>>> TradeGate Pre-Market Indications

DAX:
  • Wirecard (WDI TH) +3.8%
    • Activist Hohn Calls on Wirecard to Remove CEO Markus Braun
  • HeidelbergCement (HEI TH) +1.4%
  • MTU Aero (MTX TH) +1.2%
  • Deutsche Telekom (DTE TH) +1%
    • Deutsche Telekom Raised to Equal-Weight at Barclays
  • Covestro (1COV TH) +1%
    • Covestro Maintains Full Year Ebitda EU700 Mln to EU1.2 Bln
  • BASF (BAS TH) +0.2%
  • Fresenius SE (FRE TH) +0.2%
    • Teva Wins Ruling on Patents for Bendeka Cancer Drug (2)
  • E.On (EOAN TH) +0.1%
  • Deutsche Bank (DBK TH) +0.1%
    • Deutsche Bank’s Cost Cuts Proceed Better Than Expected: TOPLive
  • Bayer (BAYN TH) -3.4%
    • Bayer CEO Wins Investor Backing as Roundup Talks Drag On
MDAX:
  • HelloFresh (HFG TH) +3.4%
  • Aareal Bank (ARL TH) +2.2%
  • Hugo Boss (BOSS TH) +1.4%
  • Metro AG (B4B TH) +1.4%
  • ProSieben (PSM TH) +1.3%
    • ProSieben Raised to Outperform at Exane; PT 12 euros
  • K+S (SDF TH) -0.5%
  • Siltronic (WAF TH) -0.6%
  • Alstria Office (AOX TH) -0.7%
  • Fuchs Petrolub (FPE3 TH) -1.1%
  • Hochtief (HOT TH) -5.2%
SDAX:
  • Ceconomy (MEO TH) +2.5%
  • Borussia Dortmund (BVB TH) +2.2%
  • Aixtron (AIXA TH) +2%
    • Aixtron Conference Call Scheduled By Liberum for May 6
  • Kloeckner (KCO TH) +1.5%
  • Steinhoff (SNH TH) +1.4%
  • SAF-Holland SE (SFQ TH) +0.5%
  • Vossloh (VOS TH) +0.4%
  • DIC Asset (DIC TH) +0.3%
  • LPKF (LPK TH) Flat
  • Nordex (NDX1 TH) -0.5%

>>> What to look at today - 29th of April 2020

Stocks in Asia climbed with U.S. equity futures as earnings continued to roll in. The dollar extended this week’s declines.
Shares in Hong Kong, Shanghai and Sydney rose. Equities advanced in Seoul despite a warning from Samsung Electronics Co. that profit may fall in the second quarter as the pandemic hits demand. Wednesday’s gains pushed Asia-Pacific stocks up 20% from recent lows, set to join global peers in a bull market. Nasdaq futures climbed about 1.5% after Alphabet Inc. reported better-than-estimated sales. U.S. equities saw a volatile session Tuesday with megacap tech stocks retreating amid a slide in consumer confidence and as more companies withdrew earnings guidance. Japan is shut for a holiday and Treasuries won’t trade until the London open. Oil advanced.
US After Hours GOOG +8% up nicely on earnings; IRBT -10.5%, FEYE -4.9%, F -4.8% are down on earnings

Nikkei -0.06% Hang Seng +0.08% CSI +0.12% Shanghai +0.18% Shenzen -0.21%

Eur$ 1.0850 CNH 7.0806 CNY 7.0763 JPY 106.56 GBP 1.2474 CHF 0.9728 RUB 73.8093 TRY 6.9846 WTI$ 13.51 +9.40%

S&P +0.99% Nasdaq +1.20% EuroStoxx +0.35% FTSE +0.51% Dax +0.34% SMI +0.55%

Macro :
- France’s AMF: No Major Change Required for Activist Holder Laws
- Leveraged ETFs Betting Against Stocks Lure $5.6 Billion in April
- Goldman ‘More Positive’ on Energy Stocks as Bottom Emerges
- World’s Richest Are Waiting for New Dip in Stocks Before Buying
- Germany to Extend Global Travel Warning to Min. June 14: Spiegel

