Yesterday, European stocks slumped, with the Stoxx Europe 600 Index falling 3.4%. Germany’s DAX 30 shed 4.0%, the U.K.’s FTSE 100 sank 3.0%, and France’s CAC 40 was down 3.8%.
89% of STOXX 600 constituents traded lower or unchanged yesterday.
63% of the shares trade above their 20D MA vs 82% Monday (above the 20D moving average).
17% of the shares trade above their 200D MA vs 21% Monday (above the 20D moving average).
The Euro Stoxx 50 Volatility index added 6.92pts to 48.22, a new 52w high.
SECTORS vs STOXX 600
3mths relative high: Healthcare
3mths relative low: Banks
Europe Best 3 sectors
health care, retail, real estate
Europe worst 3 sectors
basic resources, technology, banks
The 10yr Bund yield rose 2bps to -0.45% (below its 20D MA). The 2yr-10yr yield spread rose 2bps to -20bps (above its 20D MA).
UK 07:00: Mar PPI Output YoY, exp.: 0.4%
UK 07:00: Mar PPI Input MoM, exp.: 0.9%
UK 07:00: Mar PPI Input YoY, exp.: 2.1%
UK 07:00: Mar PPI Output MoM, exp.: -0.3%
UK 07:00: Mar Core Inflation Rate YoY, exp.: 1.7%
UK 07:00: Mar Inflation Rate MoM, exp.: 0.4%
UK 07:00: Mar Inflation Rate YoY, exp.: 1.7%
UK 07:00: Mar PPI Core Output MoM, exp.: -0.1%
UK 07:00: Mar PPI Core Output YoY, exp.: 0.4%
UK 07:00: Mar Core Inflation Rate MoM, exp.: 0.6%
UK 07:00: Mar Retail Price Idx MoM, exp.: 0.5%
UK 07:00: Mar Retail Price Idx YoY, exp.: 2.5%
EC 10:00: 2019 Government Budget to GDP, exp.: -0.5%
EC 10:00: 2019 Government Debt to GDP, exp.: 85.9%
EC 15:00: Apr Consumer Confidence Flash, exp.: -11.6
In Asian trading hours, EUR/USD was little changed at 1.0854 while GBP/USD remained subdued at 1.2290. USD/JPY was broadly flat at 107.75.
Spot gold edged up to $1,686 an ounce.
#UK – IRELAND#
Antofagasta, a top copper producer, released a 1Q production report: “Copper production in Q1 2020 was 194,000 tonnes, an increase of 2.9% compared with the same quarter in 2019 and 4.6% higher than in Q4 2019. (…) Gold production was 65,100 ounces in Q1 2020, 4.7% higher than in Q1 2019, (…) Molybdenum production was 2,400 tonnes, a decrease of 1,100 tonnes compared to the same period in 2019. (…) Assuming mining operations continue to run at or close to capacity and no shutdowns are required, Group copper production in 2020 is expected to be at the lower end of the original 725-755,000 tonnes guidance range. (…) Capital expenditure in 2020 is expected to be less than $1.3 billion, a decrease on the $1.5 billion originally guided for 2020.”
CRH, a building materials supplier, issued a 1Q trading update: “Notwithstanding the evolving situation with regard to the global spread of COVID-19, the Group had a positive start to the year with first quarter like-for-like sales 3% ahead of 2019. (…) In light of the recent market volatility, the Board has decided to postpone the Group’s share buyback program until further notice. As announced on 28 February, the Board has proposed a final cash dividend of E0.63 per share for the consideration of shareholders at tomorrow’s AGM.”
Hiscox, an insurance provider, provided an update on COVID-19: “On the basis that disruption caused by restrictions on travel and mass gatherings continues for a six month period from March 2020, Hiscox expects to pay net claims totaling up to $150 million. (…) The level of economic loss experienced is likely to be materially lower than reported revenues.”
Sage Group, an enterprise software company, was downgraded to “sell” from “neutral” at Goldman Sachs.
