31 07 EU PRE OPEN

INDICES
Yesterday, European stocks closed in the red. The Stoxx Europe 600 Index shed 2.16%, Germany's DAX 30 tumbled 3.45%, France's CAC 40 lost 2.13%, and the U.K.'s FTSE 100 fell 2.31%.

EUROPE ADVANCE/DECLINE
93% of STOXX 600 constituents traded lower or unchanged yesterday.
30% of the shares trade above their 20D MA vs 47% Wednesday (below the 20D moving average).
45% of the shares trade above their 200D MA vs 50% Wednesday (above the 20D moving average).

The Euro Stoxx 50 Volatility index added 3.79pts to 28.02, a new 52w high.

SECTORS vs STOXX 600
3mths relative high: Industrial
3mths relative low: Energy

Europe Best 3 sectors
travel & leisure, food & beverage, health care

Europe worst 3 sectors
banks, insurance, automobiles & parts


INTEREST RATE
The 10yr Bund yield rose 1bp to -0.5% (below its 20D MA). The 2yr-10yr yield spread rose 1bp to -17bps (above its 20D MA), a new 3mths high.


ECONOMIC DATA
FR 06:30: Q2 GDP Growth Rate QoQ Prel, exp.: -5.3%
GE 07:00: Jun Retail Sales MoM, exp.: 13.9%
GE 07:00: Jun Retail Sales YoY, exp.: 3.8%
FR 07:45: Jun Household Consumption MoM, exp.: 36.6%
FR 07:45: Jul Inflation Rate YoY Prel, exp.: 0.2%
FR 07:45: Jul Inflation Rate MoM Prel, exp.: 0.1%
FR 07:45: Jul Harmonised Inflation Rate YoY Prel, exp.: 0.2%
FR 07:45: Jul Harmonised Inflation Rate MoM Prel, exp.: 0.1%
EC 10:00: Jul Core Inflation Rate YoY Flash, exp.: 0.8%
EC 10:00: Jul Inflation Rate YoY Flash, exp.: 0.3%
EC 10:00: Q2 GDP Growth Rate YoY Flash, exp.: -3.1%
EC 10:00: Q2 GDP Growth Rate QoQ Flash, exp.: -3.6%
EC 10:00: Jul Inflation Rate MoM Flash, exp.: 0.3%


MORNING TRADING
In Asian trading hours, the U.S. dollar kept sliding against other major currencies. EUR/USD touched 1.1900 on the upside, and GBP/USD shot above 1.3100. USD/JPY sank below 104.30. AUD/USD crossed above 0.7200.

Spot gold continued a rebound challenging $1,970 an ounce.


#UK - IRELAND#
London Stock Exchange, the U.K.'s primary stock exchange, reported 1H results: "Total income up 8% to 1,235 million pounds (H1 2019: 1,140 million pounds) (...) FTSE Russell revenue up 5% to 330 million pounds (...) Post Trade revenue up 9% to 372 million pounds (...) Capital Markets revenue down 4% on a reported basis to 217 million pounds (...) profit before tax of 362 million pounds (H1 2019: 363 million pounds) (...) Adjusted EPS up 11% to 112.0 pence (...) the Directors have declared an interim dividend of 23.3 pence 
per share, an increase of 16% (H1 2019: 20.1 pence per share)." 

British American Tobacco, a cigarettes maker, posted 1H results: "Reported revenue increased 0.8% to 12,271 million pounds (...) Reported profit from operations was up 16.4% to 5,097 million pounds, with reported operating margin up 550 bps at 41.5%, as the prior period was impacted by the charge in respect of the Quebec class action in Canada; (...) Reported basic and diluted EPS increased 22.7% to 151.2 pence and 150.7 pence respectively."

Intertek Group, a product inspection firm, issued 1H results: "Revenue of 1,330.6 million pounds, was down 7.8% year-on-year (YoY) at actual rates (...) Revenue on a like-for-like (LfL) basis declined 8.0% at constant rates. (...) adjusted operating profit performance of 168.2 million pounds, down 32.2% at constant rates and 32.4% at actual rates. (...) Adjusted diluted earnings per share at actual exchange rates was 35.7% lower at 63.1p. (...) We have announced a half year dividend of 34.2 pence per share, unchanged on the prior year."


#GERMANY#
ProSiebenSat.1 Media, a German broadcaster, reported that it swung to a 2Q net loss of 54 million euros from a net income of 93 million euros in the prior-year period, citing its declining advertising business.


#FRANCE#
BNP Paribas, a French bank, reported that 2Q net income declined 6.8% on year to 2.30 billion euros. It pointed out: "The cost of risk, at 1,447 million euros, rose by 826 million euros compared to the second quarter 2019. It stood at 65 basis points of outstanding customer loans. The updating of macroeconomic scenarios led to a 329 million euro increase in the ex-ante provisioning of expected losses (including their sectoral component). (...) the common equity Tier 1 ratio stood at 12.4%, up 40 basis points from 31 March 2020."

Vinci, a French construction firm, said it swung to a 1H net loss of 294 million euros from a net income of 1.36 billion euros in the prior-year period on revenue of 18.49 billion euros, down 15% on year. The Company expects the earnings slip in the 2H to be less pronounced than that of 1H.

L'Oreal, a cosmetics producer, announced that 1H net income fell to 1.83 billion euros from 2.33 billion euros in the prior-year period on sales of 13.10 billion euros, down 12.0% on year. It pointed out: "The consumption of beauty products over the period was strongly impacted by the closure of millions of points of sale, which caused a real crisis of supply, rather than demand, with consumers temporarily unable to purchase products and services."

Vivendi, a French media giant, posted 1H net income up 45.6% on year to 757 million euros on revenue of 7.58 billion euros, up 3.1%. 

Saint-Gobain, a construction materials producer, said it swung to a 1H net loss of 434 million euros from a net income of 689 million in the prior-year period. 2Q operating income plunged 49.6% to 827 million euros on sales of 17.76 billion euros, down 18.1%.

Air France-KLM, an airline company, posted a 2Q net loss of 2.61 billion euros from a net income of 97 million euros in the prior-year period, citing: "an impairment on Airbus 380 and 340 aircraft at respectively -520 and -72 million euros, Covid-19 related over-hedging at -105 million euros, and restructuring provision at -227 million euros". 2Q revenue plummeted 83% on year to 1.18 billion euros.

From a daily point of view, the stock has broken a key support at 3.6E. Moreover, the RSI is capped by a bearish trendline since mid-July. Below 4E look towards the all-time low at 3E and 2.5E in extension.


Source: GAIN Capital, TradingView


#SPAIN#
Amadeus IT, which processes travel and tourism transactions, reported a 2Q net loss of 315 million euros, compared to a net income of 309 million euros in the prior-year period.


#ITALY#
Fiat Chrysler Automobiles: 2Q adjusted net income roe to 311 million euros from 258 million euros in the prior-year period on sales of 5.09 billion euros, down 11%. 


#SWITZERLAND#
Swiss Re, a Swiss insurance firm, said it swung to a 1H net loss of 1.14 billion dollars from 953 million dollars in the prior-year period. Claims and reserves related to the coronavirus pandemic amounted to 2.5 billion dollars. The Company's CEO said: "While some degree of uncertainty remains with regards to future Covid-19 losses, we are confident in the outlook for our Group." 


#SCANDINAVIA#
Nokia, which makes telecoms devices, reported that 2Q adjusted net income rose to 311 million euros from 258 million euros in the prior-year period. The Company has raised its full-year adjusted earnings per share forecast to 0.25 euro from 0.23 euros previously.