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Foreign Stock Roundup: JD.com Beats Estimates, Petrobras & Infineon Miss

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Political uncertainty in the United Kingdom and commodity prices weighed on Europe’s stocks over last week. Asia’s energy stocks also suffered losses even as economic data from China came in below expectations. Meanwhile, Brazil’s investors remained worried about President Temer’s ability to push through pension reforms even as dismal results from a state run oil major dragged stocks lower.

Commodities, U.K. Political Concerns Weigh on Europe’s Stocks

Political concerns emanating from the United Kingdom and earnings numbers dominated proceedings for Europe’s bourses on last Monday. The STOXX 600 recouped some of its losses to close the session 0.7% lower with nearly all prominent sectors closing the day with losses. The FTSE 100, CAC 40 and DAX declined 0.2%, 0.7% and 0.4%, respectively. Financials services stocks suffered the worst losses, moving 1.6% lower. 

The STOXX 600 declined 0.6% last Tuesday following a significant decline in commodities. Nearly all prominent sectors closed the day with losses. The FTSE 100, CAC 40 and DAX declined 0.01%, 0.5% and 0.3%, respectively. Basic resources stocks lost 2.7%, emerging as the worst performing sector. This category of stocks was hit by dismal China data and a fall in prices of metals.

Stocks across Europe recouped some of their early losses on last Wednesday. However, the STOXX 600 still closed the session 0.5% lower. A continuing decline in prices of commodities and, consequently, stocks from the sector, weighed down markets once again.

The FTSE 100, CAC 40 and DAX declined 0.6%, 0.3% and 0.4% respectively. Bourses across Asia and in the U.S. also suffered losses which dragged European markets down even further.

The STOXX 600 advanced 0.8% last Thursday as investors continued to receive earnings numbers and economic data. All of the index’s sectors finished in the green even as the FTSE 100, CAC 40 and the DAX gained 0.2%, 0.7% and 0.6%, respectively. Materials and construction stocks emerged as the best performing sector, adding 2%. The financial services sector gained 1.6%.

Europe’s investors closely observed trading on Wall Street even as Europe’s stocks closed last Friday with losses. The STOXX 600 recouped part of its early losses to finish the day 0.3% lower. The FTSE 100, CAC 40 and DAX declined 0.1%. 0.3% and 0.4%, respectively. Stocks of retail companies suffered the most, ending the day 0.7% lower. Meanwhile, utilities stocks declined 1.4%. Mergers news helped media stocks end the day as the best performing sector.

Asia’s Energy Stocks Suffer, China Data Comes in Below Expectations

Stocks across Asia remained under pressure last Monday even as Wall Street closed with losses. The Nikkei 225 declined 1.3%, ending in the red for the fourth consecutive session. Financials and tech stocks closed the day with losses. The Kospi and the S&P/ASX 200 lost 0.5% and 0.1%, respectively. The Shanghai Composite and the Shenzhen Composite declined 0.5% and 0.3%, respectively.

A quiet trading session on Wall Street weighed down Asia’s stocks on last Tuesday. Meanwhile, China’s fixed assets investment, retail sales and industrial output came in below expectations. The Nikkei ended the day flat while the Kospi and the S&P/ASX 200 declined 0.2% and 0.9%, respectively. The Shanghai Composite and the Shenzhen Composite lost 0.5% and 1%, respectively.

Markets across Asia declined last Wednesday even as energy stocks moved lower following a fall in oil prices. The Nikkei 225 moved 1.6% lower, closing in the red for the sixth consecutive session in a row.

However, Japan’s GDP expanded by 1.4% in the third quarter, defying expectations. The Kospi and the S&P/ASX 200 declined 0.3% and 0.6%, respectively. The Shanghai Composite and the Shenzhen Composite lost 0.8% and 1%, respectively. 

