blog

Latest from the Quantamize Blog

European stocks close mixed with little follow-through from Asian strength overnight

Mar 18, 2019

Get Unbiased Quantitative Investment Research from Advanced AI Machine Learning Technology and Maximize your ReturnsGet Unbiased Quantitative Investment Research from Advanced AI Machine Learning Technology and Maximize your Returns
Get Unbiased Quantitative Investment Research from Advanced AI Machine Learning Technology and Maximize your ReturnsGet Unbiased Quantitative Investment Research from Advanced AI Machine Learning Technology and Maximize your Returns

 

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 were mixed, mostly flat with mixed news to start the week; strength in Asia overnight did not follow through to Europe today
  • The head of the House of Commons put in a place a rule stipulating the UK PM Theresa May can only bring another Brexit proposal for a vote there if it is substantially different than the last 2 proposals; if it is the same or similar, a vote will not be allowed to proceed
  • The German government has given its approval to a merger of Deutsche Bank and Commerzbank following news that German Finance Minister Olaf Scholz will not oppose the jobs cuts at both banks.  The reduction in jobs is required to support the merger of the two German banks. 
  • Emerging Markets ETFs saw the first outflows in 21 weeks; USD$18.3 billion has made its way into EM ETFs since the start of 2019
  • Oil is trading near a 4-month high after OPEC said it will defer until June a decision on whether or not to extend production cuts; saying an April meeting, as originally planned, would be too soon
  • The Euro Stoxx 600 is currently up +0.09%, the FTSE 100 is higher by +0.88%, the DAX is down -0.38%, and the CAC 40 is down -0.02%
  • Basic Resources (+1.67%), Banks (+0.94%), and Oil & Gas (+0.94%) stocks are the top performers in the Euro Stoxx 600 today
  • Technology (-1.09%), Travel & Leisure (-0.59%), and Chemicals (-0.55%) stocks are the worst performers in the Euro Stoxx 600 today
  • Investor sentiment for European stocks is neutral with the advance/decline ratio for the Euro Stoxx 600 currently at 1.18x
  • 194 stocks in the Euro Stoxx 600 are at 4-week highs while 15 stocks are at 4-week lows
  • 90 stocks in the Euro Stoxx 600 are overbought while 3 stocks are oversold according to the 16-day RSI Measure

Asian Stock Markets Indexes

Asian Markets Recap

  • Japan industrial production m/m growth for came in at –3.4%, surpassing market consensus forecasts of –3.7%
  • The Nikkei 225 finished up +0.62%, the Hang Seng ended up +1.37%, the Hang Seng China Enterprise up +1.45%, and the CSI 300 was +2.85%
  • Investor sentiment for Japanese stocks finished positive with the advance/decline ratio for the Nikkei 225 closing at 3.09x
  • 33 stocks in the Nikkei 225 hit 4-week highs while 5 stocks reached 4-week lows
  • 13 stocks in the Nikkei 225 closed overbought while 2 stocks closed oversold according to the 16-day RSI Measure
  • Investor sentiment for Hong Kong stocks finished positive with the advance/decline ratio for the Hang Seng closing at 15.67x
  • 14 stocks in the Hang Seng hit 4-week highs while 1 stocks reached 4-week lows
  • 4 stocks in the Hang Seng closed overbought while 0 stocks closed oversold according to the 16-day RSI Measure

