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European stocks closed lower with growth concerns in the wake of ECB comments

Feb 19, 2019

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

European Markets

  • European stocks close lower with growth concerns in the wake of comments from the ECB's chief economist
  • The European Central Bank's chief economist said the ECB could push back any rate hike if the economy weakens, spooking investors
  • The Euro Stoxx 600 closed down -0.22%, the FTSE 100 declined -0.56%, the DAX rose +0.09%, and the CAC 40 finished down -0.16%
  • European officials made clear again they will hike import tariffs on US goods if the US lets auto tariffs increase on European auto imports on March 1st 
  • The head of the Bank of Japan told Parliament he would provide more stimulus to the economy if required. 
  • US and Chinese negotiators will continue trade talks this week, looking to build on the momentum of last week 
  • The US is asking China to keep the yuan stable as part of the negotiations, Bloomberg reports
  • Investor sentiment for European stocks finished trading negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.63x
  • Retail (+0.48%), Travel & Leisure (+0.45%), and Insurance (+0.39%) stocks were the top performers in the Euro Stoxx 600 today
  • Banks (-0.91%), Chemicals (-0.77%), and Financial Services (-0.63%) stocks were the worst performers in the Euro Stoxx 600 today
  • 147 stocks in the Euro Stoxx 600 hit 4-week highs while 12 stocks closed at 4-week lows
  • 65 stocks in the Euro Stoxx 600 finished the trading session overbought while 3 stocks closed oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, closed little changed +0.08 points today to 14.61 after closing at 14.54 yesterday

Stocks Trending in the News

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  • Advanced Auto Parts (AAP) reported fourth quarter adjusted EPS of USD$1.17 beating consensus of USD$1.13.  Advanced Auto Parts reported fourth quarter sales of USD$2.11 billion matching consensus of USD$2.11 billion.  Advanced Auto Parts sales grew 3.4% in the fourth quarter.  Advanced Auto Parts is rated “Neutral” in our Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas
  • China International Capital Corp. (SEHK: 3908) shares traded higher after Alibaba Group Holding Ltd. (BABA) increased its stake in the investment bank. Alibaba increased its stake in China International Capital Corp. by 117.1mm shares, or HK$1.8bn (USD$230mm). Alibaba’s stake in China International Capital Corp. is now 11.7%, nearly matching Tencent Holdings Limited’s (SEHK: 700)12% stake in the investment bank. China International Capital Corp. is rated “Neutral” in our China All-Cap Global Top Stock Ideas. Alibaba is rated “Top Buy” in our China All-Cap Global Top Stock Ideas. Tencent is rated “Attractive” in our China All-Cap Global Top Stock Ideas.
  • Danone (ENXTPA:BN) gave 2019 guidance for 3% sales growth with sales with full year operating income of 3.56 billion euros.  Danone expects recurring operating margin above 15%.  Danone expects EPS of 3.84 euros.  Danone is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Hang Seng Bank Limited (SEHK: 11) announced FY2018 financials that broadly surpassed analyst expectations. Hang Seng Bank reported HK$24.21bn of net income in FY2018 while consensus was for HK$23.38bn. Hang Seng Bank also told investors that it expects Hong Kong GDP growth of 2.7% in 2019, down from the expected 3.3% growth in 2018. Hang Seng Bank is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
  • Honda (TSE:7267) said it will close its factory in England which is being seen as a blow to Brexit.  Honda will close a factory located in Swindon, located about 80 miles outside of London.  The factory will close in 2021 and presently employs 3,500 workers.  Honda is rated “Top Buy” in our Japanese Large-Cap Global Top Stock Ideas.
  • HSBC Holdings Plc (LSE: HSBA) shares dipped after missing CY4Q2018 consensus and warning investors that rising political tensions have made the outlook for 2019 far less predictable. HSBC Holdings chairman Mark Tucker said on a conference call, “There are more risks to global economic growth than this time last year, and we remain alive and responsive to all possibilities.” HSBC Holdings reported adjusted pretax profit of USD$3.39bn in CY4Q2018 while analysts expected USD$4.40bn. HSBC Holdings is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Kia Motors (KOSE: A000270) shares were downgraded from buy to hold by KB Securities. KB Securities maintains a price target for Kia Motors shares of 40,000 won, implying a 12% upside from the stock’s last close. Kia Motors maintains an average price target of 36,695 won across 35 analyst estimates. Kia Motors is not rated in our Global Top Stock Ideas.
  • ProSiebenSat.1 Media SE (XTRA: PSM) shares slipped following reports that key executives are clashing with CEO Max Conze over the firm’s strategy. According to the report, CFO Jan Kemper will likely depart the German broadcaster shortly. Chief Commercial Officer Sabine Eckhardt also will not renew her contract at the end of 2019, according to the report. ProSiebenSat.1 Media is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas.
  • Sage Therapeutics (SAGE) reported fourth quarter adjusted loss per share of USD$3.83 missing consensus of a loss of USD$2.97.  Sage Therapeutics reported fourth quarter total expenses of USD$164.5 million.  Sage Therapeutics sees funding in place until second half of 2020.  Sage Therapeutics is rated “Top Short” in our Large-Cap Global Top Stock Ideas.
  • SiteOne Landscaping (SITE) reported fourth quarter adjusted loss per share of USD$0.01 beating consensus of a loss of USD$0.06.  SiteOne Landscaping reported fourth quarter revenue of USD$474.6 million matching consensus of USD$473.1 million.  SiteOne Landscaping saw total sales growth 14% with organic sales growth of 4%.  SiteOne Landscaping is rated “Unattractive” in our Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas. 
  • Straumann Holding AG (SWX: STMN) announced CY4Q2018 financials containing its strongest earnings growth since 2005. Straumann reported organic y/y earnings growth of 21.6% while consensus was for 16.8%. Daniel Buchta, an analyst with Vontobel, wrote in a note to clients that Straumann could produce double-digit organic growth for at least the next 5 years. Straumann is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Walmart (WMT) reported fourth quarter adjusted EPS of USD$1.41 beating consensus of USD$1.34.  Walmart reported fourth quarter sales of USD$138.8 billion matching consensus of USD$138.6 billion.  Walmart sales grew 4.2% in the fourth quarter, well above 3.4% expected, with online sales up 43% with Walmart's redesigned website.  Walmart provided 2019 same store sales guidance of 2.5-3%.  Walmart is rated “Attractive” in our Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Staples Global Top Stock Ideas
  • Welbuilt (WBT) reported fourth quarter adjusted EPS of USD$0.18 beating consensus of USD$0.17.  Welbuilt reported fourth quarter revenue of USD$406.1 million missing consensus of USD$393.6 million.  Welbuilt gave 2019 EPS guidance of USD$0.71-0.81.  Welbuilt is rated “Attractive” in our SMID-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.

