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European stocks post gains while Asian markets close lower overnight

Mar 13, 2019

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scroll down for the Asian markets recap

International Stock Markets Indexes

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

European Markets Recap

  • European stocks rose with US markets in the wake of positive US economic data
  • China is leading the global push to ground the Boeing’s (BA) 737 Max in the wake of the most recent crash while the FAA has refused to order its grounding lacking proof of a problem 
  • The UK Parliament will vote today on whether or not to leave the EU without a deal after PM Theresa May’s most recent Brexit proposal was rejected by Parliament last night.  If the vote to leave without a deal fails, as expected, there will be another vote on Thursday to ask the EU for more time to come to an acceptable Brexit deal 
  • OPEC members are telling Wall Street players this week that if the US passes the law allowing it to sue OPEC-the so-called NOPEC law-them the first casualty will be shale producers because every member will maximize productionsending the price of oil lower 
  • The Euro Stoxx 600 is currently up +0.58%, the FTSE 100 is higher by 0%, the DAX has risen +0.42%, and the CAC 40 is up +0.68%
  • Banks (+1%), Basic Resources (+0.99%), and Chemicals (+0.95%) stocks are the top performers in the Euro Stoxx 600 today
  • Personal & Household Goods (-0.04%), Food & Beverage (+0.28%), and Utilities (-0.55%) stocks are the worst performers in the Euro Stoxx 600 today
  • Investor sentiment for European stocks is positive with the advance/decline ratio for the Euro Stoxx 600 currently at 1.96x
  • 63 stocks in the Euro Stoxx 600 are at 4-week highs while 24 stocks are at 4-week lows
  • 38 stocks in the Euro Stoxx 600 are overbought while 12 stocks are oversold according to the 16-day RSI Measure

Asian Stock Markets Indexes

Asian Markets Recap

  • The Nikkei 225 finished down -0.99%, the Hang Seng ended down -0.39%, the Hang Seng China Enterprise declined -0.53%, and the CSI 300 was -0.83%
  • Investor sentiment for Japanese stocks finished negative with the advance/decline ratio for the Nikkei 225 closing at 0.17x
  • 16 stocks in the Nikkei 225 hit 4-week highs while 25 stocks reached 4-week lows
  • 3 stocks in the Nikkei 225 closed overbought while 4 stocks closed oversold according to the 16-day RSI Measure
  • Investor sentiment for Hong Kong stocks finished negative with the advance/decline ratio for the Hang Seng closing at 0.25x
  • 4 stocks in the Hang Seng hit 4-week highs while 1 stock reached 4-week lows
  • 2 stocks in the Hang Seng closed overbought while 0 stocks closed oversold according to the 16-day RSI Measure

Stocks Trending in the News

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Global Consumer Stocks Trending in the News

  • Adidas (DB:ADS) gave growth guidance for 2019 that disappointed investors.  Adidas said sales growth will be no more than 5% in the coming year, down from 8% in 2018.  Sales in Europe will be flat with the popularity of its retro styles waning in 2019.  Adidas will have trouble supplying North America and expects sales growth of 1-2% in the region.  Adidas is rated “Attractive” in our European Large-Cap Global Top Stock Ideas.
  • Carnival Corp. (CCL) was upgraded to buy from hold at Goldman Sachs.   Goldman cited an attractive valuation as compared to the S&P 500 as it raised the price target to USD$65 from USD$63.  Goldman said it sees accelerating net unit growth” that should “propel fundamentals.”  Carnival is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Inditex (BME:ITX), owner of Zara, reported operating profit that rose only 1% to 4.36 billion euros for 2018, coming below the 4.41 billion consensus.  Inditex was targeting same store sales growth of 4-6%.  Inditex saw greater competition in the fourth quarter and was forced to cut prices significantly to clear inventory.  Inditex is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Juventus (BIT:JUVE) soccer team saw its shares soar after it beat Spain’s Atletico Madrid to advance to the Champion’s Cup quarter final.  Cristiano Ronaldo scored 3 goals in the team’s 3-2 aggregate win.  Juventus rose 30% on news of the win.  Juventus is rated “Unattractive” in our European SMID-Cap Global Top Stock Ideas.
  • Lumber Liquidators (LL) announced it has resolved the outstanding securities fraud investigation by the SEC and US Department of Justice.  Lumber Liquidators agreed to pay USD$33 million for filing a misleading statement to investors regarding its laminate flooring from dryer.  Lumber Liquidators is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Meituan Dianping (SEHK: 3690) and other Chinese food delivery companies shares slipped after Chinese regulators summoned executives from top food delivery companies in the country. Chinese food delivery companies will be required to improve their monitory and supervision systems of restaurants registered through their platforms. Chinese food delivery companies are also being prompted to deal with customer complaints and pay compensation in a more timely manner in the future. Meituan is rated “Top Short” in our China All-Cap Global Top Stock Ideas.  
  • Pindoudou Inc. (PDD) shares slid after the company reported an increased quarterly loss due to heavy spending on advertising and technology necessary to enter the Chinese e-commerce. Despite the bottom-line loss, Pindoudou reported sales for CY4Q2018 that increased fourfold from a year earlier. Pindoudou is rated “Top Short” in our China All-Cap Global Top Stock Ideas.
  • Rite-Aid (RAD) announced its CEO is leaving the company as are 2 other senior executives amid poor performance for the company.  Rite-Aid also announced the closure of 400 stores, over a fifth of its stores.  Rite-Aid has struggled in recent years and the changes are designed to jump-start the company’s turnaround.  Rite-Aid is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Salvatore Ferragamo SpA (BIT: SFER) shares rose after Intermonte upgraded the stock from underperform to neutral. Intermonte also increased its price target for Salvatore Ferragamo from 12 euros/share to 16 euros/share, although this target still implies a 16% downside as of Tuesday’s closing price. Salvatore Ferragamo currently maintains no buy recommendations across 25 analyst ratings. Salvatore Ferragamo is rated “Attractive” in our European SMID-Cap Global Top Stock Ideas.

