Yesterday, European stocks were broadly lower. The Stoxx Europe 600 Index sank 1.3%, Germany's DAX 30 lost 0.7% and France's CAC 40 slid 1.1%, while the U.K.'s FTSE 100 was closed for a holiday.
76% of STOXX 600 constituents traded lower or unchanged yesterday.
48% of the shares trade above their 20D MA vs 57% Friday (below the 20D moving average).
54% of the shares trade above their 200D MA vs 53% Friday (above the 20D moving average).
The Euro Stoxx 50 Volatility index added 1.56pt to 26.72, a new 52w high.
SECTORS vs STOXX 600
3mths relative high: Chemicals, Autos
3mths relative low: Telecom
Europe Best 3 sectors
utilities, basic resources, health care
Europe worst 3 sectors
banks, insurance, construction & materials
The 10yr Bund yield was unchanged to -0.41% (above its 20D MA). The 2yr-10yr yield spread rose 0bp to -25bps (below its 20D MA).
GE 07:00: Jul Unemployment Rate Harmonised, exp.: 4.2%
FR 08:50: Aug Markit Manufacturing PMI final, exp.: 52.4
GE 08:55: Aug Unemployment Rate, exp.: 6.4%
GE 08:55: Aug Unemployment chg, exp.: -18K
GE 08:55: Aug Markit Manufacturing PMI final, exp.: 51
EC 09:00: Aug Markit Manufacturing PMI final, exp.: 51.8
UK 09:30: Jul Net Lending to Individuals MoM, exp.: £1.8B
UK 09:30: Jul BoE Consumer Credit, exp.: £-0.086B
UK 09:30: Jul Mortgage Approvals, exp.: 40K
UK 09:30: Jul Mortgage Lending, exp.: £1.9B
UK 09:30: Aug Markit/CIPS Manufacturing PMI final, exp.: 53.3
EC 10:00: Aug Core Inflation Rate YoY Flash, exp.: 1.2%
EC 10:00: Aug Inflation Rate YoY Flash, exp.: 0.4%
EC 10:00: Jul Unemployment Rate, exp.: 7.8%
EC 10:00: Aug Inflation Rate MoM Flash, exp.: -0.4%
FR 10:00: Aug New Car Registrations YoY, exp.: 3.9%
In Asian trading hours, the U.S. dollar weakened further, as EUR/USD extended its rally to 1.1971 and GBP/USD rose to 1.3394. USD/JPY retreated to 105.67. This morning, official data showed that Japan's industrial production grew 8.0% on month in July (+5.0% expected), while retail sales slid 3.3% (-2.5% expected), AUD/USD climbed to 0.7396 as the Reserve Bank of Australia held its rates unchanged, as expected. Data released earlier today showed that China's Caixin Manufacturing PMI rose to 53.1 in August (52.5 expected), the highest level since January 2011.
Spot gold advanced to $1,980 an ounce.
#UK - IRELAND#
Dunelm Group, a homewares retailer, posted a trading update: "Sales have been strong in the last two months, with total year over year sales growth up 59% in July, partly as a result of pent up demand following the store closure period and the timing of our Summer Sale, and up 24% in August."
From a technical point of view, the share price is supported by a rising trend line drawn since March. Furthermore, the 20 and 50 DMAs are playing the role of support below the stock. A breakout confirmation of the previous all-time high at 1450p would trigger the possibility of a new up leg towards 1540p and 1655p in extension. Alternatively, a break below 1340p would call for a reversal trend with targets set at 1260p and 1130p in extension.
Source: TradingView, GAIN Capital
Bayer, a pharmaceutical giant, has agreed to acquire a 70% stake in Care/of, an online vitamin and health supplement company based in New York, in a transaction that values the company at 225 million dollars, reported Bloomberg citing people familiar with the matter.
Zalando, an e-commerce company, was upgraded to "buy" from "neutral" at Goldman Sachs.
Deutsche Wohnen, a property group, was downgraded to "sell" from "neutral" at Goldman Sachs.
Engie, an electric utility company, would reject the offer made by Veolia for its 29.9 stake in Suez, as the company is seeking for a higher bid, reported Bloomberg citing people familiar with the matter.
Suez, an utility company, said Veolia's acquisition offer "carries great uncertainties", and "the Board of Directors unanimously reiterated its full confidence in SUEZ's strategic project that will create significant value for SUEZ as an independent company".
Sanofi, a drug maker, reported that the global phase 3 trial investigating intravenously administered Kevzara (sarilumab) at a dose of 200 mg or 400 mg in severely or critically ill patients hospitalized with COVID-19 did not meet its primary endpoint and key secondary endpoint.
Inditex, a Spanish multinational clothing company, was downgraded to "neutral" from "buy" at Goldman Sachs.
Telecom Italia, an Italian telecommunications group, announced that it has accepted the binding offer of 1.8 billion euros from KKR Infrastructure, which will buy 37.5% of FiberCop. FiberCop is a newly established network company to which Telecom Italia's secondary network will be transferred along with the fibre network.
Davide Campari-Milano, a beverage company, was upgraded to "overweight" from "underweight" at JPMorgan.
Novartis, a pharmaceutical group, was upgraded to "overweight" from "equalweight" at Morgan Stanley.
Wolters Kluwer: E0.47
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.