What is Going on with European Currencies?

  • EUR€ is currently up +0.195% against the USD$ to 1.1333
  • GBP£ is currently up +0.905% against the USD$ to 1.3041
  • CHF is currently up +0.281% against the USD$ to 0.9984

Highlights from the European Bond Market

  • Generic Euro 10-Year Bonds are higher with yields down -0.5 basis points to 0.105%
  • German 10-Year Bunds are higher with yields down -0.5 basis points to 0.105%
  • French 10-Year Government Bonds are higher with yields down -1.2 basis points to 0.533%
  • UK 10-Year GILTs are lower with yields up 0.3 basis points to 1.169%
  • Italian 10-Year Government Bonds are lower with yields up 2.2 basis points to 2.788%
  • Spanish 10-Year Government Bonds are higher with yields down -1.9 basis points to 1.208%

 

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Euro Stoxx 50 Movers

In local currency.
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Outperformers Sector Price 1D % Chg Volume
adidas AG Financials 202 1.64%                  526,417
Deutsche Post AG Health Care 26.4 1.07%               2,693,699
Allianz SE Financials 191 0.80%                  869,275
LVMH Moet Hennessy Louis Vuitton SE Consumer Discretionary 297 0.73%                  549,831
Danone SA Financials 66.4 0.73%               2,372,280
 
Underperformers Sector Price 1D % Chg Volume
Nokia OYJ Financials 5.4 -2.60%            17,750,459
Anheuser-Busch InBev SA/NV Energy 67.8 -1.28%               1,448,494
Linde PLC Real Estate 149 -1.10%                  612,363
Unibail-Rodamco-Westfield Telecommunication Services 144 -1.09%                  589,671
Fresenius SE & Co KGaA Telecommunication Services 46.7 -1.04%               1,643,129
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