EU indices strongly down | TA focus on Just Eat Takeaway

European stocks report | Johnson Matthey | Unilever | Airbus | Just Eat Takeaway...

Downtrend 5

Yesterday, European stocks still lacked upward momentum, with the Stoxx Europe 600 Index slipping 0.4%. Germany's DAX 30 fell 0.7%, France's CAC 40 dropped 0.8%, and the U.K.'s FTSE 100 edged down 0.1%.

66% of STOXX 600 constituents traded lower or unchanged yesterday.
88% of the shares trade above their 20D MA vs 86% Tuesday (above the 20D moving average).
42% of the shares trade above their 200D MA vs 45% Tuesday (above the 20D moving average).

The Euro Stoxx 50 Volatility index added 0.31pt to 30.05, a new 52w high.


3mths relative high: Basic Resources

3mths relative low: none

Europe Best 3 sectors
personal & household goods, health care, basic resources

Europe worst 3 sectors
travel & leisure, energy, automobiles & parts

The 10yr Bund yield rose 1bp to -0.31% (above its 20D MA). The 2yr-10yr yield spread rose 2bps to -28bps (below its 20D MA).

FR 06:30: Q1 Non Farm Payrolls QoQ, exp.: 0.4%
FR 06:30: Q1 Private Non Farm Payrolls QoQ final, exp.: 0.4%
EC 09:00: Eurogroup Video Conference

In Asian trading hours, EUR/USD edged up to 1.1387 while GBP/USD slipped to 1.2740. USD/JPY rebounded to 107.00.

Spot gold eased to $1,732 an ounce.

Johnson Matthey, a speciality chemicals company, announced full-year profit before tax declined 38% on year to 305 million pounds and operating profit sank 27% to 388 million pounds, citing a restructuring and impairment charge of 140 million pounds and 60 million pounds impact related to COVID-19. Meanwhile, revenue increased 36% to 14.58 billion pounds. The company proposed a final dividend of 31.125p per share, down 50% from the prior year, and full-year dividend amounted to 55.625p per share, down 35% from the previous year.

Unilever, a consumer goods company, announced plans to unify its group legal structure under a single parent company, Unilever PLC. The company said: "After a comprehensive review over the last 18 months, the Board continues to believe that moving from the current dual-headed legal structure to a single parent company will bring significant benefits by: Increasing Unilever's strategic flexibility for portfolio evolution, including through equity-based acquisitions or demergers. (...) Removing complexity and further strengthening Unilever's corporate governance, (...) This will be implemented through a cross-border merger between Unilever PLC and Unilever NV.  Unilever NV shareholders will receive one new Unilever PLC share in exchange for each Unilever NV share held."

Ocado, an online grocery retailer, announced plans to raise 1 billion pounds through 650 million pounds of new shares placing and 350 million pounds of convertible bonds offering. The company it will provide the company with "the financial flexibility to capitalise on opportunities arising from the significant acceleration in online adoption and grow faster over the medium term".

Babcock International, an engineering services provider, released full-year results: "Statutory revenue was £4,449.5 million (2019: £4,474.8 million). (...) Statutory operating loss was £(164.9) million (2019 profit: £196.5 million) and statutory loss before tax was £(178.2) million (2019 profit: £235.2 million), reflecting higher exceptional charges in the current year compared to the prior year. Basic earnings per share, as defined by IAS 33, was (38.6) pence (2019: 39.5 pence) per share."

B&M European Value Retail, a retailer, posted full-year results: "Group revenues increased by 16.5% to £3,813.4m (FY19: £3,272.6). (...) Group profit before tax increased by 3.2% to £252.0m for the 52 week period (FY19: £244.3m), diluted earnings per share 19.5p (FY19:19.5p). (...) Recommended final dividend7 increased to 5.4p per share (FY19: 4.9p) to be paid on 28 September 2020, bringing full year ordinary dividend to 8.1p per share being an increase of 6.6%."

Grafton Group, a building materials distributor, issued a trading update: "Group revenue in continuing operations was down 26 per cent to £810.9 million in the five months to 31 May 2020 from £1.09 billion in the same period last year due to the impact of the Covid-19 pandemic. (...) Although Group revenue in May was down 38 per cent on the prior year, this marked a significant recovery in activity and also reflected the high proportion of branches in the UK and Ireland that traded for only the latter part of the month."

Airbus, an aircraft manufacturer, will keep jet production at current levels for the near term, after a decision in April to cut one-third of monthly output, according to Bloomberg.

Soitec, a semiconductor materials manufacturer, reported that full-year net income rose 22% on year to 110 million euros and operating income increased 10% to 120 million euros on revenue of 598 million euros, up 35% (+28% at constant exchange rates and perimeter). The company said full year 2021 revenue is expected to be stable, while full year 2022 revenue forecast was lowered to 800 million euros from 900 million euros previously. 

Just Eat Takeaway, online food order and delivery service provider, announced the acquisition of Grubhub, an U.S. food ordering and delivery marketplace, in an all-stock transaction. The company stated: "Under the terms of the Transaction, Grubhub shareholders will be entitled to receive American depositary receipts (ADRs) representing 0.6710 Just Eat ordinary shares in exchange for each Grubhub share, (...) Immediately following completion of the Transaction, Grubhub shareholders are expected to own ADRs representing approximately 30.0% of the Combined Group (on a fully diluted basis)."

From a chartist point of view, the technical picture is neutral, trading within a symmetrical formation.

Source: GAIN Capital, TradingView

Generali, an insurance group, is reviewing strategic options for its Swiss insurance unit, which may be valued at 1 - 2 billion euros, reported Bloomberg citing people familiar with the matter.

Telecom Italia, a telecommunication group, was downgraded to "neutral" from "overweight" at JPMorgan.

Nokia, a telecommunications and consumer electronics company, announced that Marco Wiren, currently president of Wartsila Energy, will succeed Kristian Pullola as CFO on September 1.

3I Group:17.5p, EssilorLuxottica: E2.23, Vodafone: E0.045, WPP Group:37.3p

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