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European stocks close lower despite US delaying any EU tariffs for six months

May 17, 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

  • The US is delaying any new tariffs on the EU for at least 6 months
  • Iron Ore traded above $100 this morning as the present supply crunch is not expected to improve any time soon, read more: The Ore Score: What in the World is going on with Iron Ore? 
  • Check out Quantamize on CNBC discussing why we love ALPHABET (GOOGL): click here for video
  • Buybacks for everyone: No Stoppin' It Now! S&P 500 Stock Buybacks Continue at Rapid Pace
  • The Euro Stoxx 600 closed down -0.36%, the FTSE 100 declined -0.07%, the DAX fell -0.58%, and the CAC 40 finished down -0.18%
  • Investor sentiment for European stocks finished trading negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.41x
  • Travel & Leisure (+0.83%), Oil & Gas (+0.63%), and Personal & Household Goods (+0.37%) stocks were the top performers in the Euro Stoxx 600 today
  • Real Estate (-1.15%), Automobiles & Parts (-1.13%), and Banks (-1.09%) stocks were the worst performers in the Euro Stoxx 600 today
  • 91 stocks in the Euro Stoxx 600 hit 4-week highs while 42 stocks closed at 4-week lows
  • 41 stocks in the Euro Stoxx 600 finished the trading session overbought while 25 stocks closed oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, closed up +2.56 points today to 17.62 after closing at 15.06 yesterday
  • EUR€ is currently little changed against the USD$ at 1.1167

Asian Stock Markets Indexes

Asian Markets Recap

  • China state media said it has little interest in further talks with the US at this time, saying without meaningful moves from the US, there is no reason for anyone to come to China 
  • China also said it will step up stimulus for its economy in response to the tariffs from the US 
  • China accused the US of "tricks to disrupt the atmosphere" with its latest moves
  • An update on the Trade War: Report from the Front Lines: An Update of the State of Each Front in the Trade War
  • The Nikkei 225 finished up +0.89%, the Hang Seng ended down -1.16%, the Hang Seng China Enterprise declined -1.14%, and the CSI 300 was -2.54%
  • Investor sentiment for Japanese stocks finished positive with the advance/decline ratio for the Nikkei 225 closing at 2.26x
  • 28 stocks in the Nikkei 225 hit 4-week highs while 19 stocks reached 4-week lows
  • 5 stocks in the Nikkei 225 closed overbought while 53 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 0.09x
  • 3 stocks in the Hang Seng hit 4-week highs while 15 stocks reached 4-week lows
  • 0 stocks in the Hang Seng closed overbought while 11 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

  • Amazon (AMZN) is becoming one of the biggest investors in UK delivery company Deliveroo.  Amazon led the most recent $575 million round of financing.  Deliveroo competes with Uber’s (UBER) Eats delivery service in London and a number of other European markets.  Deliveroo has raised a total of $1.53 billion but did not disclose a valuation.  Amazon is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.  Uber is not yet rated on our Global Top Stock Ideas.
  • Dillard’s (DDS) reported first quarter net sales that trailed consensus.  Dillard’s posted first quarter net sales of $1.47 billion while consensus was for $1.5 billion.  First quarter EPS of $2.99 beat consensus of $2.89.  Dillard’s delivered same store sales growth of 0%, behind the 2% expected, while total sales grew 1%, also trailing consensus of 2%.  Dillard’s is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas
  • Just Eat Plc. (LSE: JE) shares slid following reports that tech giant Amazon (AMZN) is leading the charge of a $575 million investment in Deliveroo, a fast growing startup also in competition with Uber Technologies (UBER). To date, Deliveroo has raised $1.53 billion in funding. According to Bloomberg, the recent news of Amazon’s investment in the food delivery space will heighten pre-existing concerns of Just Eat shareholders. Just Eat is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas. Amazon is rated “Neutral” in our US Large-Cap Global Top Stock Ideas. Uber is not yet rated in our Global Top Stock Ideas.
  • Luckin Coffee Inc. (LK) shares climbed in its debut trading day after the newly public Starbucks (SBUX) rival in China raised $561 million in an expanded US IPO. Shares of Luckin climbed as high as 51% above its IPO price in trading in Asia on Thursday. Earlier in February, analysts had only projected Luckin Coffee to raise $300 million through a public offering. Luckin is not yet rated in our Global Top Stock Ideas.
  • Pinterest Inc. (PINS) shares fell by the most intraday ever after the company announced a disappointing outlook. Still, analysts were urging investors against selling off the stock. Mark May of Citi, for example, told clients that Pinterest’s results, “reflect the strong momentum in the business and the opportunities to drive future growth in several ahead.” RBC Capital Markets analyst Mark Mahaney, meanwhile, praised the firm’s monthly active user growth and “solid” trend in average revenue per user. Pinterest is not yet rated in our Global Top Stock Ideas.
  • Sony Corp. (TSE: 6758) shares surged to their highest level since December after CEO Kenichiro Yoshida announced a record share buyback just months after the company finished a program of similar magnitude. The repurchase period for Sony shares began on Friday and will continue until March 31st, 2020. Sony just recently completed the repurchase of 1.5% of its common shares for 100 billion yen. Sony Corp. is rated “Attractive” in our Japan Large-Cap Global Top Stock Ideas.
  • Tesla (TSLA) CEO Elon Musk sent an email to all Tesla employees saying that he and its new CFO will now personally examine all expense in a “hardcore” effort to cut costs.  The aggressive moves come in the wake of huge losses last quarter.  Musk noted that the $2.2 billion cash balance Tesla has will only last 10 months at its current burn rate requiring a focus on containing costs like never before.  Tesla is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  Uber is not yet rated on our Global Top Stock Ideas.
  • Under Armor (UAA) shares surged after JPMorgan’s Matthew Boss upgraded the stock from neutral to overweight. Boss explained to clients that meetings with Under Amour's CEO, COO, CFO, and CDO revealed a, “controlled confidence,” among management. Boss expects Under Armor’s mix of product, innovation, and marketing to drive growth acceleration through FY2020 in the firm’s top and bottom line. Under Armor is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Walmart (WMT) was upgraded to accumulate from hold at Gordon Haskett.  Walmart’s price target was raised to $115 from $99.  Walmart is executing well with an e-commerce strategy that is showing results.  Walmart is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Staples Global Top Stock Ideas.  Uber is not yet rated on our Global Top Stock Ideas.

