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European stocks close higher, lifted late session by US markets strength from retail sales data

Mar 11, 2019

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

European Markets

  • European stocks close high, pushing higher late-session after favorable retail sales data from the US fueled risk-on
  • The Euro Stoxx 600 closed up +0.66%, the FTSE 100 advanced +0.27%, the DAX rose +0.6%, and the CAC 40 finished up +0.54%
  • As of late on Monday, UK PM Theresa May has still not decided whether to go to Strasburg to meet EU officials, a day ahead of a planned vote in Parliament on her most recent plan
  • UK's Labour Party has said it will hold a no-confidence vote if May fails to get her plan passed in Parliament
  • German Chancellor Angela Merkel said the EU made an important offer to the UK over the weekend and now it is for the UK to decide how to proceed
  • Saudi Arabia is poised to extend its deep cuts to oil production into April.  Allegedly, the “Oil Kingdom” is cutting its oil productions even more than agreed upon at the most recent OPEC meeting as The Kingdom attempts to regain control of global oil markets.  At the moment, Saudi Arabia is on a production pace below 10 million bbls/day, well below the agreed upon level of 10.31 million barrels/day.
  • Investor sentiment for European stocks finished trading positive with the advance/decline ratio for the Euro Stoxx 600 currently at 2.49x
  • Banks (+1.49%), Basic Resources (+1.36%), and Chemicals (+0.9%) stocks were the top performers in the Euro Stoxx 600 today
  • Personal & Household Goods (-0.18%), Food & Beverage (+0.18%), and Utilities (+0.21%) stocks were the worst performers in the Euro Stoxx 600 today
  • 42 stocks in the Euro Stoxx 600 hit 4-week highs while 96 stocks closed at 4-week lows
  • 26 stocks in the Euro Stoxx 600 finished the trading session overbought while 10 stocks closed oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, closed little changed -0.07 points today to 14.34 after closing at 14.41 last week

Stocks Trending in the News

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Global Consumer Stocks Trending in the News

  • Groupe Casino (ENXTPA: CO) shares edged higher after successfully completing the sale of 26 hypermarket and supermarket properties valued at 501mm euros. With the hypermarket and supermarket sales, Casino achieved its initial target of 1.5bn euros of non-strategic asset disposals by June 11th, 2019. Groupe Casino is rated “Unattractive” in our European SMID-Cap Global Top Stock Ideas.
  • Pandora (CPSE: PNDORA) was cut at Carnegie to sell from hold.  Carnegie also cuts its price target to DK325 from DK360.  Carnegie added, however, that Pandora could trade well below that price target if the coming results confirm a further slowdown in China.  Pandora is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Tesla (TSLA) is in talks about potentially ordering batteries from Contemporary Amperex Technologies (SZSE:300750) according to press reports.  Tesla reported in its last annual report that it only had one battery supplier and was looking for more.  The batteries would power the Model 3s that Tesla plans to start building at its new factory in China.  Telsa is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  Contemporary Amperex Technologies is not rated in our Global Top Stock Ideas.

Global Information Technology & Communication Services Stocks Trending in the News

  • Alibaba (BABA) continues its push into delivery and logistics.  Alibaba is acquiring a 49% stake in China’s largest delivery company STO Express.  Alibaba will not control the company but as a strategic investor will participate in decision making.  STO Express is one of the 5 largest private logistics companies in China.  Alibaba has invested in 4 of those 5, STO included.  Alibaba is rated “Top Buy” in our China All-Cap Global Top Stock Ideas.
  • Alphabet (GOOG.L)Facebook (FB). Amazon (AMZN) and other large tech companies should be broken up by the government because they have become too powerful, according to a report released by Senator Elizabeth Warren today.  She proposed designating these companies “platform utilities” and the creation of regulators to assure small business are not harmed by these companies.  Alphabet is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.  Amazon is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.  Facebook is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Apple (AAPL) was upgraded today at Bank of America to buy from neutral.  Apple also saw its price target raised to USD$210 from USD$180.  Apple’s average price target in the market today in USD$176.62.  Apple is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Disney (DIS) has the first blockbuster movie of 2019 with the release of “Captain Marvel”.  Disney saw the film earn USD$145 million in the US and USD$453 million in global ticket sales.  2019 has been weak for films so far so this is a welcome arrival for Disney.  Disney is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Nvidia (NVDA) agreed to acquire Mellanox Technologies (MLNX), in a USD$5.8 billion deal.  Mellanox is focused on the technology that speeds data throughout a data center.  Bloomberg earlier reported on the talk and the deal was cofirmed by both parties.  Mellanox is based in Israel.  Nvidia is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Information Technology Global Top Stock Ideas.  Mellanox is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Oracle (ORCL) was downgraded 2 notches as Nomura to reduce from buy.  Nomura also cut Oracle’s price target to USD$42 from USD$53.  Nomura notes that Oracle is spending on share buybacks at the expense of investing in R&D.  Nomura expects Oracle will return to its average of USD$3 billion per quarter from its present USD$10 billion per quarter, calling its present rate “unsustainable”.  Oracle is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.

