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European stocks close higher with better-than-expected Chinese data driving positive sentiment

Mar 01, 2019

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

European Markets

  • European stocks traded in positive territory all session, with sentiment supported by better-than-expected data overnight from China
  • The China Caixin China Manufacturing PMI came in at 49.9, ahead of market forecasts of 48.5 and January’s reading of 48.3.  Greater-than-expected domestic demand was boosted by an increase in infrastructure spending. 
  • The Euro Stoxx 600 closed up +0.39%, the FTSE 100 advanced +0.45%, the DAX rose +0.75%, and the CAC 40 finished up +0.47%
  • US officials are preparing a final trade agreement to present to China in the coming weeks with the potential for another summit in March, according to a report in Bloomberg today 
  • MSCI has confirmed it will increase the weight on Chinese stocks in its indexes, with China rising in the MSCI Emerging Markets index to 3.3% from today’s 0.72% 
  • Investor sentiment for European stocks finished trading positive with the advance/decline ratio for the Euro Stoxx 600 currently at 2.47x
  • Food & Beverage (+1.36%), Automobiles & Parts (+1.32%), and Retail (+1.11%) stocks were the top performers in the Euro Stoxx 600 today
  • Media (-1.23%), Banks (-0.4%), and Real Estate (-0.33%) stocks were the worst performers in the Euro Stoxx 600 today
  • 108 stocks in the Euro Stoxx 600 hit 4-week highs while 53 stocks closed at 4-week lows
  • 66 stocks in the Euro Stoxx 600 finished the trading session overbought while 9 stocks closed oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, closed lower 0.29 points today to 13.3 after closing at 13.59 yesterday

Stocks Trending in the News

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Global Consumer Stocks Trending in the News

  • Amazon (AMZN) has launched Project Zero, its effort to limit counterfeit sellers on its platform.  Project Zero lets brand owner delete product it deems are fakes.  This marks a shift in the way Amazon functioned in the past and it cedes responsibility for fighting counterfeiters to a third party, the brand owners.  Amazon is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Foot Locker (FL) shares surged after the company delivered CY4Q2018 earnings that beat the highest analyst estimate. Foot Locker reported CY4Q2018 adjusted EPS of USD$1.56, beating the highest analyst estimates that ranged between USD$1.32 and USD$1.49. Foot Locker also reported robust comparable sales growth of 9.7% in CY4Q2018, more than double consensus of 4.6% Foot Locker is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Gap (GPS) announced it will split into 2 companies, with Old Navy being spun off as a standalone company.  Gap reported fourth quarter 2019 adjusted EPS of USD$0.72 matching consensus of USD$0.72.  Gap reported fourth quarter 2019 adjusted revenue of USD$4.62 billion missing consensus of USD$4.7 billion.  Gap gave fiscal 2019 EPS guidance of USD$2.11-2.26 with flat to slightly up sales.  Gap is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • shares moved higher after AlphaValue upgraded shares from add to buy. Kering currently maintains 21 buy recommendations, 4 hold recommendations, a 1 sell recommendation across analyst ratings. On average, analysts have increased their price target for Kering shares by 1.9% over the last 3 months. Kering is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.  
  • Nordstrom (JWN) reported fourth quarter EPS of USD$1.48 beating consensus of USD$1.42.  Nordstrom reported fourth quarter revenue of USD$4.48 billion trailing consensus of USD$4.6 billion.  Nordstrom saw 0.1% same store sales growth, well below the 1.2% consensus.  Nordstrom gave 2019 sales growth guidance of 1-2%, with EPS guidance of USD$3.65-3.90, above consensus of USD$3.67.  Nordstrom is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Moncler (BIT: MONC) shares jumped by double-digits after the Italian jacket maker reported FY2018 that broadly beat analyst expectations. Jefferies analyst Flavio Cereda wrote in a note to clients that Moncler is establishing itself as a, “go-to brand,” for the millennial demographic. Jefferies raised its price target for Moncler from 37 euros/share to 39 euros/share while maintaining its buy recommendation for the stock. Moncler is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • Tesla (TSLA) CEO Elon Musk said the company probably won’t post a profit in the first quarter.  Musk said Tesla will have a number of one-time charges that will see it not post a profit.  He said Tesla is cutting costs by closing some stores and cutting its workforce, and it will focus on selling cars online going forward.  Tesla is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • William Hill (LSE: WMH) shares slid after the company reported in-line FY2018 results that contained no new information about the company’s future. Peel Hunt analyst Ivor Jones wrote in a note to clients William Hill earnings are set to fall, “sharply,” in 219 due to partly the firm's investment in expansion to the US. Jones wrote in his note that payoff for the US investment, “remains some way in the future and we are skeptical about whether any analysis of the potential upside is investable.” William Hill is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas.  

