Yesterday, European stocks closed in negative territory. The Stoxx Europe 600 Index fell 0.87%. Germany's DAX 30 dropped 0.51%, France's CAC 40 lost 1.32%, and the U.K.'s FTSE 100 was down 1.00%.
58% of STOXX 600 constituents traded lower or unchanged yesterday.
72% of the shares trade above their 20D MA vs 79% Tuesday (above the 20D moving average).
51% of the shares trade above their 200D MA vs 52% Tuesday (above the 20D moving average).
The Euro Stoxx 50 Volatility index added 0.72pt to 24.21, a new 52w high.
SECTORS vs STOXX 600
3mths relative high: Financial Services, Chemicals, Construction, Utilities, Industrial
3mths relative low: Pers. & House. Goods, Media
Europe Best 3 sectors
financial services, real estate, construction & materials
Europe worst 3 sectors
energy, media, travel & leisure
The 10yr Bund yield was unchanged to -0.46% (below its 20D MA). The 2yr-10yr yield spread rose 1bp to -20bps (above its 20D MA).
GE 07:00: Aug GfK Consumer Confidence, exp.: -9.6
FR 07:45: Jul Business Confidence, exp.: 77
FR 07:45: Jul Business Climate Indicator, exp.: 78
EC 10:00: ECB Guindos speech
UK 11:00: Jul CBI Industrial Trends Orders, exp.: -58
UK 11:00: Q3 CBI Business Optimism Idx, exp.: -87
UK 12:00: BoE Haskel speech
EC 15:00: Jul Consumer Confidence Flash, exp.: -14.7
UK 00:01: Jul Gfk Consumer Confidence, exp.: -30
In Asian trading hours, EUR/USD held gains at 1.1568 while GBP/USD slipped to 1.2725. USD/JPY was little changed at 107.16.
Spot gold retreated to $1,865 an ounce.
#UK - IRELAND#
RELX, a global provider of information-based analytics and decision tools, released 1H results: "Revenue £3,501m (£3,888m) -10%: Our three largest business areas, STM, Risk & Business Analytics and Legal, which together accounted for 84% of revenue and 87% of adjusted operating profit in full year 2019, reported combined first half revenue of £3,300m (£3,204m). (...) Adjusted operating profit £939m (£1,240m) -24%: (...) Reported EPS 28.4p (39.9p) -29%: Reported EPS includes a credit for gains on disposals and other non-operating items of £6m (£57m). (...) We have announced an interim dividend of 13.6p (13.6p), unchanged from the prior year."
Croda International, a speciality chemicals company, released 1H result: "In reported currency, Group sales were 5.8% lower at £672.9m (2019: £714.7m). (...) Lower volume and adverse product mix saw adjusted operating profit 9.9% lower, and 9.4% lower in constant currency, at £161.6m (2019: £179.4m). (...) Adjusted profit before tax was £152.5m (2019: £170.6m) and adjusted basic earnings per share (EPS) were 88.8p (2019: 98.2p)." Meanwhile, the company declared an unchanged interim dividend of 39.5p per share.
Sage Group, an enterprise software company, issued a 3Q trading update: "Recurring revenue for the first nine months of the year increased by 9.0% to £1,247m, (...) In the third quarter, recurring revenue grew by 6.5% to £421m (Q3 19: £395m), (...) Total Group revenue increased by 4.1% to £1,395m in the first nine months of the year, and by 1.1%
to £460m (Q3 19: £455m) in the third quarter. (...) Given the Group's resilient performance in the third quarter, we now expect recurring revenue growth for FY20 to be in the region of 7% to 8%."
Daimler, an automobile group, announced that 2Q net loss widened to 1.91 billion euros from 1.24 billion euros in the prior-year period and EBIT loss increased to 1.68 billion euros from 1.56 billion euros on revenue of 30.18 billion euros, down 29%. Regarding full-year outlook, the company said: "In view of declining unit sales due to the covid-19 pandemic, we assume that Group revenue in full-year 2020 will also be lower than in the previous year. (...) Assuming that the economic recovery continues in the second half of the year and that there is no new significant wave of covid-19 infections in our key sales markets, we expect both Group EBIT and the free cash flow of the industrial business to be positive in 2020, but lower than in the previous year."