The Nikkei rebounded last Thursday, gaining 1.5%, snapping a six-day stretch of losses. Financials and tech stocks helped Japan’s benchmark recover from its losses. Stocks across Asia moved higher even as Wall Street notched up only marginal closes.

The Kospi and the S&P/ASX 200 added 0.6% and 0.2%, respectively. Australia’s energy stocks gained 1.9% after suffering losses earlier in the week. The Shanghai Composite and the Shenzhen Composite advanced 0.1% and 0.2%, respectively.

Stocks across Asia ended mixed last Friday even as Wall Street notched up significant losses. The Nikkei and the S&P/ASX 200 each gained 0.2% while the Kospi lost 0.03%. The region’s energy stocks ended the day mixed after Norway’s sovereign wealth fund announced it was dropping oil and gas stocks from its benchmark index. The Shanghai Composite and the Shenzhen Composite declined 0.5% and 2.8%, respectively.

Earnings Numbers, Materials Demand Boost Bovespa

Brazil’s benchmark Bovespa index edged up 0.1% last Monday even as investors remained concerned about President Temer’s ability to push through pension reforms. However, Brazil’s stocks moved lower on Tuesday, dragged down by a decline in shares of Petrobras (PBR - Free Report) . Shares of the oil major lost 5.7%, suffering its worst decline in six months even as the Bovespa lost 0.8%.

After remaining closed last Wednesday due to a local holiday, the Bovespa added 2.4% last Thursday. An encoring batch of earnings numbers boosted stocks higher on this occasion. Last Friday, Chile’s blue-chip IPSA index gained 1.5% ahead of elections Market’s favorite Sebastian Panera is expected to deliver a stellar performance at the hustings. Meanwhile, strong demand for materials helped the Bovespa increase 1.3%.

Stocks in the News

Petrobras saw its shares crash more than 7% on Nov 14 after it announced third-quarter earnings per ADR of 3 cents, well short of the Zacks Consensus Estimate of 15 cents and a lot lower than the year-ago earnings of 12 cents.

The troubled national oil company’s net operating revenues of $22,700 million improved from the year-earlier sales of $21,693 million on higher crude prices but fell shy of the Zacks Consensus Estimate of $23,141 million.

Zacks Rank #3 (Hold) Petrobras lowered the goal for asset divestitures for this year to $7 billion from $8 billion previously, a sign that Brazil's flagship oil company has been hamstrung by court verdicts, freezing some deals. (Read: Petrobras Misses on Q3 Earnings, Manages to Cut Debt)

JD.com, Inc. (JD - Free Report) reported third-quarter earnings of 23 cents per share, surpassing the Zacks Consensus Estimate of 10 cents. Revenues were also better than expected. JD.com reported revenues of RMB83.7 billion (US$12.6 billion), beating the Zacks Consensus Estimate of US$12.3 billion and improving 39.2% year over year. JD.com has a Zacks Rank #3.

For the fourth quarter of 2017, management expects net revenues in the range of RMB107-RMB110 billion, reflecting a growth rate between 35% and 39% year over year. This guidance excludes the impact from JD Finance for both 2017 and 2016. (Read: JD.com Beats on Q3 Earnings, Revenues Increase Y/Y)

Infineon Technologies AG (IFNNY - Free Report) reported fourth-quarter fiscal 2017 adjusted earnings of 26 cents per share, missing the Zacks Consensus Estimate by a nickel. However, the figure increased 4.8% on a year-over-year basis.

Revenues increased 8.7% year over year to $2.15 billion in the quarter, lagging the Zacks Consensus Estimate of $2.17 billion. The top-line growth came on the back of strong sales across all the four business segments. Power represents almost 60% of revenues in the reported quarter.

In fiscal 2017, Zacks Rank #5 (Strong Sell) Infineon reported earnings of $1, up 11.8% from fiscal-2016 level. The upside was primarily driven by 9.1% growth in revenues, which totaled $8.34 billion.

