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European markets sell off today on profit warnings and Brexit, Asia mixed overnight

Mar 20, 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 markets close lower on profit warnings and Brexit uncertainty, with both weighing on sentiment today
  • UK Prime Minister Theresa May is seeking an extension of the Brexit deadline while the opposition is calling for the population to have their say on the final exit from the EU
  • President Trump said tariffs will stay on Chinese goods until the two come to a trade agreement
  • WTI crude trades over $60 today after US stockpiles saw a 9.59 million barrel draw sown, much more than expected; exports surged as well
  • The S&P 500 is currently down 0.52%, Nasdaq Composite is down 0.36%, and Russell 2000 is down 0.98%
  • We are also highlighting our Top Stock Ideas in Brazil, click here: Score a goal with these top stocks in Brazil you MUST check out
  • Bullishness of stocks newsletter writers rises to a 5-month high.  The Investors Intelligence reading has risen 10 out of the last 11 weeks, currently sitting at 53.9%.  It is now at the highest level since the second week of October.   
  • The Euro Stoxx 600 is currently down -0.77%, the FTSE 100 is down -0.22%, the DAX is down -1.44%, and the CAC 40 is down -0.57%
  • Telecommunications (-0.19%), Personal & Household Goods (-0.39%), and Real Estate (-0.46%) stocks are the top performers in the Euro Stoxx 600 today
  • Automobiles & Parts (-2.44%), Basic Resources (-1.78%), and Oil & Gas (-0.79%) stocks are the worst performers in the Euro Stoxx 600 today
  • Investor sentiment for European stocks is negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.31x
  • 207 stocks in the Euro Stoxx 600 are at 4-week highs while 8 stocks are at 4-week lows
  • 115 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

  • The Nikkei 225 finished up +0.2%, the Hang Seng ended down -0.49%, the Hang Seng China Enterprise declined -0.53%, and the CSI 300 was +0.04%
  • Investor sentiment for Japanese stocks finished positive with the advance/decline ratio for the Nikkei 225 closing at 1.68x
  • 33 stocks in the Nikkei 225 hit 4-week highs while 17 stocks reached 4-week lows
  • 10 stocks in the Nikkei 225 closed overbought while 3 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 0.35x
  • 12 stocks in the Hang Seng hit 4-week highs while 2 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

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Global Consumer Stocks Trending in the News

  • Altria (MO) shares suffered in the wake of San Francisco announcing a proposal to ban e-cigarette companies from occupying city-owned property.  There is also a proposal to ban the shipment of e-cigarettes to San Francisco stores.   For the time, these are just proposals.  Altria is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Staples Global Top Stock Ideas.
  • BMW (DB:BMW) issued another profit warning, saying earnings will fall “well below” last year.  BMW has launched a 12 billion euros efficiency drive to battle the effects of trade conflicts and greater electric vehicle use.  BMW will cut down its model offerings, cut development time on new models and hold its employee count steady.  BMW expects pre-tax profit to fall more than 10% this year.  BMW is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • General Mills (GIS) reported fiscal third quarter adjusted EPS of 83 cents, beating consensus of 69 cents.  General Mills reported fiscal third quarter revenue of USD$4.20 billion in line with USD$4.19 billion consensus.  General Mills reported organic volume growth of 5% and sees full year EPS growing 0-1%, up from a drop in sales of up to 3% originally expected.  General Mills is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Staples Global Top Stock Ideas.
  • Kingfisher Plc (LSE: KGF) shares fell after analysts were disappointed with the home-improvement retailer's financial results, which included the worst annual profits since the 2008 financial recession. Kingfisher also announced the resignation of CEO Veronique Laury, although it was not enough to signal a turnaround of the company for analysts. Kingfisher is rated “Unattractive” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Monster Beverage (MNST) was downgraded at Goldman Sachs to neutral from buy.  Monster Beverage also said its price target cut to USD$59 from USD$67.  Goldman sees a 2019 “softer than expected” for Monster Beverage which it expects to pressure earnings, saying he has been “a meaningful deceleration” in sales trends internationally.  Monster Beverage is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Staples Global Top Stock Ideas.
  • Walt Disney (DIS) has completed its acquisition of the major asset of 21st Century Fox (FOXA) in a USD$71.3 billion transaction.  In the wake of the deal, Disney will control Fox’s movie and television production studios, the FX cable channel, Fox Searchlight and National Geographic properties.   The combination of these assets is designed to provide the heft needed to effectively compete in the new media landscape.  Walt 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.  21st Century Fox is not rated in our Global Top Stock Ideas.

Global Information Technology & Communication Services Stocks Trending in the News

