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European stocks rally, close higher on PMI revisions higher

Feb 05, 2019

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

European Markets

  • European stocks rally with the revision of PMIs higher fueling risk-on sentiment today 
  • The Euro Stoxx 600 closed up +1.41%, the FTSE 100 advanced +2.04%, the DAX rose +1.71%, and the CAC 40 finished up +1.66%
  • Euro area January 2019 composite PMI revised to 51 vs an initial flash reading 50.7 
  • Germany January 2010 composite PMI revised to 52.1 vs initial flash reading 52.1 
  • France January 2019 composite PMI revised to 48.2 vs initial flash reading 47.9 
  • U.K. January 2019 composite PMI comes in at 50.3 vs 51.4 estimate
  • The MSCI All Country index, a proxy for global stocks, has already recovered 50% of CY2018’s losses YTD with the index now +8.35%
  • Investor sentiment for European stocks finished trading positive with the advance/decline ratio for the Euro Stoxx 600 currently at 10.11x
  • Personal & Household Goods (+2.3%), Construction & Materials (+2.3%), and Retail (+1.83%) stocks were the top performers in the Euro Stoxx 600 today
  • Real Estate (-0.31%), Basic Resources (+0.32%), and Insurance (+0.53%) stocks were the worst performers in the Euro Stoxx 600 today
  • 100 stocks in the Euro Stoxx 600 hit 4-week highs while 23 stocks closed at 4-week lows
  • 37 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 0.63 points today to 13.58 after closing at 14.21 yesterday

Stocks Trending in the News

Click name for Q-Factor score and financial data

  • Alphabet (GOOGL) reported fourth quarter EPS of USD$12.77 missing consensus of USD$13.04.  Alphabet fourth quarter revenue came at USD$39.29 billion matching consensus of USD$38.98 billion.  Alphabet reported USD$7 billion on capital expenditures, well above USD$5.2 billion expected. Paid clicks on Google properties grew 66% y/y.  Alphabet is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Archer-Daniels-Midland Co. (ADM) reported CY4Q2018 earnings that missed the average analyst estimate. On a conference call with analysts, CEO Juan Luciano said, “Our assumption is not that the trade deal is resolved now in the first quarter, we have it more like half of the year.”  Analysts were surprised that Archer-Daniels-Midland is basing their FY2019 guidance on a resolution to the trade war when there is no imminent deal. Archer-Daniels-Midland is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Staples Global Top Stock Ideas.  
  • Becton Dickinson & Co. (BDX) reported CY4Q2018 adjusted EPS of USD$2.70 in line with analyst expectations for USD$2.61. Becton Dickinson generated USD$4.16bn of revenue in CY4Q2018 while consensus called for USD$4.11bn. Becton Dickinson expects CY2019 EPS to come between USD$12.05 and USD$12.15. Becton Dickinson is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • BP Plc (LSE: BP) joined its global oil giant peers in reporting CY4Q2018 financials that surpassed analyst expectations. BP reported CY4Q2018 adjusted EBIT of USD$6.28bn, beating the highest analyst estimates that ranged between USD$3.86bn and USD$5.51bn. BP also announced net income of USD$3.48bn in CY4Q2018 that largely beat consensus of USD$2.64bn. BP is rated “Attractive” in our United Kingdom All-Cap Global Top Stock Ideas. 
  • Centene Corp. (CNC) announced CY4Q2018 adjusted EPS of USD$1.38 while consensus was for USD$1.32. Centene Corp. reported revenue of USD$16.6bn in CY4Q2018 while analysts expected USD$16.33bn. Centene Corp. sees CY2019 split adjusted EPS between USD$4.11 and USD$4.31. Centene Corp. is rated “Attractive” in our US Large-Cap Global Top Stock Ideas. 
  • Church & Dwight Co. (CHD) announced CY4Q2018 adjusted EPS of USD$0.57 in line with consensus of USD$0.58. Church & Dwight Co. reported revenue of USD$1.07bn in CY4Q2018 matching consensus for USD$1.07bn. Church & Dwight Co. sees FY2019 adjusted EPS between USD$2.43 and USD$2.47, missing consensus for USD$2.48. Church & Dwight Co. is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Staples Global Top Stock Ideas.
  • Distribuidora Internacional de Alimentacion, S/A (BME: DIA) shares soared more than 50% on Monday after LetterOne, the investment vehicle for Russian billionaire Mikhail Fridman, announced a takeover bid. LetterOne is offering 800mm euros (USD$913mm) for the troubled European grocer. LetterOne already owns 29% of DIA shares. DIA is rated “Top Short” in our European SMID-Cap Global Top Stock Ideas.  
  • Emerson Electric Co. (EMR) announced FY1Q2019 EPS from continuing operations of USD$0.74 while consensus was for USD$0.66. Emerson Electric reported revenue of USD$4.15bn in FY1Q2019 while analysts expected USD$4.21bn. Emerson Electric sees FY2019 adjusted EPS between USD$3.60 and USD$3.75, the midpoint of which beats consensus for USD$3.63. Emerson Electric is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Industrials Global Top Stock Ideas.
  • Energizer Holdings (ENR) reported FY2019 adjusted EPS guidance that beat analyst estimates while announcing an adjusted EPS for FY1Q2019 that also surpassed analyst expectations. Energizer generated an adjusted EPS of USD$1.64 while consensus was for USD$1.54. Energizer sees adjusted EPS between USD$3.45 and USD$3.55 in FY2019 while consensus called for just USD$3.40. Energizer is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Staples Global Top Stock Ideas.
  • Entegris Inc. (ENTG) reported FY1Q2019 adjusted EPS of USD$0.47 in line with analyst expectations for USD$0.45. Entegris Inc. generated USD$401.6 mn of revenue in FY1Q2019 while consensus called for USD$391.4mn. Entegris Inc. expects FY2Q2019 EPS to come between USD$0.42 and USD$0.47. Entegris Inc. is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas. 
  • Estee Lauder Cos. Inc. (EL) reported FY2Q2019 adjusted EPS of USD$1.86 well above analyst expectations for USD$1.55.  Estee Lauder Cos. expects FY2019 EPS to come between USD$4.92 and USD$5.00. Estee Lauder Cos. is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Staples Global Top Stock Ideas.
  • Gilead Sciences (GILD) reported fourth quarter adjusted EPS of USD$1.44 missing consensus of USD$1.70.  Gilead Sciences fourth quarter revenue came at USD$5.8 billion beating consensus of USD$5.52 billion.  Gilead Sciences raised its quarterly dividend to 63 cents, up from 57 cents, and above 62 cents expected.  Gilead Sciences is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Lazard Ltd. (LAZ) reported CY4Q2018 adjusted EPS of USD$0.94 surpassing analyst expectations for USD$0.91. Lazard generated USD$684.5mm of operating revenue in CY4Q2018 while consensus called for USD$666.8mm. Lazard is not rated in our Global Top Stock Ideas.
  • Lumentum Holdings (LITE) announced FY2Q2019 adjusted EPS of USD$1.15 while consensus was for USD$1.17. Lumentum Holdings reported revenue of USD$373.7mm in FY2Q2019, beating analyst expectations for USD$357.4mm. Lumentum Holdings sees FY2019 adjusted EPS between USD$0.76 and USD$0.94, the midpoint of which misses concensus for USD$0.93. Lumentum Holdings is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Pandora A/S (CPSE: PNDORA) shares traded notably higher after beating CY4Q2018 estimates despite the company saying that it expects negative organic growth in FY2019.  Pandora generated net income of 5.05bn Danish krone in CY4Q2018 while analysts expected 4.88bn Danish krone. Pandora said that it expects organic sales to slow by between 3% and 7% in FY2019. Pandora is rated “Neutral” in our European Large-Cap Global Top Stock Ideas. 
  • Ralph Lauren Corp. (RL) reported FY3Q2019 adjusted EPS of USD$2.32 beating analyst expectations for USD$2.14. Ralph Lauren generated USD$1.73bn of revenue in FY3Q2019 while consensus called for USD$1.66bn. Ralph Lauren’s comparable sales at constant currency grew 4% in FY3Q2019, double consensus of 2%. Ralph Lauren is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Seagate Technology (STX) reported fiscal second quarter adjusted EPS of USD$1.41 beating consensus of USD$1.28.  Seagate Technology fiscal second quarter revenue came at USD$2.71 billion matching consensus of USD$2.7 billion.  Seagate Technology is not rated in our Global Top Stock Ideas
  • TransDigm Group Inc. (TDG) reported FY1Q2019 adjusted EPS of USD$3.85 largely beating analyst expectations for USD$3.43. TransDigm Group generated USD$993.3mm of revenue in FY1Q2019 while consensus called for USD$956.2mm. TransDigm Group expects FY2019 EPS to come between USD$16.42 and USD$17.10, the midpoint of which beats consensus of USD$16.58. TransDigm Group is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.
  • Versum Materials (VSM) reported fourth quarter EPS of USD$0.55 matching consensus of USD$0.55.  Versum Materials fourth quarter revenue came at USD$339.5 million, matching consensus of USD$341.8 million.  Versum Materials is rated “Top Buy” in our US SMID-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Viacom Inc. (VIAB) announced FY1Q2019 adjusted EPS from continuing operations of USD$1.12, beating consensus of USD$1.02. Viacom reported revenue of USD$3.09bn in FY1Q2019 while analysts expected USD$3.12bn. Viacom is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.