Global Information Technology & Communication Services Stocks Trending in the News

  • Autodesk (ADSK) reported fourth quarter adjusted EPS of USD$0.46 beating consensus of USD$0.42.  Autodesk reported fourth quarter adjusted revenue of USD$737.3 million beating consensus of USD$706.5 million.  Autodesk gave first quarter EPS guidance of 44-48 cents per share.  Autodesk is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Dell (DELL) reported fourth quarter 2019 adjusted EPS of USD$0.52 matching consensus of USD$0.52.  Dell reported fourth quarter 2019 adjusted revenue of USD$14.7 billion missing consensus of USD$14.9 billion.  Dell gave second quarter EPS guidance of 50-53 cents per share.  Dell is rated “Top Short” in our US Large-Cap Global Top Stock Ideas
  • WPP Plc (LSE: WPP) shares soared after the company dodged another results shock and reported stronger than expected earnings following a year plagued by client losses. Low expectations for WPP Plc were driven by weak results at rival Publicis Groupe SA (ENXTPA: PUB), who blamed ad spending cuts by consumer goods manufacturers in North America for its downturn. WPP Plc is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas. Publicis Groupe SA is rated “Neutral” in our European Large-Cap Global Top Stock Ideas. 

Global Industrials Stocks Trending in the News

  • Rheinmetall (DB: RHM) shares popped after the company delivered better than expected CY4Q2018 financial results for both its defensive and automotive division. Bankhaus Lampe analyst Gordon Schoenell wrote in a note to clients that Rheinmetall’s CY4Q2018 financial indicate, “surprisingly strong margins,”. Rheinmetall’s adjusted Ebit in CY4Q2018 blew past consensus by ~20%. Rheinmetall is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas.
  • Rolls-Royce (LSE: RR.) shares continued to slip following Thursday’s FY2018 financial report that contained weaker than expected financial results. Investors are debating whether or not the quality of Rolls-Royce's cash flow generation and its profitability are sufficient to justify the stock’s valuation. Rolls-Royce is rated “Unattractive” in our United Kingdom All-Cap Global Top Stock Ideas.  

Global Financials Stocks Trending in the News

  • Jupiter Fund Management Plc (LSE: JUP) shares surged the most intraday in more than 5 years after it announced a higher than expected dividend following a, “tough year,” for asset managers. Jupiter Fund Management trimmed its FY2018 dividend to 28.5 pence/share, a 13% cut from the prior year. Jupiter Fund Management is rated “Unattractive” in our United Kingdom All-Cap Global Top Stock Ideas.
  • London Stock Exchange Group Plc (LSE: LSE) CEO David Schwimmer announced plans to cut roughly 5% of its workforce to spur growth. London Stock Exchange Group Plc also told investors that it is well positioned to weather any fallout from the potential UK exit from the European Union. London Stock Exchange Group Plc is rated “Attractive” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Mitsubishi UFJ Financial Group Inc. (TSE: 8306) announced that it’s agreed to acquire DZ Bank’s (UNQ: 834310) aviation finance division, one of the largest acquisitions in the company's history. As part of the acquisition, Mitsubishi UFJ Financial Group will receive a loan portfolio worth 5.6bn euros (USD$6.4bn) and the unit’s employees. Mitsubishi UFJ Financial Group is rated “Attractive” in our Japan Large-Cap Global Top Stock Ideas. DZ Bank is not rated in our Global Top Stock Ideas. 

Global Commodities & Power Stocks Trending in the News

  • Linde (XTRA:LIN) unit Praxair will build a hydrogen plant in Louisiana.  Praxair will supply a major refinery will hydrogen under a long-term contract.  Praxair will build, own and operate the steam methane reformer, which will supply 170 million standard cubic feet of high-purity hydrogen each day.  Linde is not rated in our Global Top Stock Ideas.

What is Going on with European Currencies?

  • EUR€ is currently little changed against the USD$ at 1.1376
  • GBP£ is currently down -0.302% against the USD$ to 1.3223
  • CHF is currently little changed against the USD$ at 1.0013

Highlights from the European Bond Market

  • Generic Euro 10-Year Bonds are flat with yields little changed 0 basis points to 0.183%
  • German 10-Year Bunds are flat with yields little changed 0 basis points to 0.183%
  • French 10-Year Government Bonds are lower with yields up 0.9 basis points to 0.578%
  • UK 10-Year GILTs are higher with yields down -0.6 basis points to 1.296%
  • Italian 10-Year Government Bonds are higher with yields down -1.9 basis points to 2.733%
  • Spanish 10-Year Government Bonds are lower with yields up 2.4 basis points to 1.197%

 

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Euro Stoxx 50 Movers

In local currency.
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Outperformers Sector Price 1D % Chg Volume
Anheuser-Busch InBev SA/NV Energy 71.7 6.20%               2,241,386
Kering SA Consumer Staples 498 3.21%                  126,147
Volkswagen AG Consumer Staples 154 2.17%               1,438,320
Bayer AG Information Technology 71.4 1.64%               3,306,575
BASF SE Utilities 68.1 1.60%               3,259,009
 
Underperformers Sector Price 1D % Chg Volume
Banco Bilbao Vizcaya Argentaria SA Information Technology 5.38 -1.74%            23,937,193
Telefonica SA Financials 7.48 -1.45%            16,390,702
Linde PLC Real Estate 151 -1.34%               1,192,691
Fresenius SE & Co KGaA Telecommunication Services 48.8 -1.21%               1,633,327
Unilever NV Information Technology 47 -1.09%               5,385,973
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