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Investors feast at the buffet of risk as European stocks rally broadly on strong data; Asia higher overnight

Apr 03, 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 rally broadly on positive economic data and close at an 8 month high
  • Markit Eurozone PMI for March was 53.3, beating 52.7 consensus
  • Eurozone Retails Sales grew 0.4% in March, beating 0.3% consensus
  • This is real interesting – ETFs focused on the “value factor” saw recording outflows in 1Q, with $4 billion flowing out after seeing more than $10 billion flow in during 4Q.
  • After a strong start to 2019, only 36% of active managers of large-cap portfolios in the US are beating their respective averages
  • The Euro Stoxx 600 closed up +1.01%, the FTSE 100 advanced +0.37%, the DAX rose +1.7%, and the CAC 40 finished up +0.84%
  • Investor sentiment for European stocks finished trading positive with the advance/decline ratio for the Euro Stoxx 600 currently at 5.67x
  • Chemicals (+2.12%), Financial Services (+1.93%), and Basic Resources (+1.78%) stocks were the top performers in the Euro Stoxx 600 today
  • Health Care (-0.28%), Food & Beverage (+0.05%), and Personal & Household Goods (+0.15%) stocks were the worst performers in the Euro Stoxx 600 today
  • 168 stocks in the Euro Stoxx 600 hit 4-week highs while 5 stocks closed at 4-week lows
  • 74 stocks in the Euro Stoxx 600 finished the trading session overbought while 3 stocks closed oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, closed little changed -0.12 points today to 14.67 after closing at 14.78 yesterday
  • EUR€ is currently up +0.339% against the USD$ to 1.1242

Asian Stock Markets Indexes

Asian Markets Recap

  • China's trade delegation arrived in Washington, DC, led by Vice Premier Liu He, to continue trade negotiations; China cited "new progress" after last week's talks and is looking to build on that momentum
  • China said it will extend its suspension of retaliatory tariffs on autos and include fentanyl on its list of controlled substances, in an effort to generate a positive atmosphere for these talks
  • Read more on US-China trade talks in our blog post: Let's make a deal! China looking to close a trade deal with US as negotiators arrive in Washington
  • The Nikkei 225 finished up +0.97%, the Hang Seng ended up +1.22%, the Hang Seng China Enterprise up +1.37%, and the CSI 300 was +1.28%
  • Investor sentiment for Japanese stocks finished positive with the advance/decline ratio for the Nikkei 225 closing at 1.78x
  • 53 stocks in the Nikkei 225 hit 4-week highs while 15 stocks reached 4-week lows
  • 12 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 positive with the advance/decline ratio for the Hang Seng closing at 6.14x
  • 17 stocks in the Hang Seng hit 4-week highs while 1 stocks reached 4-week lows
  • 14 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

  • Dunkin’ Brands (DNKN) was downgraded today to market perform from outperform at BMO Capital Markets.  Dunkin’ Brands saw its price target cut to $75 from $80.  Dunkin’ Brands has an average price target of $71.19 in the market today.  BMO believes the fundamentals of Dunkin’ Brands’ story remains intact but at this point the valuation is “less persuasive.”  Dunkin' Brands is rated "Attractive" in our US Large-Cap Global Top Stock Ideas and "Attractive" in our  US Consumer Discretionary Global Top Stock Ideas.
  • GameStop Corp. (GME) shares slid to their lowest level since 2004 after the retailer projected sales to fall between 5% and 10% in FY2019. GameStop also announced a plan to cut costs by USD$100mm this year to combat headwinds faced by the company. GameStop is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Henkel AG & Co. KGaA (XETRA: HEN3) shares slid after M.M. Warburg Investment Research downgraded the stock from buy to hold. Over the last 3 months, analysts have lowered the consensus 1-year price target for Henkel AG by 13%. Henkel AG currently maintains 8 buy recommendations, 21 hold recommendations, and 4 sell recommendations across analyst ratings. Henkel AG is rated “Top Short" in our European Large-Cap Global Top Stock Ideas
  • Lamb Weston (LW) shares edged higher after the company announced FY3Q2019 adjusted EPS of USD$0.95 that beat the highest analyst estimates ranging between USD$0.80 and USD$0.87. Lamb Weston’s net sales of USD$926.8mm in FY3Q2019 also surpassed analyst consensus of USD$895.2mm. Lamb Weston is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Staples Global Top Stock Ideas.
  • Pandora A/S  (CSPE: PNDORA) shares sank after Carnegie published a note that questions the company’s sales growth in China. In its note, Carnegie warned clients that Pandora may have faced challenges in its CY1Q2019 sales in China, citing March sales figures from Alibaba’s website Tmall. Pandora is rated “Neutral" in our European Large-Cap Global Top Stock Ideas.
  • Proctor & Gamble (PG)  in under pressure in India and other countries to help deal with the vast amount of waste generated by its disposable products.  India is a particularly attractive market for Proctor & Gamble with massive growth in demand expected for its products and the government is seeking help to deal with the waste generated by disposable diapers and sanitary pads.  Activists in India have called on P&G to help deal with this waste and the health risks it entails.  Proctor & Gamble is rated "Top Buy" in our US Large-Cap Global Top Stock Ideas and "Top Buy" in our US Consumer Staples Global Top Stock Ideas
  • Saint Gobain (ENXTPA: SGO) shares traded higher following reports of a possible of the company’s Pont-A-Mousson unit to China’s XinSing. A report by Les Echos cites unions and a memo that was sent to the finance ministry of France as evidence. Saint Gobain is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas. 
  • Superdry Plc (LSE: SDRY) shares fell after co-founder Julian Dunkerton won a battle to rejoin the board of directors of the UK apparel retailer. Since Dunkerton’s initial departure about a year ago, Superdry shares have tanked 65% amid repeated profit warnings from the company. Prior to his re-appointment, Dunkerton had been a vocal advocate of current management, having launched a, “Save Superdry,” website. Superdry is rated “Neutral" in our United Kingdom All-Cap Global Top Stock Ideas.
  • Former Wynn Resorts Ltd. (WYNN) executives hid allegations that founder Steven Wynn sexually harassed women from the Massachusetts Gaming Commission, according to a report from the regulator. The Massachusetts Gaming Commission is now considering revoking Wynn’s license to operate in the state as the company plans to open a USD$2.6bn resort in the Boston Harbor. Wynn Resorts is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  