Global Information Technology Stocks Trending in the News

  • Applied Materials (AMAT) was upgraded to buy from neutral at B. Riley FBR.  Applied Materials saw its price target hiked to $54 from $46 as well.   B. Riley sees increased confidence that near-term stability for Applied Materials has arrived and that the overall situation is improving.  Applied Materials is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.  
  • Baidu (BIDU) reported its first quarterly loss since its IPO in 2005.  Baidu posted a 327 million yuan loss in the quarter.  Baidu also provided guidance that trails consensus, saying it expects revenue in the coming quarter to be 25.1 billion to 26.6 billion yuan, well below consensus of 29.3 billion yuan.  Baidu is facing multiple headwinds as it faces a slowing China.  Baidu is rated “neutral” in our China All-Cap Global Top Stock Ideas
  • Hewlett Packard Enterprise (HPE) announced it agreed to acquire Cray Inc in a $1.4 billion deal.  Cray (CRAY) shareholders will receive $35 per share, a 17% premium to yesterday’s close.  Cray is a maker of supercomputers that Hewlett Packard Enterprise is acquiring to bolster its position in the market as it focuses on artificial intelligence and distributed computing.  This is Hewlett Packard Enterprise’s biggest deal since it was created in 2015 from the breakup of Hewlett Packard.  Hewlett Packard Enterprise is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.  Cray Inc is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.  
  • Nvidia (NVDA) reported first quarter revenue and earnings that beat consensus.  Nvidia reported first quarter EPD of 88 cents, beating 81 cents consensus.  Revenue of $2.22 billion came ahead of $2.19 billion.  Nvidia provided second quarter revenue guidance of $2.5 billion to $2.6 billion while consensus is presently $2.53 billion.  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.  

Global Industrials Stocks Trending in the News

  • Air Canada (TSX:AC) announced that it is in exclusive talks to acquire Transat Airlines (TSX:TRZ) for $387 million.  Air Canada said it is offering a 23% premium for Transat.  Air Canada’s offer is over twice the price that Transat was trading at on April 30th when it announced it was in talks with a potential suitor.  Air Canada is rated “Neutral” in our Canada All-Cap Global Top Stock Ideas.  Transat Airlines is not rated in our Global Top Stock Ideas.
  • Boeing (BA) has completed the software development and updated the software used on the 737 Max.  Boeing has flown 207 flights for a total of 360 hours of flight time.  Boeing is providing the FAA with additional requested data as the FAA reviews updated training materials.  Boeing is hoping to schedule certification flights soon with the FAA.  Boeing is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Industrials Global Top Stock Ideas.  
  • Deere & Co. (DE) reported earnings that missed consensus and cut its guidance as trade tension starts to be felt further.   Fiscal second quarter EPS of $3.52 trailing consensus of $3.62.  Deere net sales in the second quarter was $11.34 billion, ahead of $10.18 billion.  Deere provided full year sales growth guidance of 5%, a cut from previous 7% guidance.  Deere sees full year net income of $3.3 billion, down from $3.56 billion.  Deere & Co. is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Industrials Global Top Stock Ideas.  

Global Commodity Stocks Trending in the News

  • Vale (VALE) alerted authorities that another of its tailings dams could collapse as soon as next week.  Vale informed that a tailings dams at a mine in Barao de Cocais in southeast Brazil could collapse due to instability at a nearby inactive mine.  Vale said residents in the vicinity of the 280-foot high dam have been evacuated.  This comes in the wake of Vale’s dam collapse a few months ago in which 270 people were killed.  Vale is rated “Neutral” in our Brazil 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