Keep an eye on :
- AENA SM : Aena First Quarter Ebit EU49.6 Mln, -75% Y/y, Est. EU58.5 Mln
- AIR FP : Airbus First Quarter Adjusted Ebit EU281 Mln, -49% Y/y
- AMAST SS : Amasten Fastighets Offering Prices 90m Shares at SEK7.20/Share
- AMS SW : AMS Sees Second Quarter Revenue $440 Mln to $480 Mln
- ATL IM : Atlantia Makes EU1.5b Provision on Autostrade After EU2.9b Offer
- ATL IM : Benettons Offer Italy $3.1 Billion to Settle Genoa Bridge Spat
- BKIA SM : *BANKIA 1Q NET INCOME EU94M
- BGBIO NO : Bergenbio’s Bemcentinib Fast-Tracked in UK Phase II Covid Trial
- BME SM : BME First Quarter Net Income EU34 Mln, +7.6% Y/y
- BRG NO : Borregaard First Quarter Pretax Profit NOK111 Mln, -21% Y/y
- CA FP : Carrefour 1Q Sales Rise 7.8% Like-for-Like
- CNH
- COFB BB ; Cofinimmo Sees FY Adjusted EPS EU6.60 to EU6.85, Saw EU7.10
- 1COV GY : Covestro Maintains Full Year Ebitda EU700 Mln to EU1.2 Bln
- DAI GY : Daimler First Quarter Ebit EU617 Mln, -78% Y/y
- DBK GY : *DEUTSCHE BANK SEES 2020 REVENUE `SLIGHTLY' LOWER
- DIS US : New York Post: Dish demands Disney pay for ESPN refund over no live sports
- DWS GY : DWS 1Q Adjusted Pretax Profit EU179 Mln, Est. EU168.0 Mln, *DWS 1Q NET OUTFLOWS EU2.5B, EST. EU6.4B
- EFGN SW : EFG International Says It Registered Positive Inflows in 1Q
- ELIS FP : Elis Sees Sharp Drop in Activity in 2Q, April Marks ‘Low Point’
- FIE GY : Fielmann First Quarter Pretax Profit EU17.6 Mln
- GN DC : GN 1Q Revenue DKK2.97 Bln Versus DKK2.84 Bln Year Earlier
- HUH1V FH : Huhtamaki Oyj 1Q Adjusted Ebit EU73.6 Mln, +8.6% Y/y
- IAG LN : IAG 1Q Missed Consensus But Liquidity Reassures: Bernstein
- IAG LN : IAG Sees Oper. Loss in 2Q ‘Significantly’ Worse Than in 1Q
- IAG LN : British Airways to Slash Up to 12,000 Jobs After Hedging Losses
- ICA SS : ICA Gruppen 1Q Adjusted Operating Profit SEK1.31 Bln, +16% Y/y
- LI FP : Klepierre 1Q Gross Rental Income Falls 4.5%, Withdraws Guidance
- KRN GY : Krones First Quarter Orders EU841.1 Mln
- LHA GY : Austrian Airlines Denies Report It Needs EU1.2 Billion Aid
- LHA GY : Austria Seeks Vienna Hub Assurances From Lufthansa, Kogler Says
- MELE BB : Melexis First Quarter EPS EU0.51 Vs. EU0.35 Y/y
- NDA SS : Nordea 1Q Net Loan Losses EU154 Mln; NII, Fees Increase (1)
- NHY NO : Norsk Hydro First Quarter Underlying Ebit NOK2.25 Bln
- NAS NO : Norwegian Air CEO Reports ‘Good Progress’ in Debt Talks: E24.no
- OERL SW : Oerlikon Gets Only Negative Call as Baader Cites Huge Sales Drop
- OMV AV : OMV First Quarter Clean CCS Operating Result EU699 Mln
- PNDX SS : Pandox First Quarter Property Mgmt Income SEK672 Mln
- RAL FP : Rallye AGM Postponed To June 26; Hattab To Cut Pay
- REE SM : Red Electrica First Quarter Net Income EU172.6 Mln, -9.6% Y/y
- RCO FP : Remy 4Q Organic Revenue Drops 25%; Sees FY Profit Down 20%
- SCR FP : Scor First Quarter Net Income EU162 Mln
- SK FP : SEB First Quarter Operating Result From Activity EU18 Mln
- SMCP FP : SMCP 1Q Organic Sales Drop 20.4%, China Shows Signs of Recovery
- SPIE FP : Spie First Quarter Ebita EU58.4 Mln
- STR AV : Strabag Sees 2020 Output Volume EU14.4 Bln, Saw Above EU16 Bln
- SAZ GY : German Drugmaker Stada Seals Deal to Sell Cough Syrup in China
- TKA AV : Telekom Austria First Quarter Net Income EU89.3 Mln
- TEP FP : Teleperformance First Quarter Like-for-like Sales +6.2%
- TM17 LN :
- VRLA FP : Verallia 1Q Revenue Rises 1.9%; Sees Double-Digit 2Q Sales Drop
- VOW GY : Volkswagen to Restart Argentina Plant on April 29
- VOW GY : VW Expects to Avoid 2020 Loss Despite Severe Hit From Pandemic
- WDI GY : Activist Hohn Calls on Wirecard to Remove CEO Markus Braun
- WPP LN : WPP Revenue Slumps in March With Advertising Budgets in Freefall
- XXL NO : XXL 1Q Ebitda Loss NOK83 Mln Vs. Profit NOK192 Mln Y/y

