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European stocks rally on positive sentiment from US-China trade talks

Feb 15, 2019

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

European Markets

  • European stocks rally on positive news over trade US-China talks and strong US markets performance
  • China's state TV said China has reached consensus in principle with the US on the main topics of the trade talks just concluded 
  • The US and China have agreed to keep working towards a deal ahead of the March 1st deadline with President Trump saying today the two "are a lot closer" to a deal
  • The Euro Stoxx 600 closed up +1.41%, the FTSE 100 advanced +0.55%, the DAX rose +1.89%, and the CAC 40 finished up +1.79%
  • The bounce back in European stocks may be reaching a near-term ceiling after the regional mutual funds saw outflows of USD$5.9 billion for the week ending February 13, the second largest weekly outflow on record 
  • Investor sentiment for European stocks finished trading positive with the advance/decline ratio for the Euro Stoxx 600 currently at 3.23x
  • Banks (+2.66%), Automobiles & Parts (+2.08%), and Basic Resources (+1.94%) stocks were the top performers in the Euro Stoxx 600 today
  • Utilities (-0.06%), Real Estate (+0.42%), and Travel & Leisure (+0.69%) stocks were the worst performers in the Euro Stoxx 600 today
  • 169 stocks in the Euro Stoxx 600 hit 4-week highs while 28 stocks closed at 4-week lows
  • 44 stocks in the Euro Stoxx 600 finished the trading session overbought while 8 stocks closed oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, lower 0.78 points today to 14.98 after closing at 15.76 yesterday

Stocks Trending in the News

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  • Allianz (DB: ALV) saw significant outflows in the fourth quarter of 2018 with market volatility.  Allianz saw 31bn euros of outflows with 29bn of that exiting its Pimco unit.  For all of 2018, Allianz saw 51bn euros of outflows.  Allianz is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Applied Materials (AMAT) reported first quarter 2019 adjusted EPS of USD$0.81 beating consensus of USD$0.79. Applied Materials reported first quarter 2019 net revenue of USD$3.75bn matching consensus of USD$3.71bn.  Applied Materials gave second quarter guidance for revenue of USD$3.33-3.63bn.  Applied Materials is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Drax Group plc (LSE: DRX) shares fell after Citi said that the power plant operator’s share price does not account for capacity market risks or the possible impact of a review of the UK retail energy market. Citi slashed its recommendation for Drax from neutral to sell while also noting that shares remain elevated despite falling commodity prices. Drax is rated “Unattractive” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Deere & Co (DE) reported first quarter 2019 adjusted EPS of USD$1.54 missing consensus of USD$1.75. Applied Materials reported first quarter 2019 net revenue of USD$6.94bn matching consensus of USD$6.95bn.  Deere & Co. reaffirmed guidance for full-year net income of USD$3.6bn.  Deere & Co is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Moody's Corp (MCO) announced CY4Q2018 adjusted EPS of USD$1.63 while consensus was for USD$1.69. Moody's Corp reported net sales of USD$1.06bn in CY4Q2018 while analysts expected USD$1.13bn. Moody's Corp sees FY2019 adjusted EPS between USD$7.85 and USD$8.10, in line with consensus of USD$7.82. Moody's Corp is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas.
  • Newell Brands (NWL) reported fourth quarter normalized EPS of USD$0.70 beating consensus of USD$0.60.  Newell Brands reported fourth quarter revenue of USD$2.3bn just below consensus of USD$2.35bn.  Newell Brands is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Nvidia (NVDA) reported fourth quarter adjusted EPS of USD$0.80 beating consensus of USD$0.78.  Nvidia reported fourth quarter total sales of USD$2.21bn matching consensus of USD$2.2bn.  Nvidia gave 2019 revenue guidance growth of flat to slightly down, above consensus.  Nvidia is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Plus500 Ltd. (LSE: PLUS) shares tanked after the Times of London said a USD$103mm loss for 2017 in the company's Tuesday statement was not previously show in the firm’s annual report. Plus500 has responded, saying the error was a “typo”. Plus500 is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas and “Unattractive” in our United Kingdom All-Cap Global Top Stock Ideas.  
  • Pepsi (PEP) reported fourth quarter adjusted EPS of USD$1.49 beating consensus of USD$1.49.  Pepsi reported fourth quarter total sales of USD$19.5bn matching consensus of USD$19.5bn.  Pepsi is making a strong cost-cutting push and expects USD$2.5bn in charges until 2023 resulting from the cost initiative.  15% of that will be for plants closures and USD$800mm will be in 2019.  Pepsi is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Scout24 AG (XTRA: G24) shares popped after the company received a USD$5.5bn boost from two private equity groups to compete with Axel Springer SE (DB: SPR) and EBay Inc. (EBAY) for dominance in Europe. The USD$5.5bn increase sweetens an equity bid from private equity groups Hellman & Friedman and Blackstone Group LP to 46 euros/share, giving Scout24 an equity value of 4.9bn euros. Scout24 is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas. Axel Springer is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas. EBay is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Standard Life Aberdeen Plc (LSE: SLA) shares fell after Mitsubishi UFJ Financial Group Inc. (TCK) sold its entire stake in the company. Mitsubishi's stake was worth about 349.3mm pounds, or USD$447mm. Standard Life is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas.  
  • Telecom Italia SpA (BIT: TIT) shares rose after the Italian state lender backing Elliott Management Corp said it is considering doubling its stake in the former phone monopoly. Elliott Management, a US activist fund, and Vivendi SA (ENXTPA: VIV) in France are reportedly fighting over the future strategy of Telecom Italia. Telecom Italia is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas. Vivendi is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.  
  • Vivendi SA (ENXTPA: VIV) shares rose after the company said it will begin to select financial advisers for the partial sale of Universal Music Group. Vivendi also told investors that it will buy back as much as a quarter of its stock. Vivendi is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Wabco (WBC) reported fourth quarter adjusted EPS of USD$2.13 beating consensus of USD$1.98.  Wabco reported fourth quarter revenue of USD$911.6mm missing consensus of USD$2.35bn.  Wabco gave full-year EPS guidance of USD$7.60-8.10.  Wabco is not rated in our Global Top Stock Ideas.

