cigna Corp. sees 2019 EPS between USD$20 and USD$21. Cigna Corp. is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas.
  • Cypress Semiconductor (CY) reported fourth quarter 2018 adjusted EPS of USD$0.35 missing consensus of USD$0.32.  Cypress Semiconductor fourth quarter revenue came at USD$604.5 million slightly beating consensus of USD$598.9 million.  Cypress Semiconductor gave guidance for first quarter 2019 EPS of USD$0.22-0.26.  Cypress Semiconductor is rated“Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Danske Bank A/S (CPSE: DANSKE) shares traded higher after the company told investors that it does not expect to sustain financial losses as a result of clients leaving due to the company’s money laundering scandal. Last year alone, Danske lost about 11,000 retail customers in Denmark. Danske is rated “Top Short” in our European Large-Cap Global Top Stock Ideas.  
  • Dominion Energy Inc. (D) reported fourth quarter 2018 operating EPS of USD$0.89, in line with consensus of USD$0.90.  Dominion Energy fourth quarter 2018 operating revenue came at USD$3.36bn, slightly above consensus of USD$3.27bn.  Dominion Energy sees fiscal first quarter 2019 EPS between USD$1.05 and USD$1.25, the midpoint of which is slightly above consensus of USD$1.13. Dominion Energy is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Electrolux (OM:ELUX B) announced a comprehensive overhaul of its production of appliances in America.  Electrolux also announced it will spin off a division that makes professional appliances.  Electrolux will close a plant in Memphis and move other production to Chile.  Electrolux reported results above consensus.  Electrolux is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Exxon Mobil Corporation (XOM) reported financials for CY4Q2018 that crushed analyst estimates. Exxon generated an EPS of USD$1.41 in CY4Q2018, largely surpassing consensus of USD$1.08 and beating the highest analyst estimates that ranged between USD$0.89 and USD$1.26.  Exxon also announced that it repurchased USD$425mm of common stock in CY2018. Exxon is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Facebook (FB) is facing seven different data privacy investigations by Irish and EU authorities in the wake of new privacy rules.  Irish authorities said the investigations “are centered on the activities of very big internet companies and their users”. Facebook also reported fourth quarter 2018 adjusted EPS of USD$2.38 beating consensus of USD$2.18.  Facebook is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Fortune Brands (FBHS) reported fourth quarter 2018 adjusted EPS of USD$0.86, below consensus of USD$0.93.  Fortune Brands fourth quarter revenue came at USD$1.42 billion, missing consensus of USD$1.47 billion.  Fortune Brands gave guidance for 2019 EPS of USD$3.53-3.77, below consensus of USD$3.78.  Fortune Brands is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Industrials Global Top Stock Ideas.
  • Honeywell International (HON) reported fourth quarter 2018 adjusted EPS of USD$1.91, edging past consensus of USD$1.89.  Honeywell fourth quarter 2018 revenue came at USD$9.73bn, in line with consensus of USD$9.70bn.  Honeywell sees FY2019 EPS between USD$7.80 and USD$8.10, the midpoint of which surpasses analyst consensus of USD$7.89. Honeywell is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Industrials Global Top Stock Ideas.
  • Johnson Controls International (JCI) reported fiscal first quarter 2019 adjusted EPS from continuing operations of USD$0.26, above consensus of USD$0.24.  Johnson Controls fiscal first quarter 2019 revenue came at USD$5.46bn, in line with consensus of USD$5.48bn.  Johnson Controls FY2019 EPS between USD$1.75 and USD$1.85, the midpoint of which matches analyst consensus for USD$1.80. Johnson Controls is not rated in our Global Top Stock Ideas.
  • KKR & Co. Inc. (KKR) announced fourth quarter 2018 adjusted EPS of USD$0.55, in line with consensus of USD$0.51.  KKR & Co. Reported assets under management of USD$194.7bn as of December 31st, 2018 compared to consensus for USD$191.1bn. KKR & Co. is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Merck & Co. Inc. (MRK) reported fourth quarter 2018 adjusted EPS of USD$1.04, in line with consensus of USD$1.03.  Merck & Co. fourth quarter 2018 revenue came at USD$11.00bn, edging past consensus of USD$10.95bn.  Merck & Co. Inc. sees FY2019 EPS between USD$4.57 and USD$4.72, the midpoint of which slightly missed analyst consensus of USD$4.69. Merck & Co. Inc. is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas.
  • Nintendo Co. (TSE: 7974) saw its largest single-day drop since launching the Switch console in early 2017 after slashing forecasts for FY2019 Switch shipments from 20 million units to 17 million units. Junko Yamamura, an analyst with Nomura Holdings, said that, “Titles that introduce new ways of playing aren’t going viral like before.” Nintendo is not rated in our Global Top Stock Ideas.
  • Roper Technology (ROP) reported adjusted fourth quarter 2018 EPS of USD$3.22 a touch below consensus of USD$3.13.  Roper Technology fiscal first quarter revenue came at USD$72.4 billion, beating consensus of USD$71.9 billion.  Roper Technology gave guidance for first quarter 2019 EPS USD$12-12.40.  Roper Technology is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Stifel Financial (SF) announced CY4Q2018 financials that surpass analysts estimates. Stifel observed USD$1.57 of EPS, beating the highest analyst estimates that ranged between USD$1.42 and USD$4.52. Stifel generated USD$793.4mm of adjusted revenue in CY4Q2018, beating analyst expectations of USD$764.3mm. Stifel is rated “Attractive” in our US SMID-Cap Global Top Stock Ideas.
  • Symantec (SYMC) reported third quarter 2019 adjusted EPS of USD$0.44, beating consensus of USD$0.39.  Symantec third quarter 2019 revenue came at USD$1.21 billion, in line with consensus of USD$1.18 billion.  Symantec works gave fourth quarter 2019 EPS guidance of 37-41 cents, in line consensus.  Symantec is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Wirecard AG (XTRA: WDI) shares tanked after the Financial Times reported that an external law firm found evidence indicating, “serious offenses of forgery and/or of falsification of accounts.” Wirecard has since denied the report, calling it, “inaccurate, misleading, and defamatory.” Wirecard is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.  
     