>>> Europe : Brokers Upgrades & Downgrades - 29th of April 2020

>>> Up
* ABB Raised to Hold at LBBW; PT 18.50 Swiss francs
* Deutsche Telekom Raised to Equal-Weight at Barclays
* Ocean Yield Raised to Buy at DNB Markets; PT 38 kroner
* ProSieben Raised to Outperform at Exane; PT 12 euros
* Ratos Raised to Hold at ABG; PT 22 kronor
* Stadler Rail Raised to Buy at Citi; PT 50 Swiss francs
* TietoEVRY Raised to Buy at SEB Equities; PT 26 euros

>>> Down
* Centamin Cut to Add at Peel Hunt; PT 170 pence
* Dassault Systemes Cut to Reduce at Baader Helvea; PT 146 euros
* Eramet Cut to Add at AlphaValue
* Morgan Sindall Cut to Add at Peel Hunt; PT 1,500 pence
* Norma Cut to Reduce at HSBC; PT 18 euros
* Oerlikon Cut to Reduce at Baader Helvea; PT 7 Swiss francs
* Skanska Cut to Sell at SEB Equities; PT 165 kronor

>>> Initiation
* Cairn Energy Assumed Hold at Berenberg; PT 130 pence
* Energean Oil & Gas Rated New Buy at Berenberg; PT 910 pence
* Gulf Keystone Petroleum Rated New Buy at Berenberg
* Premier Oil Assumed Hold at Berenberg; PT 30 pence

>>> Call
* Berenberg Starts Coverage of Energean, Gulf Keystone as Buy
* Carrefour Sales Strong But No Drop Through to Profit: Bernstein
* Dassault Systemes Earnings Resilient, But Upside Limited: Baader
* IAG 1Q Missed Consensus But Liquidity Reassures: Bernstein
* U.K. Construction Set For Recovery, But Be Selective: Peel Hunt

>>> US After Hours Summary: GOOG +8% up nicely on earnings; IRBT -

After Hours Summary: GOOG +8% up nicely on earnings; IRBT -10.5%, FEYE -4.9%, F -4.8% are down on earnings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: ACA +18.9%, BXMT +9.2%, BXP +9.2%, MTH +8.7%, WW +8.1%, GOOG +8%, ENVA +6.8%, MASI +5.9%, DXCM +5.7%, HELE +4.8%, LSCC +3.9%, SIMO +3.7%, YUMC +3.5%, KBR +3.2%, MKSI +2.3%, OI +1.5%, CRSP +1.2%, AGR +0.8%, WIRE +0.8%, CHE +0.6%, CSGP +0.4%, MEDP +0.4%, MRC +0.2%