  • Alphabet’s (GOOG.L) Google launched a new video game streaming service called Stadia.  Stadia is a platform upon which developers can develop streaming games that can be accessed over the web, bypassing gaming consoles.  Google also introduced its own gaming controller.  Alphabet is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Facebook (FB) announced it will no longer include age, gender and zip code targeting with ads on its site, as part of a settlement to settle five discrimination lawsuits filed by advocacy groups.  Facebook will also pay just under USD$5 million.  Facebook COO Cheryl Sandberg said, “There is a long history of discrimination in the areas of housing, employment and credit, and this harmful behavior should not happen through Facebook ads.”  Facebook is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Inmarsat Plc (LSE: ISAT) shares traded higher by double-digits after it received a takeover offer worth roughly USD$3.3bn from a consortium of private equity and pension funds. The group led by Apa Partners and Warburg Pincus and supported by the Canada Pension Plan Investment Board and the Ontario Teachers’ Pension Plan offered a non-binding cash bid equal to about USD$7.21/share. Inmarsat received a slightly lower takeover offer worth about USD$7.07/share in July 2018. Inmarsat is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Nvidia (NVDA) said it is on track to clear out the inventory it built up anticipating cryptocurrency mining demand that did not materialize.  Nvidia maintained guidance for flat revenue in fiscal 2020 as it completes its inventory draw down, delivering guidance better than the 4% drop in revenue expected by analysts.  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.
  • Sony Corp. (TSE: 6758) and Nintendo Co. (TSE: 7974) shares slipped after Alphabet’s (GOOG.L) Google announced its new game streaming venture, Stadia. Stadia will allow game developers to design games capable of being streamed over an Internet connection, which effectively cuts out traditional gaming consoles. “There is no doubt this service makes life even more difficult for established platforms,” said market strategist Amir Anvarzadeh on the news. Sony Corp. is rated “Attractive” in our Japan Large-Cap Global Top Stock Ideas. Nintendo is not rated in our Global Top Stock Ideas. Alphabet is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Tencent Music Entertainment Group (TME) shares slid after investors were disappointed with the company’s debut financials release. Although Tencent Music Entertainment Group reported 50% revenue growth and an EPS beat in CY4Q2018, analysts harped on the firm’s measly user metrics. Specifically, Social Entertainment, the largest operating segment for Tencent Music Entertainment Group, observed only mild monthly active user growth. Tencent Music Entertainment Group is rated “Unattractive” in our China All-Cap Global Top Stock Ideas.
  • Viacom Inc. (VIAB) and AT&T Inc. (T) shares slid as the former’s looming blackout on DirecTV, who is now owned by AT&T, nears. BTIG analyst Richard Greenfield discussed that he does not see the logic in AT&T risking further detonation by holding out. Greenfield also discussed when DirecTV dropped Viacom networks in 2012, which did not end well for DirecTV and resulted in lost market share. Viacom is rated “Neutral” in our US Large-Cap Global Top Stock Ideas. AT&T is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.

Global Financials Stocks Trending in the News

  • UBS’ (SWX:UBSG) CEO said the first quarter of 2019 has been dismal, one of the toughest environments he has ever seen.  With little M&A activity or IPOs outside of the US, investment banking revenue is down over a third in the first quarter.  His comments indicate the situation is getting even worse than what he described in recent comments.  Global wealth management revenue is down 9% so far this year.  UBS is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.

Global Industrial Stocks Trending in the News

  • Fedex (FDX) issued its second profit warning in the last three months.  Fedex is seeing slowing economic activity globally and is dealing with the digestion of its most recent acquisition in Europe.  Fedex has expected a softer start to the year but sees things developing even worse than initially expected.  Fedex is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Industrials Global Top Stock Ideas.
  • Osram Licht AG (XTRA: OSR) shares slumped after CEO Olaf Berlien told investors that the company will have difficulty reaching its annual targets. Berlien explained that weaker demand from car makers and smartphone providers for components is driving the weaker-than-expected performance this year. Osram Licht is rated “Top Short” in our European Large-Cap Global Top Stock Ideas.
  • Rockwell Automation (ROK) was downgraded to neutral from buy at UBS.  Rockwell Automation also had its price target cut to USD$182 from USD$190.  UBS sees a decelerating growth environment for Rockwell Automation and at this point sees a balanced risk/reward scenario, a primary reason for the downgrade.  Rockwell Automation 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

  • Vale (VALE) received a favorable court decision in its quest to restart some of its shuttered mining operations in Brazil.  A judge has ruled Vale can restart its Brucutu mine, which would restore 30 million of the 80 million tons of production it was ordered to shutter in the wake of its dam disaster.  Vale still needs the OK from the environmental authorities in the state of Minas Gerais and Vale said inform investors when it has that.  Vale is rated “Neutral” in our Brazil All-Cap Global Top Stock Ideas.

Global Health Care Stocks Trending in the News

  • Bayer (DB:BAYN) lost the first phase of its most recent court case alleging its RoundUp weed killer causes cancer.  Analysts are describing the loss as a major blow, as the company was confident it would win the case.  Analysts commented there should remain a significant overhang on the stock given the loss in the case and the chance for further losses.  Bayer is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • Nevro (NVRO) shares soared after Wall Street praised the companies, “new beginning,” as it hired Keith Grossman as CEO. At least four Wall Street firms upgraded their rating for the stock, sending Nevro shares higher by as much as 36% in intraday trading. Analysts across Wall Street highlighted Grossman’s proven ability to lead turnarounds in their upgrades. Nevro is rated “Top Short” in our US Large-Cap Global Top Stock Ideas.

Global Real Estate Stocks Trending in the News

  • Henderson Land Development Company Limited (SEHK: 12) Chairman Lee Shau Kee may be considering stepping down from his position, according to reports. Lee who is 91 years of age, is the second-richest man in the city of Hong Kong. Henderson Land has reportedly proposed that Lee’s sons, Lee Ka Kit and Lee Ka Shing, take his place as joint chairmen and managing directors. Henderson Land is rated “Attractive” in our China All-Cap Global Top Stock Ideas.

 

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Global Top Stock IdeasTOP LONG & TOP SHORT STOCK IDEAS FOR GLOBAL MARKETSMONTHLY TOP IDEAS FROM OUR MULTI-FACTOR QUANTITATIVE MODELS