EU indices down again | TA focus on Telecom Italia

European stocks report | Auto Trader Group | Deutsche Lufthansa | Telecom Italia...

Downtrend 6

INDICES
Yesterday, European stocks were heavy on Wednesday. The Stoxx Europe 600 Index sank 2.8%, Germany's DAX 30 fell 3.4%, France's CAC 40 dropped 2.9%, and the U.K.'s FTSE 100 was down 3.1%.

EUROPE ADVANCE/DECLINE
96% of STOXX 600 constituents traded lower or unchanged yesterday.
29% of the shares trade above their 20D MA vs 63% Tuesday (below the 20D moving average).
39% of the shares trade above their 200D MA vs 46% Tuesday (above the 20D moving average).

The Euro Stoxx 50 Volatility index added 5.47pts to 36.81, a new 52w high.

SECTORS vs STOXX 600
3mths relative high: Technology
3mths relative low: none

Europe Best 3 sectors
telecommunications, personal & household goods, retail

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


INTEREST RATE
The 10yr Bund yield rose 3bps to -0.41% (below its 20D MA). The 2yr-10yr yield spread rose 2bps to -23bps (above its 20D MA).

ECONOMIC DATA
GE 07:00: Jul GfK Consumer Confidence, exp.: -18.9
EC 09:00: ECB General Council Meeting
FR 11:00: May Jobseekers Total, exp.: 4315.7K
FR 11:00: May Unemployment Benefit Claims, exp.: 827.1K
UK 11:00: Jun CBI Distributive Trades, exp.: -50
EC 12:30: ECB Monetary Policy Meeting Accounts
EC 13:30: ECB Schnabel speech
EC 14:30: ECB Mersch speech

MORNING TRADING
In Asian trading hours, EUR/USD was little changed at 1.1252 and GBP/USD edged up to 1.2424. USD/JPY held above 107.00 level. NZD/USD rebounded slightly to 0.6418. This morning, official data showed that New Zealand recorded a trade surplus of 1.25 billion New Zealand dollars in May (1.29 billion New Zealand dollars expected), where exports totaled 5.39 billion New Zealand dollars (5.40 billion New Zealand dollars expected). 

Spot gold bounced to $1,763 an ounce.


#UK - IRELAND#
Auto Trader Group, a digital automotive marketplace, posted full-year results: "In a tough market, we achieved good revenue growth in the year, increasing by 4% to £368.9m (2019: £355.1m). (...) Operating profit grew 6% to £258.9m (2019: £243.7m) in the year. Operating profit margin increased by one percentage point to 70% (2019: 69%). (...) Basic earnings per share rose by 6% to 22.19 pence (2019: 21.00 pence). (...) As anticipated, no final dividend proposed given the current uncertainties surrounding the COVID-19 pandemic (2019: 4.6 pence per share). Total dividend for the year is therefore 2.4 pence per share (2019: 6.7 pence per share)."

BAE Systems, a defence and aerospace company, released a 1H trading update: "Sales for the half year are expected to be broadly stable year on year whilst half year profit is expected be c.15% lower than last year primarily due to cost under recoveries in the period, significantly reduced volumes in higher margin commercial work and the sales mix year on year. As we return towards full operational tempo we expect the business performance in the second half to be much stronger than in the first half, assuming no new significant COVID-19 related disruptions."

London Stock Exchange, a stock market operator, announced the appointment of Anna Manz, currently CFO of Johnson Matthey, as new CFO with effect from November 21.

AstraZeneca, a pharmaceutical group, said a phase 3 trial of its triple-combination therapy Breztri Aerosphere, for the treatment in patients with moderate to very severe chronic obstructive pulmonary disease, has met the secondary endpoint.

Royal Mail, a postal service and courier company, reported full-year results: "Group revenue increased by £259 million, or £396 million after adjusting for the 53rd week in 2018-19. (...) Group operating profit before specific items decreased by £124 million (to £217 million). (...) Basic earnings per share decreased to 16.1 pence (from 17.5 pence in the prior year). (...) Dividend per share of 7.5p reflects Board decision not to recommend final dividend for 2019-20 (25.0p last year)."

Derwent London and Great Portland Estates, the two property groups, were upgraded to "hold" from "reduce" at HSBC.


#GERMANY#
Deutsche Lufthansa's, an airline group, largest shareholder Heinz Hermann Thiele will support the company's 9 billion euros government bailout, according to German newspaper Frankfurter Allgemeine Zeitung.

Fraport, an airport operator, was downgraded "underweight" from "equalweight" at Barclays.


#FRANCE#
Total's , an oil giant, CEO Patrick Pouyanne said oil refining margins are "catastrophic" and oil and refined products' stockpiles are "extremely high", according to Bloomberg.


#ITALY#
Telecom Italia, a telecommunications company, announced that it has reached an agreement to sell a minority stake of around 18% of its wireless tower unit Inwit to a consortium led by private equity firm Adrian for 1.6 billion euros. From a chartist point of view, the break below 0.433 - support since the beggining of 2019 - has given a strong negative signal reinforced by the bearish gap in March 2020. Below 0.433, look for 0.25 & 0.2.


Source: GAIN Capital, TradingView

Fiat Chrysler Automobiles', a vehicle manufacturer, 6.3 billion euros state-backed loan was approved, according to Italy's finance ministry.


EX-DIVIDEND
Experian: $0.325

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