EU indices mixed | TA focus on BT Group


European stocks report | Experian | DS Smith | JD Sports Fashion | Royal Mail...

Trading floor 1

Yesterday, European stocks were broadly higher. The Stoxx Europe 600 Index rose 1.6%, Germany's DAX 30 surged 2.0%, France's CAC 40 climbed 1.8% and U.K.'s FTSE 100 jumped 2.4%.

91% of STOXX 600 constituents traded higher yesterday.
48% of the shares trade above their 20D MA vs 29% Friday (below the 20D moving average).
54% of the shares trade above their 200D MA vs 50% Friday (below the 20D moving average).

The Euro Stoxx 50 Volatility index eased 3.79pts to 27.92, a new 52w high.

3mths relative high: Chemicals, Autos, Industrial
3mths relative low: none

Europe Best 3 sectors
banks, basic resources, automobiles & parts

Europe worst 3 sectors
real estate, technology, utilities

The 10yr Bund yield rose 2bps to -0.47% (below its 20D MA). The 2yr-10yr yield spread fell 1bp to -24bps (below its 20D MA).

FR 06:30: Q2 Private Non Farm Payrolls QoQ final, exp.: -2.5%
FR 06:30: Q2 Non Farm Payrolls QoQ, exp.: -2%
GE 07:00: Jul Current Account, exp.: E22.4B
GE 07:00: Jul Imports MoM s.a, exp.: 7%
GE 07:00: Jul Exports MoM s.a, exp.: 14.9%
GE 07:00: Jul Balance of Trade s.a, exp.: E14.5B
GE 07:00: Jul Balance of Trade, exp.: E15.6B
FR 07:45: Jul Current Account, exp.: E-8.4B
FR 07:45: Jul Balance of Trade, exp.: E-8B
EC 10:00: Q2 GDP Growth Rate QoQ 3rd Est, exp.: -3.6%
EC 10:00: Q2 GDP Growth Rate YoY 3rd Est, exp.: -3.1%
EC 10:00: Q2 Employment chg QoQ final, exp.: -0.2%
EC 10:00: Q2 Employment chg YoY final, exp.: 0.4%


In Asian trading hours, EUR/USD dropped further to 1.1805 while GBP/USD extended its decline to 1.3148. USD/JPY was little changed at 106.28. This morning, government data showed that Japan's final readings of 2Q annualized GDP was confirmed at -28.1% on quarter (-28.5% expected), while household spending declined 7.6% on year in July (-3.7% expected).

Spot gold slid to $1,926 an ounce.

Experian, a global information services company, published a trading update: "In July 2020, we stated that we expected organic revenue for Q2 FY21 would be in the range of flat to (5)% and that organic costs for the first half would be held broadly flat. Following stronger trading in July and August, we today revise our Q2 FY21 expectations. We now expect Group organic revenue growth for the quarter to be in the range +3 to +5%."

DS Smith, a packaging business, released full-year trading statement: "The business has progressed well in the period with performance continuing in line with our expectations, despite the macro-economic challenges that resulted from Covid-19. Our like for like corrugated box volume performance has improved over the period since the initial impact of Covid-19 and in August we have seen a return to positive growth vs August 2019. (...) Given the performance over the last quarter, and our improved clarity in the outlook, combined with a strong financial position the Board intends to declare an interim dividend for the half year to 31 October 2020." 

JD Sports Fashion, a sports-fashion retail company, reported 1H results: "Total revenue decreased by 6.5% in the period to £2,544.9 million (2019: £2,721.2 million). (...) Profit before tax and exceptional items decreased by £96.7 million to £61.9 million (2019: £158.6 million). (...) The adjusted earnings per ordinary share decreased to 6.09p (2019: 12.57p). (...) Given the uncertain impact that COVID-19 may have on the peak trading period ahead, the Board continues to believe that it is in the best interests of shareholders if the Group maintains its cash reserves. Accordingly, it does not believe that it is appropriate to pay an interim dividend (2019: 0.28p)."

Royal Mail, a postal service and courier company, issued a trading statement covering the five months to August: "Royal Mail Parcel volumes up 34% (177 million more parcels) and revenue up 33.1% year on year. (...) Total revenue up £139 million. (...) In both GLS and Royal Mail, parcel revenues are significantly ahead of our expectations pre-COVID, but while this has increased profits in GLS, it has not halted the long term decline in Royal Mail profitability. We continue to expect Royal Mail to make a material loss this financial year 2020-21 and will not become profitable without substantial business change."

BT Group, a telecommunications group, was upgraded to "overweight" from "equalweight" at Barclays.
From a monthly point of view, the share remains stuck within a declining channel since 2016. Below 176.2p targets are set at the previous all-time low at 70.2p and 30p in extension.

Source: GAIN Capital, TradingView

GVC Holdings, a sports betting and gambling company, was downgraded to "equalweight" from "overweight" at Barclays.

Flutter Entertainment, a bookmaking company, was upgraded to "overweight" from "equalweight" at Barclays.

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