Hannover Re, an insurance group, announced the withdrawal of its profit guidance for the current year, citing ongoing COVID-19 crisis. The company said it expects 1Q net income to grow 2.1% on year to 300 million euros, while EBIT is anticipated to drop 5.3% to 426 million euros.
Talanx, an insurance company, said it has decided to withdraw profit outlook for 2020, amid ongoing coronavirus pandemic, while confirming its dividend proposal of 1.50 euros per share for 2019. The company reported that preliminary 1Q net income fell 5.1% on year to 223 million euros.
Vivendi, a mass media conglomerate, announced the acquisition of a 10.6% stake in media company Lagardere without providing financial terms. The stake is worth about 241 million euros based on Lagardere’s share price on Tuesday.
Kering, a luxury goods conglomerate, reported that 1Q revenue slid 15.4% on year to 3.20 billion euros, down 16.4% on a comparable basis.
Carrefour, a retail group, was downgraded to “neutral” from “buy” at Goldman Sachs.
Grifols, a pharmaceutical and chemical manufacturer, was downgraded to “neutral” from “overweight” at JPMorgan.
Akzo Nobel, a chemical firm, reported that 1Q net income from total operations jumped 75.4% on year to 114 million euros and adjusted operating income rose 31.3% to 214 million euros on revenue of 2.06 billion euros, down 5.8%.
ASM International, a semiconductor process equipment supplier, posted 1Q adjusted net income rose 47.0% on year to 78 million euros on net sales of 325 million euros, up 30.7%. The company said: “For Q2 on a currency comparable level we now expect sales of E300-350 million. We slightly widened the range by reducing the lower end compared to the earlier indicated range of E330-350 million.”
STMicroelectronics, a semiconductor manufacturer, announced that 1Q net income increased 7.9% on year to 192 million dollars and operating income climbed 9.4% to 231 million dollars on revenue of 2.23 billion dollars, up 7.5%. The company added: “We will drive the Company based on a plan for FY20 revenues between $8.8 billion and $9.5 billion. We plan for growth in the second half over the first half to be in the range of $340 million to $1.04 billion. (…) We have reduced our CAPEX plan for 2020 from $1.5 billion to a range between $1.0 billion to $1.2 billion.”
UniCredit, an Italian bank, said it will book an additional 0.9 billion euros generic loan loss provisions, as it sees the eurozone’s full-year 2020 GDP declining 13% before a 10% recovery in full-year 2021.
Fiat Chrysler Automobiles, a vehicle manufacturer, announced that it has drawn down its 6.25 billion euros revolving credit facility, citing the continuing uncertainty relating to the impacts of COVID-19.
Roche, a pharmaceutical group, announced that 1Q revenue grew 2% on year (+7% at constant exchange rate) to 15.14 billion Swiss franc. Regarding full-year outlook, the company said: “Based on the current assessment of the COVID-19 impact sales are expected to grow in the low- to mid-single digit range, at constant exchange rates. Core earnings per share are targeted to grow broadly in line with sales, at constant exchange rates. Roche expects to increase its dividend in Swiss francs further.”
Credit Suisse, a banking group, was downgraded to “hold” from “buy” at HSBC.
Ericsson, a networking and telecommunications company, announced that 1Q net income dropped 5% on year to 2.3 billion Swedish krona and operating income slid 12% to 4.3 billion Swedish krona on revenue of 49.8 billion Swedish krona, up 2%. The company said: “We remain positive on the longer term outlook, but the second quarter is likely to be a tad softer than normal due to timing of strategic contracts and uncertainty induced by Covid-19. (…) However, with current visibility we maintain the targets for 2020 and 2022.”
Svenska Handelsbanken, a banking group, announced that 1Q net income declined 17% on year to 3.94 billion Swedish krona and operating income dropped 16% to 5.14 billion Swedish krona on net interest income of 8.23 billion Swedish krona, up 4%. Also, CET1 climbed to 17.6% from 16.4% in the prior-year period, while return on equity fell to 10.3% from 13.4%.