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European stocks rise on news a new Brexit proposal being hammered out now by EU

Feb 20, 2019

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

European Markets

  • European stocks rise on news from Spain's foreign minister that the EU is already working on a new Brexit proposal
  • EU officials want UK PM Theresa May to put any changes she secures to the Irish backstop to a vote in Parliament before the EU will consider voting on those changes 
  • The Euro Stoxx 600 closed up +0.67%, the FTSE 100 advanced +0.69%, the DAX rose +0.82%, and the CAC 40 finished up +0.69%
  • US trade officials are purportedly asking their Chinese counterparts to agree to keep the value of the Chinese Renminbi stable as part of their trade negotiations.  The goal would be to neutralize any attempt by Beijing official to devalue the Yuan to counter US tariffs, etc. 
  • Investor sentiment for European stocks finished trading positive with the advance/decline ratio for the Euro Stoxx 600 currently at 2.92x
  • Automobiles & Parts (+2.3%), Basic Resources (+1.81%), and Travel & Leisure (+1.2%) stocks were the top performers in the Euro Stoxx 600 today
  • Real Estate (-0.52%), Retail (-0.37%), and Utilities (+0.19%) stocks were the worst performers in the Euro Stoxx 600 today
  • 105 stocks in the Euro Stoxx 600 hit 4-week highs while 15 stocks closed at 4-week lows
  • 52 stocks in the Euro Stoxx 600 finished the trading session overbought while 2 stocks closed oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, closed little changed -0.09 points today to 14.52 after closing at 14.61 yesterday