Companies trading higher in after hours in reaction to news: CMRX +27.8% (receives FDA clearance for rolling submission for NDA for brincidofovir), INO +7.6% (presents positive data with INO-4700 for MERS coronavirus), SUPN +5.2% (to acquire central nervous system portfolio from US WorldMeds for $530 mln), DVAX +2.6% (reports data from clinical trial evaluating HEPLISAV-B), MET +2.4% (increases dividend), UBER +0.6% (CTO to resign), CLB +0.2% (cuts dividend)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: IRBT -10.5%, UIS -5.7%, BYD -5.2%, FEYE -4.9%, F -4.8%, OKE -4.7%, AKAM -4%, AMD -4%, CHRW -2.7%, PAYC -2.2%, EHC -1.5%, TX -1.3%, CYH -1.1%, JNPR -0.7%, MDLZ -0.7%, SBUX -0.6%, APAM -0.4%, HIW -0.4%, MXIM -0.4%, CERN -0.2%, SYX -0.2%, AJRD -0.1%

Companies trading lower in after hours in reaction to news: RPD -5.4% (acquires DivvyCloud for $145 mln; provides preliminary Q1 results; announces proposed private offering of $200 mln of convertible notes), RDUS -3% (CEO to step down), SUI -2.9% (commences offering of 3.6 mln shares)

Fwd:Briefing; WRAPX; After Hours Summary: GOOG +8% up nicely on earnings; IRBT -10.5

After Hours Summary: GOOG +8% up nicely on earnings; IRBT -10.5%, FEYE -4.9%, F -4.8% are down on earnings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: ACA +18.9%, BXMT +9.2%, BXP +9.2%, MTH +8.7%, WW +8.1%, GOOG +8%, ENVA +6.8%, MASI +5.9%, DXCM +5.7%, HELE +4.8%, LSCC +3.9%, SIMO +3.7%, YUMC +3.5%, KBR +3.2%, MKSI +2.3%, OI +1.5%, CRSP +1.2%, AGR +0.8%, WIRE +0.8%, CHE +0.6%, CSGP +0.4%, MEDP +0.4%, MRC +0.2%

Companies trading higher in after hours in reaction to news: CMRX +27.8% (receives FDA clearance for rolling submission for NDA for brincidofovir), INO +7.6% (presents positive data with INO-4700 for MERS coronavirus), SUPN +5.2% (to acquire central nervous system portfolio from US WorldMeds for $530 mln), DVAX +2.6% (reports data from clinical trial evaluating HEPLISAV-B), MET +2.4% (increases dividend), UBER +0.6% (CTO to resign), CLB +0.2% (cuts dividend)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: IRBT -10.5%, UIS -5.7%, BYD -5.2%, FEYE -4.9%, F -4.8%, OKE -4.7%, AKAM -4%, AMD -4%, CHRW -2.7%, PAYC -2.2%, EHC -1.5%, TX -1.3%, CYH -1.1%, JNPR -0.7%, MDLZ -0.7%, SBUX -0.6%, APAM -0.4%, HIW -0.4%, MXIM -0.4%, CERN -0.2%, SYX -0.2%, AJRD -0.1%

Companies trading lower in after hours in reaction to news: RPD -5.4% (acquires DivvyCloud for $145 mln; provides preliminary Q1 results; announces proposed private offering of $200 mln of convertible notes), RDUS -3% (CEO to step down), SUI -2.9% (commences offering of 3.6 mln shares)

>>> Notable earnings/guidance movers:

Notable earnings/guidance movers: GOOG +3.3%, HELE +5.8%, WW +5.5%, YUMC +1.9%; IRBT -8%, F -6.1%, PAYC -4.8%
  • Earnings/guidance gainers: ACA +19.5%, BXP +9.2%, MTH +6.6%, DXCM +6.5%, HELE +5.8%, WW +5.5%, CYH +4.9%, LSCC +4.9%, UIS +4.8%, MASI +3.5%, GOOG +3.3%, ENVA +3%, MKSI +2.3%, YUMC +1.9%, BYD +1.7%, CSGP +1.7%, MPWR +1.5%, MEDP +1.1%, MXIM +1.1%,
  • Earnings/guidance losers: IRBT -8%, F -6.1%, PAYC -4.8%, OKE -4.7%, FEYE -4.5%, AMD -4.2%, AKAM -3.1%, CHRW -2.7%, SBUX -1.9%, EHC -1.5%, CERN -1.1%,

FT : Quality and growth ride the waves

Quality and growth ride the waves
Mike Mackenzie’s daily analysis of what’s moving global markets

Emergency measures that shut down economies and flood the financial system with money leaves investors facing a shortage of quality companies and those that are generating robust revenues.