Stocks Trending in the News

Click name for Q-Factor score and financial data

Global Consumer Stocks Trending in the News

  • Leoni AG (DB: LEO) shares fell to their lowest in eight years after the German automotive company walked-back its prior forecast, replaced its CFO, and announced plans for 2,000 job cuts. Leoni, citing a slowdown in China, also issued its third profit warning in just 6 months. Leoni also explained that it will face, “significantly greater costs,” as it struggles to ramp up production at its plant in Merida, Mexico. Leoni AG is rated “Top Short” in our European SMID-Cap Global Top Stock Ideas.
  • Lumber Liquidators (LL) reported fourth quarter adjusted EPS of USD$0.17 beating consensus of USD$0.14.  Lumber Liquidators reported fourth quarter revenue of USD$268.9 million a touch below consensus of USD$272.3 million.  Lumber Liquidators saw same store sales growth of +9.4%, well above 7.9% consensus.  Lumber Liquidators gave same store growth guidance of negative low single digits.  Lumber Liquidators is rated “Attractive” in our US SMID-Cap Global Top Stock Ideas and “Top Short” in our US Consumer Discretionary Global Top Stock Ideas.
  • Marriott International (MAR) outlined its 3-year guidance which includes the return of up to USD$11 billion to shareholders.  Marriott intends to add between 275k and 295k rooms by 2021.  Marriott sees EPS of USD$7.65-8.50 by 2021 with a compound growth rate of 11-15% over 2018 adjusted results.  Marriott sees dividends payouts of ISD$1.9-2 billion with share repurchases of USD$7.6-9 billion.  Marriott International is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Prada SpA (SEHK: 1913) shares fell to their lowest in over 2 years after a slump in China dragged down the Italian fashion designer’s profits. Prada explained further that Chinese tourists are slowing spending due to weakness in the yuan. Prada is rated “Unattractive” in our China All-Cap Global Top Stock Ideas.

Global Information Technology & Communication Services Stocks Trending in the News

  • America Movil SAB (BMV: AMX L), the telecommunications company owned by billionaire mogul Carlos Slim, has agreed to buy Nextel Telecomunicacoes in a deal that values the latter at USD$905mm less net debt. The acquisition by America Movil SAB is the second acquisition for the company this year following its USD$648mm purchase of Telefonica SA’s (BME: TEF) businesses in Guatemala and El Salvador. America Movil is rated “Attractive” in our Mexico All-Cap Global Top Stock Ideas. Telefonica is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Disney (DIS) has rehired director James Gunn to direct the third “Guardians of the Galaxy” film after firing him eight months ago.  He was fired then after offensive tweets of his from years ago were published.  In a surprise move, Disney announced he is set to return after a backlash from fans demanding his return.  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.
  • Facebook (FB) was downgraded to hold from buy at Needham in a note highlighting concern over its recent pivot toward privacy and encrypted messages.  Facebook saw its price target cut to USD$187 from USD$205.  Needham also noted the growing risk of government regulations and its likely negative effects on Facebook.  Facebook has seen some key executives depart recently, further adding to the concerns for Needham.  Facebook is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Fidelity National Information Services (FIS) agreed to acquire Worldpay Inc (WP) for close to USD$34 billion in cash and stock.  FIS will also assume Worldpay’s debt load, which brings the enterprise value of the deal to about USD$43 billion.  Upon closure of the deal, FIS shareholders will hold 53% of the new company with Worldpay holders owning 47%.  Worldpay shareholders will receive USD$11 per share cash and 0.93 shares of FIS.  Fidelity National Information Services is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.  Worldpay is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Infineon Technologies (XTRA: IFX) shares moved higher after Commerzbank announced a new buy recommendation for the stock. Commerzbank also announced a price target of 25 euros/share for Infineon Technologies, implying a 29% upside from Friday’s closing price. Infineon currently maintains an average price target of 23.33 euros/share across 29 analyst recommendation, 20 of which are buys, 7 of which are holds, and 2 of which are sells. Infineon is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Qualcomm (QCOM) won its first patent infringement case against Apple (AAPL) in the United States.  Qualcomm was awarded USD$31.6 million in damages in a San Diego court, giving the company the full amount it asked for.   Qualcomm contends its portfolio of technology patents provides significant value to smartphones.  Qualcomm is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology 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.
  • Synaptics (SYNA) was downgraded to neutral from buy at Mizunho Securities.  Synaptics saw its price target cut to USD$39 from USD$48 as well.  Mizunho highlights Synaptics’ loss of market share in multiple product lines as well as the recent announcement that its CEO is leaving.  Synaptics is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.