What is Going on with European Currencies?

  • EUR€ is currently up +0.201% against the USD$ to 1.1471
  • GBP£ is currently little changed against the USD$ at 1.3091
  • CHF is currently little changed against the USD$ at 1.0062

Highlights from the European Bond Market

  • Generic Euro 10-Year Bonds are lower with yields up 1.7 basis points to 0.166%
  • German 10-Year Bunds are lower with yields up 1.7 basis points to 0.166%
  • French 10-Year Government Bonds are lower with yields up 1.9 basis points to 0.573%
  • UK 10-Year GILTs are lower with yields up 2.9 basis points to 1.248%
  • Italian 10-Year Government Bonds are lower with yields up 15.8 basis points to 2.747%
  • Spanish 10-Year Government Bonds are lower with yields up 2.7 basis points to 1.223%

 

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Euro Stoxx 50 Movers

In local currency.
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Outperformers Sector Price 1D % Chg Volume
Daimler AG Consumer Staples 53 2.65%               4,939,226
CRH PLC Telecommunication Services 25.6 2.15%               1,360,239
Kering SA Consumer Staples 446 1.99%                  270,683
LVMH Moet Hennessy Louis Vuitton SE Consumer Discretionary 285 1.75%               1,008,099
Linde PLC Real Estate 144 1.73%                  776,193
 
Underperformers Sector Price 1D % Chg Volume
adidas AG Financials 199 -4.26%               1,264,227
Societe Generale SA Energy 26.5 -2.41%               7,083,539
Nokia OYJ Financials 5.4 -1.96%            25,270,117
Enel SpA Industrials 5.17 -1.82%            43,602,516
Koninklijke Philips NV Financials 33.8 -1.62%               4,576,168
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