Global Information Technology & Communication Services Stocks Trending in the News

  • Momo (MOMO) was upgraded to overweight from equal-weight at Morgan Stanley.  Momo also had its price target hiked to USD$44 from USD$33.  In the wake of Momo’s recent results, Morgan Stanley sees significant upside for average revenue per user in the coming year.   Average user time is at record levels in the first quarter and is expected to rise further.  Momo is rated “Top Buy” in our China All-Cap Global Top Stock Ideas.
  • Roku (ROKU) was downgraded at Loop Capital to sell from hold.  Loop writes that the run-up in Roku has given it an “excessive valuation.”  Roku’s price target was maintained at USD$45.  Loop notes that while Roku could go from expensive to more expensive, it can no longer justify its hold rating, resulting in the downgrade to sell.  Roku is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Spotify (SPOT) has filed an anti-trust complaint with the European Union against Apple (AAPL).  Spotify is alleging that Apple is constantly changing the rules for third-party apps as well as charging a 30% tax on all third-party music apps that compete with Apple’s iTunes.  Spotify calls it an “untenable” situation and cites this as its reason for the complaint.  Spotify is not rated in our Global Top Stock Ideas.  Apple is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.

Global Financials Stocks Trending in the News

  • Brookfield Asset Management Inc. (TSX: BAM.A) has agreed to purchase a majority stake in Oaktree Capital Group LLC (OAK), a combination that will rival Blackstone Group LP (OAK) as the world’s largest alternative asset manager. Brookfield will pay USD$4.7bn for a ~62% stake in Oaktree Capital Group. Combined, the firms will have roughly USD$475bn of assets under management that generates about USD$2.5bn of fee-related revenue. Brookfield Asset Management is rated “Unattractive” in our Canada All-Cap Global Top Stock Ideas. Oaktree Capital Group is rated “Attractive” in our US SMID-Cap Global Top Stock Ideas.  Blackstone Group LP is rated “Unattractive” in our US SMID-Cap Global Top Stock Ideas.
  • Wells Fargo (WFC) CEO Tim Sloan spent 4 hours in front of Congress today testifying in front of the House Financial Services Committee.   Lawmakers grilled him on the state of Wells Fargo with many expressing concern that the bank has not rectified all its problems.  Some even suggested Wells Fargo should be broken up, describing the bank as “too big to manage.”  Wells Fargo is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.

Global Industrials Stocks Trending in the News

  • Boeing’s (BA) has seen more countries ground its 737 Max in the wake of the recent crash.  The FAA reiterated that the jet is airworthy, and no US airlines have stopped flying the planes.  The head of the FA in the US said, “Thus far, our reviews show no systematic performance issues and no basis to order the grounding of the aircraft.”  Boeing’s CEO spoke to President Trump yesterday, assuring him the 737 Max is safe.  Boeing is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.

Global Health Care Stocks Trending in the News

  • Akorn (AKRX) rose sharply on speculation Baxter (BAX) would make a bid for the company amid the M&A activity in the sector recently.  Baxter, however, put out a statement saying it is not in talks with Akorn.  It added that it has no plans to make an offer for Akorn as had been reported.  Akorn is rated “Top Short” in our US SMID-Cap Global Top Stock Ideas.  Baxter is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Aurora Cannabis Inc. (TSX: ACB) shares soared following reports that billionaire investor Nelson Peltz will join the company as a strategic advisor. Stock options that are part of the deal could one day make Peltz the second-largest Aurora Cannabis shareholder. Nelson’s role with Aurora Cannabis will mainly focus on advising the company in potential partnerships. Aurora Cannabis is rated “Unattractive” in our Canada All-Cap Global Top Stock Ideas.  
  • Natera (NTRA) shares spiked as much as 20% after Canaccord reiterated its buy recommendation for the company and increased its price target from USD$25/share to USD$26/share. Natera delivered FY2019 guidance that topped Canaccord’s forecasts and the company, “appears poised for another break out to the upside,” according to analyst Mark Massaro. Natera is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas.

 

 

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