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European stocks close slightly higher, buoyed by positive trade sentiment that overshadowed weak economic data

Feb 22, 2019

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

European Markets

  • European stocks closed slightly higher as upbeat sentiment towards a trade meeting between US President Donald Trump and China's top negotiator Liu He caused investors to shurg off weaker than expected German economic data
  • The Euro Stoxx 600 closed up +0.22%, the FTSE 100 advanced +0.16%, the DAX rose +0.3%, and the CAC 40 finished up +0.38%
  • Germany reported zero GDP growth in the fourth quarter while readings on business climate came below expectations, further evidence of the challenge Germany faces
  • British negotiators have made little progress on Brexit and PM Theresa May is expected to request a 3-month extension to talks with the EU 
  • Investor sentiment for European stocks finished trading positive with the advance/decline ratio for the Euro Stoxx 600 currently at 1.6x
  • Basic Resources (+1.93%), Technology (+1.16%), and Industrial Goods & Services (+0.74%) stocks were the top performers in the Euro Stoxx 600 today
  • Food & Beverage (-0.82%), Real Estate (-0.23%), and Utilities (+0.18%) stocks were the worst performers in the Euro Stoxx 600 today
  • 181 stocks in the Euro Stoxx 600 hit 4-week highs while 24 stocks closed at 4-week lows
  • 64 stocks in the Euro Stoxx 600 finished the trading session overbought while 6 stocks closed oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, closed little changed -0.34 points today to 14.00 after closing at 14.34 yesterday

Stocks Trending in the News

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  • Alibaba (BABA) CEO Daniel Zhang said the company has no plans for any layoffs.  Alibaba intends to keep up its recruitment efforts.  There has been a wave of layoffs at Chinese fintech companies and Alibaba, with over 100,000 employees, wants to keep growing.  Alibaba is rated “Top Buy” in our China All-Cap Global Top Stock Ideas.
  • Altice USA (ATUS) reported fourth quarter EPS of USD$0.30.  Altice USA reported fourth quarter adjusted revenue of USD$2.45 billion in line with consensus of USD$2.46 billion.  Altice USA gave 2019 revenue growth guidance of 2.5-3%.  Altice USA is rated “Top Short” in our Large-Cap Global Top Stock Ideas.
  • Anheuser Busch (ENXTBR: ABI) and other European food & beverage companies shares slid in sympathy with Kraft Heinz (KHC) today. Kraft Heinz shares are tanking after it wrote down the value of some of its largest brands by USD$15.4bn in its most recent quarter. Anheuser Busch is rated “Top Short” in our European Large-Cap Global Top Stock Ideas. Kraft Heinz is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Staples Global Top Stock Ideas.
  • ASM International NV (ENXTAM: ASM) shares traded higher by double digits after the company announced stronger than expected CY4Q2018 earnings and positive CY1Q2019 guidance. The guidance issued by ASM International was, “fine,” according to NIBC analyst Edwin de Jong, who also said that the guidance makes the company the, “odd one out.” ASM International is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas.
  • Baidu Inc. (BIDU) expects to report 18% y/y revenue growth for the current quarter, the company told analysts. CEO Robin Li also double downed on the company's plan to increase spending to drive new user growth and ramp up its advertising business. Baidu issued revenue guidance of 23.5bn yuan for the 3-month period ending March. Baidu is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
  • Caesars Entertainment (CZR) reported fourth quarter EPS of USD$0.25 well above consensus of 9 cents per share loss.  Caesars Entertainment reported fourth quarter adjusted revenue of USD$2.12 billion in line with consensus of USD$2.11 billion.  Caesars Entertainment is rated “Unattractive” in our Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Infrastrutture Wireless Italiane S.p.A. (BIT: INW) shares soared to record highs after Telecom Italia (BIT: TIT) and Vodafone (LSE: VOD) announced they will undertake building 5G wireless networks through a joint venture.  Morgan Stanley said that, as a result of the deal, “Inwit would become a more independent TowerCo.” Infrastrutture Wireless Italiane is rated “Top Buy” in our European SMID-Cap Global Top Stock Ideas. Telecom Italia is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas. Vodafone is rated “Unattractive” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Interserve (LSE: IRV) shares surged by more than 50% after the company agreed to, “key commercial terms,” for its deleveraging plan with lenders, pond providers, and pension trustees. Interserve also detailed that it received an outlined proposal from Coltrane Asset Management, which it is also reportedly considering. Interserve is not rated in our Global Top Stock Ideas.
  • Kraft-Heinz (KHC) wrote down the value of its existing brands by USD$15.4 billion when it reported results yesterday, leading to a quarterly loss of USD$12.6 billion or USD$10.34 per share.  Kraft-Heinz also disclosed a probe from the Securities and Exchange Commission relating to its procurement practices.  Fourth quarter earnings also came below expectations, but it is the write-down that is the focus of investors’ attention.  Kraft-Heinz is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas. 
  • Nike (NKE) has been the subject of ridicule in the social media realm after a basketball player sprained his knee when his Nike sneakers split open in the middle of a game.  The player from Duke University limped off the court and immediately Nike became the butt of endless jokes about the poor quality of its products.  Nike is rated “Unattractive” in our Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Staples Global Top Stock Ideas.
  • Nintendo Co. (TSE: 7974) announced that it will buyback 33bn yen (USD$298mm) worth of stock to offset the effect of 84bn yen worth of stock sales by shareholders, most of which are financial institutions. The Bank of Yuoto Ltd., Nomura Trust & Banking Co., Mitsubishi UFJ Financial Group, and some other financial institutions will sell up to 2.79mm Nintendo shares. Nintendo is not rated in our Global Top Stock Ideas.
  • Provident Financial Plc (LSE: PFG) shares soared after Non-Standard Finance (LSE: NSF) offered to buy the company via an all-stock reverse takeover. The all-stock reverse takeover is priced at 511p/share equivalent as of Thursday’s close. Providential Financials shareholders will receive 8.88 shares of Non-Standard Finance shares for each share owned. Provident Financial is rated “Top Short” in our United Kingdom All-Cap Global Top Stock Ideas. Non-Standard Finance is not rated in our Global Top Stock Ideas.
  • Roku (ROKU) reported fourth quarter pro-forma EPS of USD$0.05 above consensus of USD$0.03.  Roku reported fourth quarter adjusted revenue of USD$275.7 million beating consensus of USD$262.4 million.  Roku gave first quarter 2019 revenue guidance of USD$185-190 million.  Roku is rated “Top Short” in our Large-Cap Global Top Stock Ideas.
  • Societe Generale SA (ENXTPA: GLE) is planning to cut thousands of jobs at its investment bank, according to a Bloomberg report citing people familiar with the matter. Societe Generale is seeking to cut 500mm euros (USD$567mm) in costs and review its less profitable investment banking activities following its abysmal CY4Q2018. Societe Generale is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.

