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A little bit of sun can't pierce the clouds over Europe-Europe sells off despite strong German Business Confidence reading

Mar 25, 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 close lower on global growth fears despite strong German data
  • German Business Confidence unexpectedly climbed to 99.6 in March, beating the 98.5 consensus handily
  • US-China trade talks resume today with a cabinet-level US delegation arriving in China 
  • UK PM Thersesa May resisted call for her to quit today amid the disarray sorrounding Brexit
  • With less than 2 weeks to come up with a revised Brexit proposal, there could be another vote on Brexit this week if a new proposal is presented
  • Globally, bond yields in many markets are at record lows, "sounding the same alarm" of a coming slowdown, according to a report in Bloomberg today
  • Check out our Book of the Week:  Get Your Financial Life Together!! Your Money or Your Life, by Vicki Robin, the Book of the Week
  • The Euro Stoxx 600 is currently down -0.5%, the FTSE 100 is down -0.6%, the DAX is down -0.26%, and the CAC 40 is down -0.3%
  • Utilities (-0.33%), Banks (-0.27%), and Basic Resources (-0.53%) stocks are the top performers in the Euro Stoxx 600 today
  • Retail (-0.65%), Health Care (-0.62%), and Construction & Materials (-0.29%) 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 0.33x
  • 81 stocks in the Euro Stoxx 600 are at 4-week highs while 93 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 --3.01%, the Hang Seng ended down -2.03%, the Hang Seng China Enterprise declined -2.48%, and the CSI 300 was -2.37%
  • Investor sentiment for Japanese stocks finished negative with the advance/decline ratio for the Nikkei 225 closing at 0.01x
  • 0 stocks in the Nikkei 225 hit 4-week highs while 85 stocks reached 4-week lows
  • 3 stocks in the Nikkei 225 closed overbought while 11 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 0.04x
  • 0 stocks in the Hang Seng hit 4-week highs while 11 stocks reached 4-week lows
  • 1 stock 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

  • Davide Campari-Milano Spa (BIT: CPR) shares touched their all-time high after Goldman Sachs upgraded the Aperol maker from neutral to buy as the company offers one of the, “most compelling,” growth opportunities among European staples. Goldman Sachs analyst Mitch Collett explained in a note to clients, “Analysis of per capita consumption and historical growth in Aperol’s legacy markets suggests that US should be able to sustain 50%-60% per annum growth to 2023, given fewer than one in a thousand US consumer currently drink Aperol versus one in ten in Italy and one in forty in Germany.” Davide Campari-Milano is rated “Attractive” in our European SMID-Cap Global Top Stock Ideas.
  • Lululemon (LULU) was downgraded to neutral from outperform at Wedbush today.  Wedbush cut Lululemon’s price target to USD$155 from USD$176.  Lululemon is likely to have had a turbulent February, like the rest of retails, and is expected to have softening revenue growth as compared with the start of the year.  Lululemon reports fourth quarter results on March 27.  Lululemon is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas.
  • GM (GM) plans to invest USD$1.8 billion in US manufacturing plants in 5 US states, including Ohio.  A total of 700 jobs will be added as part of the investments.  GM made the announcement at one of its Ohio plants, the same week President Trump lambasted the company for closing a different plant in Ohio.  GM is investing in an electric vehicle plant while closing a plant that builds small cars than Americans have been shunning.  GM is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas
  • Li Ning Co. Ltd. (SEHK: 2331) shares slid after China Galaxy Securities analyst Tony Ka Ho Li downgraded the recommendation for the stock from buy to hold. Despite the recommendation downgrade, China Galaxy Securities increased its price target for Li Ning Co. from HK$10.05/share to HK$12.40/share, implying a 7.3% upside from Friday’s closing price. Li Ning Co. is rated “Top Buy” in our China All-Cap Global Top Stock Ideas.
  • Naspers (JSE:NPN) will separate its holding in Tencent (TCEHY, SEHK:700), now valued at USD$133 billion, in a separate listing on the Euronext exchange in Amsterdam.  Naspers holds 31% of Tencent and the holding’s value has long dwarfed the value of Naspers itself.  The new listing is meant to attract more international investors.  Naspers is not rated in our Global Top Stock Ideas.  Tencent is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
  • TreeHouse Foods Inc. (THS) shares traded higher after SunTrust upgraded its stock recommendation from hold to buy. SunTrust also hiked its price target for TreeHouse Foods from USD$55/share to USD$75/share, which implies a 14% upside from Friday’s closing share price. The average analyst price target for TreeHouse Foods stock is USD$63.18/share while analysts have increased their average price target for TreeHouse by 17% over the last 3 months. TreeHouse is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Consumer Staples Global Top Stock Ideas.
  • Winnebago (WGO) reported fiscal second quarter 2019 EPS od 68 cents, beating consensus of 58 cents.  Fiscal second quarter revenue of USD$432.7 million missed consensus of USD$468 million.  Winnebago’s CEO commented that Winnebago saw improved margins on a better product mix despite seeing moderately lower revenues.  Winnebago is rated “Attractive” in our US SMID-Cap Global Top Stock Ideas and “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas.