Looking at equity markets via their broad levels misses an important aspect of what has been happening beneath the surface. There is a preference for security and that dovetails with the slumbering level of sovereign bond yields and crestfallen commodity prices. These market indicators paint a picture of weak economic activity and, at least initially, deflationary, rather than inflationary pressure.

Now, a number of readers are certainly worried about surging money supply in many countries as central banks have fired up their engines. Greater fiscal stimulus than what was seen after the financial crisis of 2009, may well spur a faster inflation pulse in time. Much rests on whether consumers and companies batten down and save a lot more once the pandemic passes. Such an outcome suggests an extended process of recovery and one that cuts across the chatter in some quarters about a new equity bull market.

What particularly worries some is the narrow leadership, led by tech, which on Tuesday in New York is on the defensive ahead of earnings from leading names over the coming few days (see Quick Hits). Typically, a narrow group of winners has in the past indicated the broad market is not far from a drop of some magnitude. The activist role of central banks has certainly prompted a sharp recovery in broad equity markets, but the lack of wider participation is worrisome. This suggests that expectations of an economic recovery that lifts cyclical sectors is not in place, only that central banks have placed a floor under asset prices.

Over at Unigestion they note:

And as Société Générale highlights here, four-tenths of blue-chip tech Nasdaq 100 stocks sit above their 100-day moving average, in contrast to far lower figures for other US equity benchmarks.
In turn, the divergence in performance is also stark, with the Nasdaq 100 close to flat on the year, whereas small and mid-cap benchmarks are off by a quarter. As shown here, a ratio of the Nasdaq 100 to the Russell 2000 is trending towards the peak that was notched at the turn of the century. This is where expectations of rising defaults and downgrades in high yield and for plenty of fallen angels in the lower echelon of investment grade (the weighty triple B-rated club) are blowing back into equities.

Now, many readers with long memories may look at this and think a sell signal is flashing for tech and growth stocks. There is also a tendency to fight previous battles and the current positioning seen in equities reflects expectations of a lacklustre recovery that distinguished the path taken by the economy during the post-financial crisis era.

Herding is a regular component of markets, but among companies, the ranks of thoroughbreds are thinning. Here via Goldman Sachs, they highlight the divide between companies in the MSCI World Equity index generating revenues or top-line growth beyond 8 per cent, versus those that can’t eclipse 4 per cent, or what they describe as “a simple definition of high versus low growth”.

Goldman’s portfolio strategy team led by Peter Oppenheimer notes:

Over in Europe and away from the US Fangs club of big tech, Goldman identify the “Granolas”, a group of companies with “relatively strong balance sheets, low volatility growth and good dividend yields, around 2 per cent-2.5 per cent”. They include a mix of healthcare, consumer staples and tech: GlaxoSmithKline, Roche, ASML, Nestlé, Novartis, Novo Nordisk, L’Oréal, LVMH, AstraZeneca, SAP and Sanofi.


It will certainly require evidence of a V-shaped economic recovery to ignite demand for cyclical and value stocks. The signal here is an appreciable rise out of negative territory for real yields, which in the past (briefly last year from August) has triggered a rotation from growth towards stocks that are more geared towards a better tone in the underlying economy. That may well arrive and spur another big value trade at the relative expense of growth.

John Higgins at Capital Economics says the US tech “mega-caps will have some success in consolidating their positions as the world slowly gets back to normal, provided they can avoid an antitrust backlash. However, we would be surprised if their shares continued to outperform so much then.”

But at this moment, investors are not really buying the end of equity market leadership from technology companies, particularly when they are benefiting from an acceleration in digital trends from the pandemic, such as working from home, greater use of cloud services, and online shopping among others, which is explored in this FT Markets Insight.
That leaves US tech and European Granolas topping their list of long-term winners.