What is Going on with European Currencies?

  • EUR€ is currently little changed against the USD$ at 1.1345
  • GBP£ is currently up +0.184% against the USD$ to 1.3067
  • CHF is currently up +0.2% against the USD$ to 1.0008

Highlights from the European Bond Market

  • Generic Euro 10-Year Bonds are higher with yields down -3.1 basis points to 0.096%
  • German 10-Year Bunds are higher with yields down -3.1 basis points to 0.096%
  • French 10-Year Government Bonds are higher with yields down -2.6 basis points to 0.516%
  • UK 10-Year GILTs are higher with yields down -4.4 basis points to 1.158%
  • Italian 10-Year Government Bonds are lower with yields up 1.4 basis points to 2.847%
  • Spanish 10-Year Government Bonds are higher with yields down -2.8 basis points to 1.175%

 

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Euro Stoxx 50 Movers

In local currency.
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Outperformers Sector Price 1D % Chg Volume
Airbus SE Industrials 113.7 2.10% 1,662,516
ASML Holding NV Health Care 162.86 1.56% 856,132
Siemens AG Utilities 95.84 1.48% 2,479,682
Safran SA Industrials 120 1.48% 696,755
Societe Generale SA Energy 25.335 1.42% 3,942,141
 
Underperformers Sector Price 1D % Chg Volume
Anheuser-Busch InBev SA/NV Energy 66.17 -3.62% 894,899
Fresenius SE & Co KGaA Telecommunication Services 48.74 -2.75% 2,442,310
Unilever NV Information Technology 48.78 -1.42% 3,721,103
Bayer AG Information Technology 67 -1.33% 2,851,688
Unibail-Rodamco-Westfield Telecommunication Services 142.42 -0.95% 384,625

 

 

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