Global Financials Stocks Trending in the News

  • Allianz (DB:ALV) shares are rising on speculation it could combine its assets with DWS (DB:DWS), the asset management arm of Deutsche Bank.  With news of Deutsche Bank (DB:DBK) discussing a possible merger many are speculating it may shed assets with DWS being described as a prime target.  DWS has one of the largest offerings of ETFs and real estate business among European asset managers.  Deutsche Bank is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.  DWS is rated “Unattractive” in our European SMID-Cap Global Top Stock Ideas.  Allianz is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Commerzbank’s (DB:CBK) potential merger with Deutsche Bank (DB:DBK) finally got the green light to start formal merger talks.  Germany’s Finance Minister has said he will not oppose the massive jobs cuts that will be needed to make a merger of the two banks work.  Last week labor leaders at Deutsche Bank expressed the same opposition to any merger with Commerzbank.   Commerzbank is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.  Deutsche Bank is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • Manulife Financial Corp. (TSX: MFC) shares edged higher alongside other Canadian life insurers after a judge dismissed a legal case involving hedge funds, who sought that insurers should be compelled to accept unlimited deposits into high-yielding investment policies. Prominent short seller Carson Block had said in October that he was shorting Manulife over the lawsuit, as it could have driven billions in losses for the company. Manulife Financial Corp. is rated “Neutral” in our Canada All-Cap Global Top Stock Ideas.

Global Industrials Stocks Trending in the News

  • Alstom (ENXTPA:ALO) was upgraded to buy from hold at Kepler Cheuvreux.  Alstom’s price target was raised to 43.50 euros from 38.50 euros.   Alstom has a healthy backlog with potential for winning further business in 2019.  Alstom is rated “Attractive” in our European Large-Cap Global Top Stock Ideas.
  • Boeing’s (BA) crisis deepens as preliminary evidence from the 737 Max crash indicates the plane was set to dive, similar to the situation found in the first crash, according to a report in Bloomberg.  Investigators have downloaded all the information from both the flight-data recorder and cockpit voice recorder.  Press reports indicate very similar circumstances preceding this crash as the first crash.  Boeing is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.

Global Commodities & Power Stocks Trending in the News

  • ArcLight Capital Partners has agreed to acquire the rest of American Midstream Partners (AMID) that it does not already own.   A price of USD$5.25 was agreed upon and the deal is expected to close by the end of the second quarter.  ArcLight cut its bid price to USD$4.50 from USD$6.10 in January after American Midstream said it would not pay its first quarter dividend.  A revised price was agreed up since then.  American Midstream Partners is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas.
  • Carrizo Oil & Gas Inc. (CRZO) shares moved higher following reports that the company is considering a merger with US energy explorer SM Energy Co. (SM). The two companies have reportedly held early-stage discussions regarding a merger, according to people familiar with the matter. Carrizo Oil & Gas is rated “Top Short” in our US Large-Cap Global Top Stock Ideas. SM Energy Co. is rated “Top Short” in our US Large-Cap Global Top Stock Ideas.
  • Cloud Peak Energy Inc. (CLD) shares tanked the most in its history after the US coal miner issued a warning that it could file bankruptcy within weeks. In its announcement, Cloud Peak Energy cited long-term debt, limited access to capital markets, illiquidity, and production problems as reasoning for the potential bankruptcy. Cloud Peak Energy is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas.
  • Steel Dynamics (STLD) shares slipped after reporting CY1Q2019 guidance that missed the average analyst estimate. Steel Dynamics told analysts that it expects CY1Q2019 EPS between USD$0.88 and USD$0.92, the midpoint of which notably misses consensus of USD$1.08. Steel Dynamics’ guidance was brought down on lower product pricing for its steel products, which is expected to decrease more than the cost of average scrap consumed. Steel Dynamics is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.

Global Real Estate Stocks Trending in the News

  • China Resources Land Limited (SEHK: 1109) shares spiked alongside other Chinese developers as investors are cheering the prospect of lower policy risk and a strong earnings outlook, according to Rhb Osk Securities. In the near term, the sector faces little policy risk because there was no mention of real estate-related policy changes in the country’s latest legislative meeting. China Resources is rated “Neutral” in our China All-Cap Global Top Stock Ideas.

 

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