Global Financials Stocks Trending in the News

  • BNB Paribas (ENXTPA: BNP) and Societe Generale (ENXTPA: GLE) shares were cut at Barclays after the financial institution’s strategic plans fell short and did not address, “the poor outlook for RoTE,”, or return on tangible equity. Price targets for both banking stocks were cut at Barclay’s as well. BNB Paribas is rated “Top Short” in our European Large-Cap Global Top Stock Ideas. Societe Generale is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • Deutsche Bank (DB:DBK)  CEO Christian Sewing is reportedly dropping his resistance to a merger with Commerzbank (DB:CBK)  this year.  Informal talks between the companies have intensified in recent days, though a formal mandate has yet to be declared.  The German Finance Ministry favors a merger between the 2 as opposed to a merger with a foreign player. Deutsche Bank is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.  Commerzbank is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.

Global Industrials Stocks Trending in the News

  • Boeing (BA) is under pressure after China grounded all 96 737-800s in the country in the wake of the Ethiopian Airlines crash of a 737-800 over the weekend.  China broke with normal protocol of the past in which the country that certified the jet-the US-is the first to make the call to ground.  A few other countries have followed China’s lead while most are not, yet.  This crash comes 5 months after the Lion Air crash of a 737-800 in which is feared to have been caused by sensors the plane pushing its nose down.  Boeing is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.
  • General Electric (GE) was in talks to offload its insurance business before the talks were derailed, according to a report by Melius Research today.  GE recently reported it needed to put USD$15 billion into loss reserves for the unit as it continues to look for a buyer for it.  General Electric is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Industrials Global Top Stock Ideas.

Global Commodities & Power Stocks Trending in the News

  • Royal Dutch Shell Plc (ENXTAM: RDSA) is reportedly on the prowl for a major shale play in an effort to bulk up its position against its Permian Basin rivals Exxon Mobil Corp. (TCK) and Chevron Corp. (TCK). “We are definitely actively looking at opportunities,” said Shell’s deep-water head, Wael Sawan, who added, “If none every come up then that’s a disappointing outcome.” Shell is rated “Top Buy” in our European Large-Cap Global Top Stock Ideas and “Top Buy” in our United Kingdom All-Cap Global Top Stock Ideas.

What is Going on with European Currencies?

  • EUR€ is currently little changed against the USD$ at 1.1227
  • GBP£ is currently up +0.63% against the USD$ to 1.3097
  • CHF is currently down -0.302% against the USD$ to 0.989

Highlights from the European Bond Market

  • Generic Euro 10-Year Bonds are higher with yields down -0.7 basis points to 0.062%
  • German 10-Year Bunds are higher with yields down -0.7 basis points to 0.062%
  • French 10-Year Government Bonds are flat with yields little changed 0 basis points to 0.407%
  • UK 10-Year GILTs are higher with yields down -2.2 basis points to 1.167%
  • Italian 10-Year Government Bonds are lower with yields up 4.6 basis points to 2.55%

 

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Euro Stoxx 50 Movers

In local currency.
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Outperformers Sector Price 1D % Chg Volume
Societe Generale SA Energy 25.9 4.21%               1,131,196
ING Groep NV Consumer Discretionary 10.6 2.85%               4,832,164
Fresenius SE & Co KGaA Telecommunication Services 48.2 1.89%                  804,242
Banco Santander SA Health Care 4.15 1.77%            19,670,535
BNP Paribas SA Financials 43.3 1.64%               2,577,459
 
Underperformers Sector Price 1D % Chg Volume
Safran SA Industrials 117 -1.71%                  339,122
Bayer AG Information Technology 68.5 -1.40%               1,791,846
Unilever NV Information Technology 48.3 -1.18%               2,598,037
L'Oreal SA Health Care 228 -0.92%                  213,317
Enel SpA Industrials 5.46 -0.51%            16,656,521
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