What is Going on with European Currencies?

  • EUR€ is currently down -0.221% against the USD$ to 1.127
  • GBP£ is currently up +0.461% against the USD$ to 1.2862
  • CHF is currently little changed against the USD$ at 0.9936

Highlights from the European Bond Market

  • Generic Euro 10-Year Bonds are higher with yields down -0.2 basis points to 0.101%
  • German 10-Year Bunds are higher with yields down -0.2 basis points to 0.101%
  • French 10-Year Government Bonds are lower with yields up 0.7 basis points to 0.536%
  • UK 10-Year GILTs are lower with yields up 1 basis points to 1.16%
  • Italian 10-Year Government Bonds are higher with yields down -0.4 basis points to 2.799%
  • Spanish 10-Year Government Bonds are higher with yields down -0.2 basis points to 1.24%

 

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Euro Stoxx 50 Movers

In local currency.
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Outperformers Sector Price 1D % Chg Volume
Vivendi SA Consumer Discretionary 24.2 5.63%               5,294,154
BNP Paribas SA Financials 42.1 4.19%               6,601,640
Bayer AG Information Technology 68.2 4.00%               4,044,916
Airbus SE Industrials 111 3.55%               2,474,676
Banco Bilbao Vizcaya Argentaria SA Information Technology 5.19 3.30%            32,279,461
 
Underperformers Sector Price 1D % Chg Volume
EssilorLuxottica SA Consumer Staples 105 -0.28%                  303,611
Amadeus IT Group SA Materials 68.3 -0.20%               1,367,197
ASML Holding NV Health Care 163 0.34%               1,450,759
Unilever NV Information Technology 48.9 0.42%               4,950,664
Enel SpA Industrials 5.24 0.46%            36,174,822
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