Global Information Technology and Communication Services Stocks Trending in the News

  • Advanced Micro Drives (AMD) and other chip stocks are trading near record highs after Nomura Instinet projected annual sales growth for the industry of as much as 9% from 2020 to 2025. Nomura cited factors such as artificial intelligence, autonomous driving, 5G communications, and Internet of Things as drivers for growth in the sector. Advanced Micro Drives is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.  
  • Alibaba (BABA) is still a buy at Jefferies despite Altaba’s exit from its 11% stake in the company. Jefferies analyst Karen Chan said that the stake sale will only drive a near-term overhang on Alibaba’s stock performance. Alibaba currently maintains 51 buy recommendations, 1 hold recommendation, and 1 sell recommendation across analyst ratings. Alibaba is rated “Top Buy” in our China All-Cap Global Top Stock Ideas.  
  • CommVault Systems (CVLT) shares slipped the most in more than a year after Ron Miller, the company’s Senior Vice President of Worldwide Sales, resigned effective immediately. Miller had spent 19 years with the company, including 8 years in his former role as a Senior Vice President. CommVault Systems is rated "Attractive" in our US SMID-Cap Global Top Stock Ideas and "Attractive" in our US Information Technology Global Top Stock Ideas
  • Wirecard (XTRA:WRI) said it is unable to publish the full reports the law firm prepared regarding allegations in Singapore.  Wirecard said because of third-party rights it could not release the report as names and details in the report could subject the company to legal risks.  Wirecard is investigating the release of a redacted version to the public.  Wirecard is rated “Neutral" in our European Large-Cap Global Top Stock Ideas.

Global Industrials Stocks Trending in the News

  • Cosco Shipping Energy Transportation Co. (SEHK: 1138) shares soared after an announced agreement to strategically cooperate with Seaspan Corp. (TCK). According to early reports, both companies have committed to strengthen their exchange and collaboration on opportunities that relate to liquified natural gas investments, projects, transportations, and more. Cosco Shipping Energy Transportation is rated “Attractive” in our China All-Cap Global Top Stock Ideas.  
  • Delta Air Lines (DAL) shares appreciated after renewing its 23-year long partnership with American Express (AXP) for an additional 11 years, increasing the likelihood that Berkshire Hathaway (BRK.B) will purchase the airline. Stifel analyst Joseph DeNardi wrote in a note to clients, “While we had suspected that Delta could announce an extension with AmEx at some point this year, this is earlier than we had thought and the improvement in revenue and economics are significantly better than we were expecting.” Delta Air Lines is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Industrials Global Top Stock Ideas. American Express is rated “Attractive” in our US Large-Cap Global Top Stock Ideas. Berkshire Hathaway is not rated in our Global Top Stock Ideas.  

Global Financial Stocks Trending in the News

  • Ameriprise Financial Inc. (AMP) shares moved higher after the company announced the sale of its auto and home unit to American Family Insurance Mutual Holding Co. for USD$1.05bn in gross cash proceeds. Ameriprise CEO Jim Cracchiolo sees the deal as a way for the company to increase focus on its financial advice, wealth management, and asset management operations. Ameriprise is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas.  
  • UBS Group AG (SWX: UBSG) is considering several options for its asset management unit, including a partial sale or merger of the unit, according to people familiar with the matter. According to reports, UBS is considering the acquisition of Deutsche Bank AG’s asset manager, DWS Group (TCK), to combine with its own asset management business and spin off the two as their own entity. UBS is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.  

Global Commodites & Power Stocks Trending in the News

  • Tellurian Inc.’s (TELL) planned USD$28bn liquefied natural gas plant moved a step closer to being started after Total SA (ENXTPA: FP) announced intentions to commit more funding to the project. Total SA will invest USD$500mm in the project in exchange for receiving about 1mm tons of liquefied natural gas annually and to increase its stake in Tellurian. Tellurian is rated “Unattractive” in our US SMID-Cap Global Top Stock Ideas. Total SA is rated “Attractive” in our European Large-Cap Global Top Stock Ideas.  

 

 

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