Publicis, a advertising and public relations company, posted 1H net income slid 9.9% on year to 417 million euros while EBITDA grew 4.3% to 923 million euros on net revenue of 4.77 billion euros, up 9.7% (-8.0% organic growth).
Pernod Ricard, an alcoholic beverages producer, said it has lifted its full-year profit from recurring operations forecast to -15% from -20% previous estimated in March, citing "strong cost mitigation".
From a chartist point of view, the share price is supported by a rising trend line since March despite the short term consolidation area. The stock price is testing the upper Bollinger band and the upper end of its short term trading range. The 50DMA is still playing a support role. Moreover, The RSI bounced off a former internal trendline in place since January's 2020 highs. Above 136.6E, the bias remains bullish. A breakout confirmation of the consolidation range would open a path to see 155.15E and 161.95E in extension. Alternatively, a break below the consolidation area at 136.60 would call a new down move towards 125.7E.
Source: GAIN Capital, TradingView
Dassault Systemes, a software developer, reported that 2Q adjusted EPS fell 2% on year to 0.80 euro while revenue grew 11% (+10% in constant currencies) to 1.07 billion euros. The company confirmed its full-year adjusted EPS guidance of 3.70 - 3.75 euros.
Ubisoft, a video game company, posted 1Q revenue increased 17.6% on year (+16.6% at constant exchange rates) to 427 million euros and net bookings rose 30.5% (+29.3% at constant exchange rates) to 410 million euros. The company confirmed its full-year targets of adjusted operating income of between 400 - 600 million euros and net bookings of between 2.35 - 2.65 billion euros.
Ingenico, an electronic transactions technology company, reported that 1H net income grew 9% on year to 87 million euros and EBITDA climbed 10% to 278 million euros on net revenue of 1.24 billion euros, down 9% (-8% on a comparable basis). The company confirmed its full-year net revenue guidance of "a mid to high single digit organic decline".
Worldline, a payment and transactional services provider, announced that 2Q net income declined 62.5% on year to 53 million euros on revenue of 1.09 billion euros, down 5.7%.
Cellnex Telecom, a Spanish wireless telecommunications and broadcasting infrastructures operator, announced plans to raise 4 billion euros through issuing 101.4 million shares at 39.45 euros per share. The company said the capital increase is aimed at financing potential new acquisitions.
Repsol, a fossil fuel company, reported 2Q adjusted net loss of 258 million euros, citing a 1.29 billion impairment in the upstream business, and CCS EBITDA declined 65% on year to 641 million euros.
STMicroelectronics, a semiconductor manufacturer, posted 2Q net income declined 43.7% on year to 90 million dollars and operating income sank 45.8% to 106 million dollars on net revenue of 2.09 billion dollars, down 4.0%. The company said: "Looking at the third quarter, we expect sequential revenue growth of 17.4% at the mid-point. (...) We will drive the Company based on an updated plan for FY20 net revenues between $9.25 billion and $9.65 billion with growth in the second half over the first half to be in the range of $610 million to $1.01 billion."
Roche, a multinational healthcare company, announced that 1H net income dropped 5% on year to 8.47 billion Swiss franc and core EPS was down 6% to 10.44 Swiss franc. Also, core operating profit fell 5% to 11.77 billion Swiss franc on revenue of 29.28 billion Swiss franc, down 4% (+1% at constant exchange rates). Regarding full-year outlook, the company said: "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."
Sika, a specialty chemical company, reported that 1H net income slid 16.0% on year to 275 million Swiss franc and operating profit declined 14.8% to 410 million Swiss franc on net sales of 3.61 billion Swiss franc, down 3.2%.
Epiroc, a Swedish manufacturer of mining and infrastructure equipment, announced that 2Q net income slid 38.9% on year to 1.03 billion Swedish krona and operating profit declined 37.3% to 1.42 billion Swedish krona on revenue of 8.46 billion Swedish krona, down 20.4%.
Neste, a Finnish oil refining and marketing company, is expected to report 2Q results.
UPM-Kymmene, a Finnish forest industry company, is expected to release 2Q results.
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