EU indices try to rebound | TA on Volvo


European stocks report | Rio Tinto | LVMH | Nestle | Volvo...

Stocks (3)

Yesterday, European stocks remained under pressure. The Stoxx Europe 600 Index slumped 2.08%, Germany's DAX 30 shed 2.49%, France's CAC 40 sank 2.11%, and the U.K.'s FTSE 100 was down 1.73%.

92% of STOXX 600 constituents traded lower or unchanged yesterday.
53% of the shares trade above their 20D MA vs 72% Wednesday (above the 20D moving average).
58% of the shares trade above their 200D MA vs 62% Wednesday (above the 20D moving average).

The Euro Stoxx 50 Volatility index added 3.6pts to 26.84, a new 52w high.

3mths relative high: Industrial
3mths relative low: Insurance

Europe Best 3 sectors
real estate, travel & leisure, banks

Europe worst 3 sectors
energy, insurance, utilities

The 10yr Bund yield fell 2bps to -0.58% (below its 20D MA). The 2yr-10yr yield spread rose 1bp to -16bps (above its 20D MA).

EC 10:00: Aug Balance of Trade, exp.: E27.9B
EC 10:00: Sep Core Inflation Rate YoY final, exp.: 0.4%
EC 10:00: Sep Inflation Rate MoM final, exp.: -0.4%
EC 10:00: Sep Inflation Rate YoY final, exp.: -0.2%

In Asian trading hours, EUR/USD remained subdued at 1.1703 and GBP/USD extended its decline to 1.2888. USD/JPY retreated to 105.26.

Spot gold slipped to $1,906 an ounce.

Rio Tinto, a giant metals miner, released a 3Q production report: "Pilbara operations produced 86.4 million tonnes (Rio Tinto share 71.4 million tonnes) in the third quarter of 2020, 1% lower than the same period of 2019, and 4% higher than the previous quarter. (...) Third quarter shipments of 82.1 million tonnes (Rio Tinto share 67.6 million tonnes) were 5% lower than the third quarter of 2019 with significant planned maintenance activity affecting the port during the period."

J D Wetherspoon, a pub company, posted full-year results: "Total sales in the financial year were £1,262.0m, a decrease of 30.6%. Like-for-like sales decreased by 29.5%, having increased by 5.9% in the first half. (...) Earnings per share, including shares held in trust by the employee share scheme, before exceptional items, were -27.6p (2019: 75.5p). (...) The board is not proposing a final dividend payment for the year."

LVMH, a luxury goods conglomerate, announced that 3Q revenue dropped 10% on year (-7% organic growth) to 11.96 billion euros and 9-month revenue was down 21% (-21% organic growth) to 30.35 billion euros. The company said 3Q sales reflected "a marked improvement in trends compared to the first half, notably a return to growth in Cognac and Fashion & Leather Goods (+12% organic growth)". It also added that "the decision to pay an interim dividend will be discussed".

Eurofins Scientific, a bioanalytical testing company, announced a ten-for-one stock split, effective upon the listing on Euronext Paris of the new shares expected to occur on November 19.

Saint-Gobain, a building materials supplier, was downgraded to "neutral" from "buy" at Goldman Sachs.

Just Eat Takeaway, an online food order and delivery service provider, was upgraded to "buy" from "hold" at HSBC.

Nestle, a food and drink processing conglomerate, has initiated the sale process for its 5 billion dollars North American water brands, reported Bloomberg citing people familiar with the matter.

Volvo, a vehicle manufacturer, announced that 3Q net income declined 23% on year to 5.72 billion Swedish krona and adjusted operating income dropped 34% to 7.22 billion Swedish krona on net sales of 76.85 billion Swedish krona, down 22% (-16% currency adjusted). The company said: "Towards the end of the quarter transport activity was back on roughly the same level as a year ago in most markets. This led to an improved sentiment among our customers, which is reflected in increased order intake for trucks, engines and construction equipment as well as a gradually improving service business."
From a daily point of view, the stock is trading above a rising trend line drawn since March 2020. Furthermore, the 50 DMA is playing a support role, while the Relative Strenght Index is carried by the key support at 45%. Above 165SEK, targets are set at 195SEK and 210SEK in extension.

Source: TradingView, GAIN Capital

More from Equities


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit for the complete Risk Disclosure Statement.