blog

Latest from the Quantamize Blog

European and Asian stocks rally strong on Chinese stimulus news, closing the week on a positive note

Mar 15, 2019

Get Unbiased Quantitative Investment Research from Advanced AI Machine Learning Technology and Maximize your ReturnsGet Unbiased Quantitative Investment Research from Advanced AI Machine Learning Technology and Maximize your Returns
Get Unbiased Quantitative Investment Research from Advanced AI Machine Learning Technology and Maximize your ReturnsGet Unbiased Quantitative Investment Research from Advanced AI Machine Learning Technology and Maximize your Returns

 

scroll down for the Asian markets recap

International Stock Markets Indexes

*Data in Price Return and Updated Real-Time (with a delay), Source: StockDio

European Markets Recap

  • The rally in European stocks faces challenges going forward.  While the Stoxx Europe 600 is +11.3% YTD, future gains will be capped unless without a pick-up in German macroeconomic data and/or an acceleration in European corporate profit growth.  
  • Global oil prices are on pace for a +4.4% gain this weekthe second weekly gain for crude oil.  Wednesday’s report that US crude inventories dropped more than expected has pushed oil prices to a 4-month high with further market tightening driving bullish sentiment among commodity traders. 
  • According to analysis by Bloomberg, industrials companies have been the “smartest” when buying back stocks.  Notably, management teams at railroads companies have been the most adept at buying back their stock at low prices. 
  • The Euro Stoxx 600 is currently up +0.72%, the FTSE 100 is higher by +0.68%, the DAX has risen +0.73%, and the CAC 40 is up +1.05%
  • Technology (+2.59%), Telecommunications (+1.57%), and Insurance (+1.27%) stocks are the top performers in the Euro Stoxx 600 today
  • Basic Resources (-0.04%), Media (+0.04%), and Real Estate (+0.12%) stocks are the worst performers in the Euro Stoxx 600 today
  • Investor sentiment for European stocks is positive with the advance/decline ratio for the Euro Stoxx 600 currently at 3.11x
  • 147 stocks in the Euro Stoxx 600 are at 4-week highs while 17 stocks are at 4-week lows
  • 78 stocks in the Euro Stoxx 600 are overbought while 8 stocks are oversold according to the 16-day RSI Measure

Asian Stock Markets Indexes

Asian Markets Recap

  • Chinese Premier Li Keqiang highlighted the different accounting measures he plans to use to fund a record tax cut.  Li is hoping to jumpstart the decelerating Chinese economy using fiscal stimulus 
  • The Nikkei 225 finished up +0.77%, the Hang Seng ended up +0.56%, the Hang Seng China Enterprise up +0.53%, and the CSI 300 was +1.26%
  • Investor sentiment for Japanese stocks finished positive with the advance/decline ratio for the Nikkei 225 closing at 4.23x
  • 30 stocks in the Nikkei 225 hit 4-week highs while 17 stocks reached 4-week lows
  • 11 stocks in the Nikkei 225 closed overbought while 4 stocks closed oversold according to the 16-day RSI Measure
  • Investor sentiment for Hong Kong stocks finished positive with the advance/decline ratio for the Hang Seng closing at 2.85x
  • 9 stocks in the Hang Seng hit 4-week highs while 4 stocks reached 4-week lows
  • 1 stock in the Hang Seng closed overbought while 0 stocks closed oversold according to the 16-day RSI Measure

Stocks Trending in the News

Click name for Q-Factor score and financial data

Global Consumer Stocks Trending in the News

  • BMW AG (DB:BMW) Oracle reported a 7.9% drop in ebit to 9.12 billion euros.  BMW declared a full year dividend of 3.50 euros per shares, below the 3.86 consensus.  BMW’s CEO said the coming year is full of significant challenges for BMW, the company will shrink its lineup to deal with these challenges.  BMW sees a slight rise in deliveries in 2019.  BMW AG is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • H&M (OM:HM B) reported fiscal first quarter sales of SEK51.02 billion, beating consensus of SEK50.05 billion.  H&M saw sales growth of 4% in the quarter in local currency.  RBC commented that while the progress in inventory management is positive the valuation is still not attractive enough to change it neutral rating.  H&M is rated “Top Short” in our European Large-Cap Global Top Stock Ideas.
  • Live Nation (LYV) was downgraded to neutral from buy at Citi while its price target was raised to USD$63 from USD$59.   Live Nation is unlikely to make any acquisition near-term as it digests its recent acquisitions.  These have been the main driver for the stock’s recent strong run-up, which Citi does not see continuing near-term.  Live Nation is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Tesla (TSLA) unveiled its newest vehicle, the Model Y.  The Model Y is set to be cheaper than its larger SUV brother and higher-end versions should ship to customers late 2020 with basic models, priced at USD$39,000, to ship mid-2021.  Tesla CEO Elon Musk presented the new model in a rather subdued manner, noticeably different than his charismatic self.  Telsa is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Ulta Beauty (ULTA) reported fourth quarter EPS of USD$3.61 beating consensus of USD$3.56.  Ulta Beauty reported fourth quarter revenue of USD$2.12 billion in line with consensus of USD$2.11 billion.  Ulta saw same store sales growth of +9.4%, well above 7.9% consensus.  Ulta Beauty gave 2019 EPS guidance of around USD$12.65-12.85.  Ulta Beauty is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.