For fiscal 2018, revenues are expected to grow almost 9% (+/- 2%). Segment margin is projected to be almost 17% at mid-point of the guidance. First-quarter fiscal 2018 revenues are expected to decline 2% (+/- 2%). At the mid-point of revenue guidance, the segment margin is expected at 15%. (Read: Infineon Q4 Earnings Lag Estimates, Power Demand Up)

FUJIFILM Holdings Corporation (FUJIY - Free Report) recently made a ¥170-million investment in Japan-based bioventure — TOKIWA-Bio, Inc. (TOKIWA-Bio) — in order to enhance its in-house renewing medicine products portfolio. The company intends to acquire TOKIWA-Bio’s transgenic technology with this investment.

Through the ¥170-million deal, Fujifilm will win TOKIWA-Bio's transgenic technology’s license, for its iPS cell research and production actions. The stock has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here . 

AstraZeneca, plc (AZN - Free Report) announced that the FDA has granted approval to its asthma disease candidate, benralizumab. Benralizumab, approved as an add-on maintenance treatment for severe eosinophilic asthma in patients aged 12 years and older, will be marketed by the trade name of Fasenra. AstraZeneca has a Zacks Rank #3.

Fasenra will be given as a fixed-dose subcutaneous injection via a prefilled syringe, once in every eight weeks, making it the first respiratory biologic medicine to be approved with the convenient 8-week maintenance dosing schedule. (Read: AstraZeneca's Asthma Drug Benralizumab Approved by FDA)

BP Plc (BP - Free Report) recently commenced a share buyback program, keeping with the plans announced along with the third-quarter 2017 earnings report. This makes BP the first leading energy player in Europe to recommence buybacks after 2014, when repurchases were stalled as crude price started falling on supply glut woes.

As per the program, Zacks Rank #3 BP will repurchase no more than 1.96 billion shares between Nov 15 and the company’s annual general meeting in 2018. (Read: BP to Recommence Share Repurchase as Crude Bounces Back)

Roche Holdings AG (RHHBY - Free Report) recently announced FDA clearance for the VENTANA MMR IHC Panel for immunohistochemistry (IHC) tests on colorectal cancer patients. The tests will detect certain proteins associated with a DNA repair mechanism called mismatch repair (MMR). This in turn will enable in differentiating between sporadic colorectal cancer and probable Lynch syndrome, a hereditary form of colorectal cancer. (Read: Roche Receives FDA Clearance for Ventana MMR Test)

In a separate development, Zacks Rank #3 Roche announced that the FDA has approved Hemlibra (emicizumab-kxwh) for routine prophylaxis to prevent or reduce the frequency of bleeding episodes in adults and children with haemophilia A with factor VIII inhibitors. (Read: Roche's Hemophilia A Drug Receives FDA Approval)

Performance of Leading Foreign Stocks

The table given below shows the price movements of 10 of the largest stocks listed on indexes worldwide, over the last five days and during the last six months.

 

Ticker

 

Last 5 Day’s Performance

 

6-Month Performance

SNY

-1.0%

-9.7%

E

-3.6%

-3.5%

SAP

+1.0%

+8.3%

IDEXY

-0.2%

-14.2%

BABA

-0.7%

+50.2%

CHL

-2.8%

-9.5%

KEP

+0.3%

-9.3%

TM

-1.0%

+14.6%

ABEV

+2.0%

+10.3%

MELI

-0.4%

-1.0%

Next Week’s Outlook

Over this week, Britain’s political uncertainty is likely to inject a high degree of uncertainty into the proceedings of Europe’s markets. Meanwhile, commodity prices will continue to have a significant bearing on the fortunes of markets in both Europe and Asia going forward.

China’s growth related worries are likely to continue to weigh on Asia’s investors. Also, Brazil’s bourses will continue to closely watch pension reforms related developments. Taken together, this will likely make for a volatile week for indexes across the globe.

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