- Richemont results drive sell-off in luxury goods sector
- Allianz gains after release of quarterly results
General market situation
The last trading session on European markets this week brings sell-offs on individual listed companies. Large declines are primarily recorded in shares of luxury brand companies, where investor sentiment was spoiled by Richemont's worse-than-expected results. Automotive companies are also clearly losing ground. Yesterday's relatively hawkish comments by Powell and a weak auction of U.S. debt securities further fueled declines in the markets.
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At the moment, companies listed in Europe during Friday's trading session are trading in weaker sentiment. Source: xStation 5
Quotes of contracts based on the German DE30 are trading nearly 0.35% lower on an intraday basis. The benchmark is all the time below the barrier set by the 50-day and 200-day exponential moving averages (blue and gold curves, respectively). Source: xStation 5
News:
Investors' attention during today's session in Europe is focused primarily on the luxury brand sector. Richemont (CFR.CH), which owns brands including Cartier and Van Cleef & Arpels, reported worse-than-expected quarterly and half-year results.
In the six months to the end of September, Richemont's sales rose 6% to €10.22 billion, below forecasts of €10.34 billion. Net income came in at €1.51 billion against expectations of €2.17 billion. Currency effects put additional pressure on margins.
The company's business structure is primarily in the jewelry and watch sectors. The first group is showing signs of strength, even though the economic (monetary) environment is not favorable for the company. Source: Richemont
The watch sector is doing much worse. Source: Richemont
Quarterly results with a breakdown to expectations. Source: Bloomberg Finance LP
Over the past few sessions, despite the medium-term downtrend, the company's shares have rebounded and managed to break out above the 100-period exponential moving average (purple curve, H4 interval). However, the reaction to the company's results managed to negate this breakout. Source: xStation5
Allianz (ALV.DE) also presented its financial results. In this case, however, investor reaction has been positive, with the company's shares gaining nearly 2%. Total business volume rose 4.5% to €36.5 billion, while operating profit declined 14.6% to €3.5 billion. The company added that the operating profit target for 2023 was confirmed at €14.2 billion, plus or minus €1 billion.
Relevant results and expectations of individual financial institutions. Source: Allianz
Chart of the company's shares, D1 interval. Source: xStation 5
Analyst recommendations:
* Adyen (ADYEN.NL): Wells Fargo upgrades the company to Overweight from its previous Underweight rating. Target price at €1,000, previously €650 per share
* Carlsberg (CARLB.DK): Bernstein upgrades the company to outperform from its previous market-perform rating.
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