Yesterday, European stocks were broadly lower. The Stoxx Europe 600 Index fell 0.84%. Germany's DAX 30 dropped 0.80%, France's CAC 40 lost 0.96%, while the U.K.'s FTSE 100 was little changed.
66% of STOXX 600 constituents traded lower or unchanged yesterday.
64% of the shares trade above their 20D MA vs 68% Monday (above the 20D moving average).
48% of the shares trade above their 200D MA vs 46% Monday (above the 20D moving average).
The Euro Stoxx 50 Volatility index added 1.79pt to 28.93, a new 52w high.
SECTORS vs STOXX 600
3mths relative high: Chemicals
3mths relative low: Retail, Media
Europe Best 3 sectors
telecommunications, insurance, energy
Europe worst 3 sectors
travel & leisure, technology, media
The 10yr Bund yield rose 5bps to -0.42% (above its 20D MA). The 2yr-10yr yield spread rose 2bps to -22bps (above its 20D MA).
UK 07:00: Jun PPI Core Output MoM, exp.: 0%
UK 07:00: Jun PPI Core Output YoY, exp.: 0.6%
UK 07:00: Jun PPI Input YoY, exp.: -10%
UK 07:00: Jun PPI Input MoM, exp.: 0.3%
UK 07:00: Jun PPI Output YoY, exp.: -1.4%
UK 07:00: Jun PPI Output MoM, exp.: -0.3%
UK 07:00: Jun Inflation Rate MoM, exp.: 0%
UK 07:00: Jun Core Inflation Rate YoY, exp.: 1.2%
UK 07:00: Jun Inflation Rate YoY, exp.: 0.5%
UK 07:00: Jun Core Inflation Rate MoM, exp.: 0%
UK 07:00: Jun Retail Price Idx YoY, exp.: 1%
UK 07:00: Jun Retail Price Idx MoM, exp.: -0.1%
GE 09:00: Bundesbank Beermann speech
UK 09:00: BoE Tenreyro speech
GE 10:40: 10-Year Bund auction, exp.: -0.38%
In Asian trading hours, EUR/USD held gains at 1.1409 while GBP/USD edged up to 1.2581. USD/JPY was flat at 107.25 ahead of Bank of Japan's interest rates decision.
Spot gold was little changed at $1,809 an ounce.
#UK - IRELAND#
Severn Trent, a water company, posted a trading update for the period to July 15: "We have not yet seen evidence that would change our initial estimates for the impact of COVID-19. We continue to guide a £50 - £85 million negative impact to 2020/21 revenue, and the Ofwat regulatory model allows this to be recovered in 2022/23."
GlaxoSmithKline, a pharmaceutical group, said "the US Food and Drug Administration (FDA) Oncologic Drugs Advisory Committee (ODAC) voted 12-0 in favour of the demonstrated benefit of monotherapy treatment with belantamab mafodotin outweighing the risks for patients with relapsed or refractory multiple myeloma".
Dixons Carphone, a electrical and telecommunications retailer, reported that full-year adjusted profit before tax dropped 51% on year to 166 million pounds, 44 million pounds below its guidance provided in January, citing Covid-19 impacts. Also, revenue was down 3% (-1% at local currency) to 10.17 billion pounds.
Dunelm Group, a homewares retailer, issued a 4Q trading statement: "As previously reported, total sales for the 10 weeks to 7 March grew by 7.9%. Total sales for the last 16 weeks (from 8 March to 27 June) declined by 29.0%, with store like for like ("LFL") sales down 49.7% and online growth of 85.2%. (...) Full year FY20 sales were £1,057.9m, a 3.9% reduction on the prior year (FY19: £1,100.4m). We expect that our FY20 PBT2 will be in the range of £105m-£110m (FY19: £125.9m)."
Continental, an automotive parts manufacturer, plans to close its Rubi plant in Spain by the end of 2021 and the Nogales site in Mexico by 2024, which may affect 20,000 jobs worldwide, reported Bloomberg citing a statement from the company.
AXA, an insurance group, was downgraded to "sell" from "neutral" at Citigroup.
ASML Holding, a semiconductor equipment supplier, announced that 2Q net income jumped 57.8% on year to 751 million euros on net sales of 3.33 billion euros, up 29.5%. Regarding the outlook, the company said: "We expect Q3 revenue between E3.6 billion and E3.8 billion with a gross margin between 47% and 48%, (...) Our 2020 growth expectations are largely unchanged relative to our view at the start of the year." From a chartist point of view, the share remains within a bullish channel since March. The stock price is trading above its 20 and 50DMAs. Moreover, the RSI reversed down from its overbought area and is challenging a rising trend line in place since April. Investors have to remain cautious as these levels may trigger profit taking. Above 318.15E, the bias remains bullish. Next bullish targets are set at 366.75E and 380E in extension. Alternatively, a push below 318.15E would call for a reversal down trend towards 297.95E and 268E.
Source: GAIN Capital, TradingView
Temenos, an enterprise software developer, is expected to report 2Q results.
SEB, a Swedish financial group, reported that 2Q net income dropped 28% on year to 3.50 Swedish krona while operating income increased 15% to 14.00 billion Swedish krona on net interest income of 6.05 billion Swedish krona, up 6%.
Svenska Handelsbanken, a Swedish bank, announced that 2Q net income slid 6% on year to 3.96 billion Swedish krona and operating profit fell 6% to 5.05 billion Swedish krona on net interest income of 7.62 billion Swedish krona, down 5%.
Tele2, a telecommunications group, posted 2Q net income declined 58% on year to 895 million Swedish krona while underlying EBITDAaL grew 4% to 2.27 billion Swedish krona on revenue of 6.65 billion Swedish krona, down 2%. The company said: "With more certainty in our ability to defend underlying EBITDAaL this year and return to growth next year, the Board has decided to bring back its proposal to distribute an extraordinary dividend of SEK 3.50 per share this year."
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