What is Going on with European Currencies?

  • EUR€ is currently down -0.262% against the USD$ to 1.1408
  • GBP£ is currently down -0.652% against the USD$ to 1.2952
  • CHF is currently down -0.23% against the USD$ to 0.9998

Highlights from the European Bond Market

  • Generic Euro 10-Year Bonds are higher with yields down -0.7 basis points to 0.17%
  • German 10-Year Bunds are higher with yields down -0.7 basis points to 0.17%
  • French 10-Year Government Bonds are higher with yields down -0.3 basis points to 0.581%
  • UK 10-Year GILTs are higher with yields down -4.5 basis points to 1.232%
  • Italian 10-Year Government Bonds are lower with yields up 6 basis points to 2.794%
  • Spanish 10-Year Government Bonds are lower with yields up 1.2 basis points to 1.2

 

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Euro Stoxx 50 Movers

In local currency.
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Outperformers Sector Price 1D % Chg Volume
L'Oreal SA Health Care 220 3.82%                  851,196
adidas AG Financials 203 3.07%                  975,943
LVMH Moet Hennessy Louis Vuitton SE Consumer Discretionary 291 3.03%                  936,779
Industria de Diseno Textil SA Materials 25 3.00%               3,412,713
Fresenius SE & Co KGaA Telecommunication Services 47.1 2.71%               2,688,492
 
Underperformers Sector Price 1D % Chg Volume
Unibail-Rodamco-Westfield Telecommunication Services 154 -1.07%                  686,358
Enel SpA Industrials 5.17 -0.19%            30,007,197
Munich Re Financials 198 0.41%                  562,294
Bayerische Motoren Werke AG Utilities 73.6 0.51%               1,579,217
Koninklijke Philips NV Financials 33.9 0.56%               3,264,529
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