Global Information Technology & Communication Services Stocks Trending in the News

  • Adobe (ADBE) Oracle reported fiscal first quarter 2019 EPS of USD$1.71 beating consensus of USD$1.62.  Oracle reported fiscal first quarter 2019 revenue of USD$2.60 billion beating consensus of USD$2.55 billion.  Adobe gave second quarter EPS guidance of around USD$1.77.  Adobe is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Apple (AAPL) is targeting prestigious awards with its new streaming service, according to a report in Bloomberg.   Apple is hiring established talent from Hollywood, seeking to build a platform that will complete with Netflix (NFLX) and big Hollywood studios.  Apple has put together an awards strategy team to realize its ambitions.  Apple is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.  Netflix is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Cree (CREE) announced it is selling its lighting unit to Ideal Industries (IFX) for a total of USD$310 million.  Cree will receive USD$225 million cash and up to USD$85 million in earn out payments over the next 12 months that starts 2 years after closing of the deal.  Cree gave fiscal third quarter recurring revenue guidance of USD$271-277 million.  Cree is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Information Technology Global Top Stock Ideas. Ideal Industries is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Facebook (FB) saw the exit of some key executives this week.  Chris Cox, Facebook’s Chief Product Officer, left after 13 years at the company.  Cox was key to the development of Facebook’s newsfeed that has been central to the Facebook experience for so long.  With Facebook shifting away from the newsfeed, it was not a surprise he is leaving.  Facebook is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Lam Research (LRCX) saw its price target raised at Citi to USD$215 saying it sees a pickup in NAND orders.  Citi believes prices for NAND have hit a trough and increased demand will come going forward.  Lam Research remains the top equipment pick at Citi.  Lam Research is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Micron (MU) was downgraded at Cross Research to hold from buy.  Merill Lynch maintains its buy rating and USD$50 price target but warns of falling selling prices in the second quarter of 2019.  This is expected to be temporary with a turnaround coming by the fourth quarter.  Micron is rated “Unattractive” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Oracle (ORCL) reported fiscal third quarter 2019 EPS of 87 cents beating consensus of 84 cents.  Oracle reported fiscal third quarter 2019 revenue of USD$9.62 billion in line with consensus of USD$9.59 billion.  Oracle increased its quarterly dividend to 24 cents per share from 19 cents.  Oracle is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Snap Inc. (SNAP) shares surged to their highest levels since September 2018 after BTIG announced a Street-high price target of USD$15/share. In a note to clients, BTIG analyst Rich Greenfield wrote, “Virtually everything that could go wrong for Snapchat over the past couple years since going public has gone wrong.” Greenfield believes that overseas advertisers will take advantage of Snap Inc.’s relatively low bid prices for ad inventory in the US, driving a stronger FY2019 than the previous year. Snap Inc. is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Information Technology Global Top Stock Ideas.
  • Spotify’s (SPOT) CEO commented today his company has suffered greatly from the restrictions Spotify alleges Apple (AAPL) has placed on it.  These alleged restrictions are the reason Spotify complained to the EU, demanding an investigation of Apple’s business practices.  He added that one of the biggest complaints from customers is their inability to get Spotify to work on Apple’s products.  The EU antitrust regulator said it would take the complaint seriously.  Spotify is not rated in our Global Top Stock Ideas.  Apple is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.

Global Industrials Stocks Trending in the News

  • Air Canada (TSX:A C) has suspended financial guidance for the coming quarter and full year given the grounding of the 737 Max jets.  Air Canada said it is devising a contingency plan for the loss of the jets but does not have anything to announce yet.  Macquarie is recommending clients use the weakness in the stock as a buying opportunity.  Air Canada is rated “Attractive” in our Canada All-Cap Global Top Stock Ideas. 
  • Equifax (EFX) was initiated at Exane BNP Paribas with a neutral.  Equifax saw its price target set at USD$106.  The average price target in the market is USD$117.64 presently.   S&P downgraded Equifax’s credit rating to BBB- with a negative outlook saying its revenues will continue to be pressured by one-time costs and investment spending.  Equifax is rated “Neutral” in our US Large-Cap and “Unattractive” in our US Industrials Global Top Stock Ideas.

Global Commodities & Power Stocks Trending in the News

  • ExxonMobil (XOM) said today it intends to lower the cost of pumping oil in the Permian Basin to USD$15 per barrel.  For comparison, that is a low cost that can only be found in the huge fields of the Middle East.  The Permian Basin total production is close to 4 million barrels per day, equal to all the production in Iraq today.  ExxonMobil is deploying 55 rigs there by 2024 and total production there is expected to double by that time.  ExxonMobil is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.

Global Healthcare Stocks Trending in the News

  • BioScrip (BIOS) and Option Care Enterprises have agreed to merge in an all stock transaction.  Upon completion, the resulting company will be 80% owned by investment funds that are affiliated with Madison Dearborn Partners and Walgreens Boots Alliance (WBA).  The company will remain listed in Nasdaq.  Bioscrip is rated “Attractive” in our US SMID-Cap Global Top Stock Ideas.  Walgreens Boots Alliance is rated “Attractive” in our US Large-Cap and “Neutral” in our US Consumer Staples Global Top Stock Ideas.

 

Global Top Stock IdeasTOP LONG & TOP SHORT STOCK IDEAS FOR GLOBAL MARKETSMONTHLY TOP IDEAS FROM OUR MULTI-FACTOR QUANTITATIVE MODELS
Global Top Stock IdeasTOP LONG & TOP SHORT STOCK IDEAS FOR GLOBAL MARKETSMONTHLY TOP IDEAS FROM OUR MULTI-FACTOR QUANTITATIVE MODELS