Yesterday, European stocks continues their advance, with the Stoxx Europe 600 Index rising 1.6%. Germany’s DAX 30 increased 1.1%, the U.K.’s FTSE 100 climbed 1.2% and France’s CAC 40 jumped 1.8%.
76% of STOXX 600 constituents traded higher yesterday.
92% of the shares trade above their 20D MA vs 84% Wednesday (above the 20D moving average).
36% of the shares trade above their 200D MA vs 31% Wednesday (above the 20D moving average).
The Euro Stoxx 50 Volatility index eased 0.39pt to 29.01, a new 52w high.
SECTORS vs STOXX 600
3mths relative high: none
3mths relative low: none
Europe Best 3 sectors
health care, basic resources, utilities
Europe worst 3 sectors
travel & leisure, automobiles & parts, banks
The 10yr Bund yield rose 2bps to -0.41% (above its 20D MA). The 2yr-10yr yield spread rose 1bp to -21bps (below its 20D MA).
GE 07:00: Apr Import Prices MoM, exp.: -3.5%
GE 07:00: Apr Import Prices YoY, exp.: -5.5%
GE 07:00: Apr Retail Sales MoM, exp.: -5.6%
GE 07:00: Apr Retail Sales YoY, exp.: -2.8%
UK 07:00: May Nationwide Housing Prices YoY, exp.: 3.7%
UK 07:00: May Nationwide Housing Prices MoM, exp.: 0.7%
FR 07:45: Apr Household Consumption MoM, exp.: -17.9%
FR 07:45: Apr PPI MoM, exp.: -1.7%
FR 07:45: May Harmonised Inflation Rate YoY Prel, exp.: 0.4%
FR 07:45: May Harmonised Inflation Rate MoM Prel, exp.: 0%
FR 07:45: May Inflation Rate MoM Prel, exp.: 0%
FR 07:45: May Inflation Rate YoY Prel, exp.: 0.3%
FR 07:45: Q1 GDP Growth Rate QoQ final, exp.: -0.1%
EC 09:00: Apr M3 Money Supply YoY, exp.: 7.5%
EC 09:00: Apr Loans to Households YoY, exp.: 3.4%
EC 09:00: Apr Loans to Companies YoY, exp.: 5.4%
UK 09:00: Apr Car Production YoY, exp.: -37.6%
EC 10:00: May Inflation Rate YoY Flash, exp.: 0.3%
EC 10:00: May Core Inflation Rate YoY Flash, exp.: 0.9%
EC 10:00: May Inflation Rate MoM Flash, exp.: 0.3%
GE 13:00: Bundesbank Buch speech
In Asian trading hours, EUR/USD climbed to 1.1086 and GBP/USD held gains at 1.2323. USD/JPY slid to 107.38. This morning, official data showed that Japan’s industrial production declined 9.1% on month in April (-5.7% expected), and retail sales fell 9.6% (-6.9% expected). Meanwhile, jobless rate edged up to 2.6% in April (2.7% expected) from 2.5% in March.
Spot gold edged up to $1,719 an ounce.
#UK – IRELAND#
Rolls-Royce’s, an engineering group, credit rating was downgraded to “BB”, a junk rating, from “BBB-” at S&P Global Ratings, outlook “Negative”. The rating agency said: “Rolls-Royce PLC’s civil aerospace division will be materially affected by lower wide-body and business jet engine sales and lower engine flying hour related receipts from airlines in 2020 and 2021. Its group profitability, cash flow, and credit metrics will be negatively affected. (…) The negative outlook reflects our view that the pandemic will continue to cause disruption and uncertainty around future business prospects to airlines, aerospace companies, and their supply chains, including Rolls-Royce.”
Flutter Entertainment, a bookmaking holding company, announced plans to raise equity through placing 8.05 million new ordinary shares at 0.09 euro per share to institutional investors.
AstraZeneca, a pharmaceutical group, said a phase 3 study showed that its “Tagrisso (osimertinib) demonstrated a statistically significant and clinically meaningful improvement in disease-free survival (DFS) in the adjuvant treatment of patients with early-stage (IB, II and IIIA) epidermal growth factor receptor-mutated (EGFRm) non-small cell lung cancer (NSCLC) after complete tumour resection with curative intent”.
B&M European Value Retail, a variety retailer, posted a 4Q trading update: “Strong end to fourth quarter trading driven by exceptionally strong March performance on Grocery, with B&M UK fascia LFL revenues of +6.6% over the quarter. (…) Strong revenue growth in the first 8 weeks of the new financial year with B&M UK fascia LFL revenues of +22.7%, (…) We have seen a significant bring-forward of demand in some key categories and the remarkably warm Spring weather in the UK has been a major factor behind this during recent weeks. We are not expecting this current level of trading to continue as normal shopping patterns resume.” From a chartist point of view, the share is trading within a trading-range, a broadening formation shaped between 220 & 450p. Only a push above 450 would trigger a rise towards 600 or a break below 220 (also support since 2014) would lead the stock to 100.
BP, an oil giant, was downgraded to “hold” from “buy” at Societe Generale.
Volkswagen, an automobile group, announced a 2 billion euros investment plan for its business in China, including the acquisition of a 50% interest in JAG, an increase of stake in JAC Volkswagen from 50% to 70% and the purchase of 26% stake in battery manufacturer Gotion High-Tech.
Continental, an automotive parts manufacturer, was downgraded to “equalweight” from “overweight” at Morgan Stanley.
Renault, an automobile group, announced plans to reduce fixed costs by more than 2 billion years over a three-year period, including a cut in global workforce by 14,600 and reduction in global production capacity to 3.3 million vehicles from 4.0 million vehicles in 2019.
Safran, an aircraft engine and aerospace-component manufacturer, said revenue was down around 50% on year in April, citing bigger impacts of the Covid-19 crisis. The company added: “Amid a global downturn in deliveries for new aircraft, Safran now estimates that less than 1,000 LEAP engines will be delivered in 2020.”
Societe Generale’s, a banking group, credit rating was downgraded to “A-” from “A” at Fitch, outlook “Stable”.
Valeo, an automotive supplier, was upgraded to “overweight” from “equalweight” at Morgan Stanley.
Eni, an Italian oil and gas company, was downgraded to “hold” from “buy” at Societe Generale.
Temenos, an enterprise software specialist, was downgraded to “neutral” from “overweight” at JPMorgan.
Equinor, a Norwegian energy company, was downgraded to “hold” from “buy” at Societe Generale.
E.ON: E0.46, Merck KGaA: E1.3