Stocks Trending in the News

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  • Air France (ENXTPA: AF) shares spiked after CEO Ben Smith struck a compromised with Pieter Elbers, easing a growing rift within the airline. Smith will back Elbers to remain as head of the airline’s Dutch arm, securing Elbers with a critical seat on the division's board. Air France is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Analog Devices Inc. (ADI) announced FY1Q2019 adjusted EPS of USD$1.33 while consensus was for USD$1.28. Analog Devices Inc. reported net sales of USD$1.54bn in FY1Q2019 while analysts expected USD$1.51bn. Analog Devices Inc. sees FY2Q2019 adjusted EPS between USD$1.23 and USD$1.37. Analog Devices Inc.  is rated "Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Apple Inc. (AAPL) sales weakness in China is, “likely to continue beyond the short-term,” as they, “go beyond price points,” according to HSBC. HSBC also reaffirmed its hold rating for Apple and maintained its USD$160/share price target. HSBC cited an internal survey of Chinese customer preferences in explaining the expected weakness in China. Apple is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Bausch Health Cos Inc. (BHC) reported CY4Q2018 adjusted EPS of USD$1.04 while analysts expected USD$0.84. Bausch Health Cos Inc. generated net sales of USD$2.12bn in CY4Q2018, beating consensus of USD$2.08bn. Bausch Health Cos Inc. expects FY2019 adjusted Ebitda between USD$3.35bn and USD$3.50bn, the midpoint of which is slightly above consensus of USD$3.39bn. Bausch Health Cos Inc. is not rated in our Global Top Stock Ideas.
  • Cathay Pacific Airways Ltd. (SEHK: 293) shares jumped after the company forecasted an end to its record two-year streak of losses. Cathay Pacific Airways told investors that it expects to report a profit for FY2018, driven by a strong year for its cargo business and growth from additional routes and seats. Cathay Pacific Airways is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
  • CVS Health Corp. (CVS) shares slipped after the company announced FY2019 guidance that missed the lowest analyst estimates. CVS Health Corp. told investors that it expects adjusted EPS to come between USD$6.68 and USD$6.88 in FY2019 while analyst estimates ranged from USD$6.99 and USD$7.78. CVS Health Corp. Announced CY4Q2018 adjusted EPS of USD$2.14, beating consensus of USD$2.08. CVS Health Corp. is rated "Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Devon Energy (DVN) reported fourth quarter core EPS of USD$0.10 well below consensus of USD$0.30.  Devon Energy will be separating its Canadian and Barnett assets and expects to complete that by the end of 2019.  Devon Energy increased its quarterly dividend to 9 cents per share from 8 cents and increased its share buyback program to USD$5 billion from USD$4 billion.  Devon Energy is rated “Neutral” in our Large-Cap Global Top Stock Ideas.
  • Dialog Semiconductor Plc (XTRA: DLG) shares fell after Bankhaus Laumpe analyst Karsten Iltgen warned clients of likely, “weakish,” FY1Q2019 revenue of about USD$280mm, below consensus of roughly USD$300mm. Iltgen explained that fairly strong iPad production in the quarter will likely be offset by iPhone weakness. Dialog is not rated in our Global Top Stock Ideas.  
  • Diamondback Energy (FANG) reported fourth quarter adjusted EPS of USD$1.21 missing consensus of USD$1.58.  Diamondback Energy reported fourth quarter adjusted ebitda of USD456.5 million missing consensus of USD485.3 million.  Diamondback Energy saw production of 16,816 mboe/day in the fourth quarter.  Devon Energy is rated “Unattractive” in our Large-Cap Global Top Stock Ideas.
  • Fresenius SE (DB: FRE) shares rose after the German health conglomerate promised investors that new deals and new drugs will accelerate growth, beginning next year. Fresenius also told investors that it will target 7% per annum sales growth and 9% per annum net income growth from 2020 to 2023. Fresenius is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Gannett Co Inc. (GCI) reported CY4Q2018 adjusted EPS of USD$0.44, slightly missing expectations for USD$0.46. Gannett Co Inc. generated net sales of USD$751.4mm in CY4Q2018, missing consensus of USD$764.3mm. Gannett Co Inc. is rated "Attractive” in our US SMID-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Henry Schein Inc. (HSIC) announced CY4Q2018 adjusted EPS of USD$1.12 while consensus was for USD$1.11. Henry Schein Inc. reported net sales of USD$3.38bn in CY4Q2018 while analysts expected USD$3.46bn. Analysts expect Henry Schein Inc. to report an adjusted EPS of USD$0.96 in CY1Q2019. Henry Schein Inc. is rated "Top Buy” in our US Large-Cap Global Top Stock Ideas.
  • Herbalife Nutrition (HLF) reported fourth quarter adjusted EPS of USD$0.63 beating consensus of USD$0.60.  Herbalife Nutrition reported fourth quarter sales of USD$1.19 billion matching consensus of USD$1.19 billion.  Herbalife Nutrition is not rated in our Global Top Stock Ideas.
  • J Sainsbury PLC (LSE: SBRY) shares tanked on reports that the UK supermarket chain’s prospective merger with Walmart’s (WMT) Asda is near collapse. Reports cite that antitrust regulators are requiring harsher-than-expected conditions for the prospective merger to be approved. Sainsbury is rated “Attractive” in our United Kingdom All-Cap Global Top Stock Ideas. Walmart is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Staples Global Top Stock Ideas.
  • Lloyds Banking Group Plc (LSE: LLOY) shares jumped after the British lender announced a share buyback worth 1.75bn pounds (USD$2.3bn). The share buyback signals that Lloyds has enough capital to ride out any uncertainty relating to Brexit, to which it has high exposure through its UK consumer loan book. Lloyds Banking Group is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas.  
  • Lululemon (LULU) was downgraded to by Nomura Instinet to neutral from buy.  Nomura Instinet made the downgrade based solely on valuation after the stock ran 24%.  The price target was hiked to USD$157 from USD$140 together with the rating drop.  Lululemon is rated “Attractive” in our Large-Cap Global Top Stock Ideas.
  • Owens Corning (OC) reported CY4Q2018 adjusted EPS of USD$1.38 while analysts expected USD$1.26. Owens Corning generated net sales of USD$1.72bn in CY4Q2018, beating consensus of USD$1.68bn. Owens Corning is rated "Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.
  • Senvion SA (DB: SEN) shares plunged after the wind-turbine manufacturer revised guidance for revenue and Ebitda lower. Senvion cited project delays and cost overruns as reasons for the guidance revision. In a note to clients, Citi said the downward revision brings about feelings of déjà vu after a similar warning was issued on November 1st, 2018. Senvion is not rated in our Global Top Stock Ideas.  
  • Swedbank AB (OM: SWED A) shares tanked following reports that the bank may have handled more than USD$4.3bn in laundered money. From 2007 to 2015, some 50 customers may have transferred about 40bn kronor (USD$4.3bn) between Swedbank and Danske Bank A/S (CPSE: DANSKE). Swedbank spokesman Gabriel Francke Rodau has since responded to the reports saying that the bank, “doesn’t recognize,” those numbers. Swedbank is rated “Attractive” in our European Large-Cap Global Top Stock Ideas. Danske Bank is rated “Top Short” in our European Large-Cap Global Top Stock Ideas.  
  • Targa Resources Corp. (TRGP) announced CY4Q2018 adjusted EPS of USD$0.35 while consensus was for a loss of USD$0.02. Targa Resources Corp. reported net sales of USD$2.60bn in CY4Q2018, missing consensus of USD$2.91bn. Targa Resources Corp. is rated "Top Short” in our US Large-Cap Global Top Stock Ideas. 
  • The Southern Co. (SO) reported CY4Q2018 adjusted EPS of USD$0.25 while analysts expected USD$0.23. The Southern Co. generated net sales of USD$5.34bn in CY4Q2018, beating consensus of USD$4.96bn. The Southern Co. is rated "Neutral” in our US Large-Cap Global Top Stock Ideas.
  • UBS Group AG (SWX: UBSG) will pay a fine worth 4.5bn euros, or USD$5.1bn, mandated by a French court that found the bank guilty of helping wealthy French clients stash funds in undeclared Swiss accounts.  The court accuses UBS of illegally providing French customers with banking services to hide assets from tax authorities. UBS is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Wix.com (WIX) shares fell sharply lower after the customized web developer projected FY2019 revenue and free cash flow that missed consensus expectations. Wix.com also projects just 550k net premium additions in FY2019, down from the 760k net premium additions in FY2018. Wix.com is not rated in our Global Top Stock Ideas.