Global Information Technology & Communication Services Stocks Trending in the News

  • Akamai Technologies (AKAM) was downgraded to sell from hold at Deutsche Bank,  Akamai saw its price target cut to USD$58 from USD$64.  Deutsche downgraded the stock due to tough year-on-year comparisons and the strong possibility that it will lose market share in the coming year.  Akamai Technologies 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) is set to debut its video streaming service today in a scheduled event.  The announcement is expected to start Apple’s shift towards more services business as its flagship iPhone has started to see lags in sales.  Apple is expected to announce it will sell separate subscriptions for news and pay TV.  Apple is also expected to announce its Apple TV app will begin to work on other streaming devices, not just its own devices.  Apple is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Avaya Holdings Corp. (AV) shares soared by as much as 36%, the stock’s largest intraday move on record, after Reuters reported that Guggenheim analyst Nandan Amladi called the stock, “deeply undervalued,” relative to peers. The Reuters report also speculated that a private equity company may consider a leveraged buyout of Avaya. The Reuters report notes that Avaya shares are down by roughly 22% from its initial public offering price. Avaya is not rated in our Global Top Stock Ideas.
  • Criteo (CRTO) and Trade Desk (TTD) shares fell on Monday following a report that Alphabet’s (GOOG.L) Google is considering changes to its consumer and advertising-facing tools, some of which could restrict third-party ad-targeting practices. The report, published by Adweek, explains that there are several different working groups in the company working to address how advertising will evolve within Google. Criteo is not rated in our Global Top Stock Ideas. Trade Desk is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology 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.
  • Texas Instruments (TXN) was downgraded at Bernstein to market perform from outperform.   Bernstein maintained its USD$115 price target.  Bernstein said it is “increasingly nervous about the semiconductor industry” for the rest of 2019.  While Bernstein is happy there was a snap-back in the sector recently, the rest of the year is still cloudy for Bernstein, hence the downgrade.  Texas Instruments is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Viacom Inc. (VIAB) shares traded higher by the most intraday in more than 6 months after the media giant resolved its contract dispute with AT&T Inc. (T). The resolved dispute will prevent a blackout of popular cable channels such as Nickelodeon and MTV on the AT&T network. Viacom is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary 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 Industrial Stocks Trending in the News

  • Boeing (BA) and the fast-tracked certification of its 737-Max aircraft is under intense security from federal investigators in the wake of 2 crashed.  Lawmakers in Congress are asking why the FAA has delegated some of the certifications to Boeing itself, according to the Wall Street Journal.  Boeing for years lobbied Congress and the FAA to speed up the time it takes to certify a new aircraft.  The approval of the most recent 737 will be taken apart step by step by investigators.  Boeing is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.
  • Hitachi Construction (TSE: 6305) is refuting reports from Nikkei Business that claims its parent, Hitachi, is considering the sale of its stake in the construction part manufacturer. Hitachi Construction shares fell on the initial reports. Hitachi Construction is rated “Unattractive” in our Japan Large-Cap Global Top Stock Ideas.
  • Jet Airways India Ltd. (BSE: 532617) shares edged higher after Founder Naresh Goyal stepped down from Chairman of the cash-strapped company amid pressure from creditors. As a result of the resignation, creditors will provide Jet Airways with as much as 15bn rupees (USD$218mm) in debt funding. Jet Airways is rated “Top Short” in our India All-Cap Global Top Stock Ideas.
  • Trinity Industries (TRN) was downgraded by Buckingham Research to neutral from buy.  Trinity also saw its price target cut to USD$26 from USD$32.  Buckingham warned of a deterioration in lease rates for both railcars and sand cars, seeing a low single digit drop in rates.  An environment of generally weak railcar demand was cited as a reason for the downgrade.  Trinity Industries is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Industrials Global Top Stock Ideas.

Global Health Care Stocks Trending in the News

  • Bayer AG (DB: BAYN) and Johnson & Johnson (JNJ) shares both edged lower after the companies agreed to pay USD$775mm to resolve claims that blood-thinning drug Xarelto sometimes caused internal bleeding. Janssen, a subsidiary of Bayer and Johnson & Johnson, was more than 20,000 patent suits at one time over its Xarelto drug, which has allegedly been linked to 370 deaths. Bayer is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas. Johnson & Johnson is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Biogen (BIIB) announced it will buy back USD$5 billion of its stocks.  The announcement comes in the wake of the failure of its Alzheimer’s drug that caused it to lose a third of its market cap.  Wall Street has been speculating on its next move with Biogen potentially acquiring another player or even itself being a target for a takeout.  Biogen is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Eli Lilly (LLY) is publishing more details pricing information on its insulin sales that have come under increased scrutiny.  Eli Lilly has raised the list price considerably over the last few years, eliciting the ire of Congress, that has started to look into the pricing.  Eli Lilly said despite the list price hikes, after discounts and rebates, its actual sale price has fallen 8% over the last 5 years.  Eli Lilly is rated “Neutral” in our US Large-Cap Global Top Stock Ideas
  • Fresenius Medical Care AG (XTRA: FME) shares edged higher while the broader European healthcare sector fell amid an upgrade from hold to buy for the stock from Commerzbank. Commerzbank also hiked its price target for Fresenius from 68 euros/share to 90 euros/share. Commerzbank analyst Oliver Mertzger explained in a note to clients that, “Stronger momentum and good prospects do not appear adequately reflected in the share price.” Fresenius Medical Care is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Thermo Fisher (TMO) is acquiring Brammer Bio for USD$1.7 billion in cash.  Thermo Fisher is looking to expand its reach in the gene and cell-therapy business where Brammer Bio is strong.  Thermo Fisher expects the acquisition to add 10 cents a share to adjusted earnings in the first full year of ownership.  Thermo Fisher is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.

Global Commodities & Energy Stocks Trending in the News

  • Newmont Mining’s (NEM) offer for Goldcorp (TSX:G) should be accepted, according to an Institutional Shareholder Services (ISS) report.  ISS said, “The arrangement makes strategic sense.”  Newmont’s USD$10 billion acquisition of Goldcorp will create the world’s largest gold miner.  Newmont Mining is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.  Goldcorp is rated “Neutral” in our Canada 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