What is Going on with European Currencies?

  • EUR€ is currently up +0.22% against the USD$ to 1.1366
  • GBP£ is currently up +0.199% against the USD$ to 1.3088
  • CHF is currently up +0.26% against the USD$ to 1.0015

Highlights from the European Bond Market

  • Generic Euro 10-Year Bonds are higher with yields down -0.5 basis points to 0.1%
  • German 10-Year Bunds are higher with yields down -0.5 basis points to 0.1%
  • French 10-Year Government Bonds are higher with yields down -0.7 basis points to 0.526%
  • UK 10-Year GILTs are lower with yields up 1.2 basis points to 1.181%
  • Italian 10-Year Government Bonds are lower with yields up 7.2 basis points to 2.86%
  • Spanish 10-Year Government Bonds are higher with yields down -0.8 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
Fresenius SE & Co KGaA Telecommunication Services 48.5 4.97%               2,469,021
Daimler AG Consumer Staples 51.8 2.58%               4,393,230
Volkswagen AG Consumer Staples 147 2.44%               1,547,699
Schneider Electric SE Industrials 69.4 2.24%               1,547,438
Bayerische Motoren Werke AG Utilities 72.5 2.07%               2,063,029
 
Underperformers Sector Price 1D % Chg Volume
Industria de Diseno Textil SA Materials 25.5 -1.13%               3,248,390
Nokia OYJ Financials 5.35 -0.93%            18,377,819
Sanofi Consumer Discretionary 74.2 -0.63%               1,923,365
Koninklijke Ahold Delhaize NV Consumer Discretionary 22.9 -0.52%               2,873,570
LVMH Moet Hennessy Louis Vuitton SE Consumer Discretionary 297 -0.22%                  445,663
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