blog

Latest from the Quantamize Blog

Incoming! EU absorbs first tariff salvo from US and fires back immediately, sending European stocks lower

Apr 09, 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

  • European stocks closed lower as the tit-for-tat tariff threats between the US and EU weighed on sentiment today
  • President Trump has vowed to hit the EU with tariffs for its subsidies to Airbus (ENTXPA:AIR) and the EU responded it will do the same due to US subsidies to Boeing (BA)
  • The Euro Stoxx 600 closed down -0.47%, the FTSE 100 declined -0.35%, the DAX fell -0.94%, and the CAC 40 finished down -0.65%
  • Analysts began the last quarter expecting a 4.3% hike in profits but by the end of the quarter the expectation was for a 3.6% drop in profits
  • The cut to earnings estimate is the greatest in almost 3 years.  Such a dramatic cut would suggest expectations are too pessimistic and that market may possibly see a pop from earnings beats over the next few months.  
  • Oil remains strong with WTI crude above $64, last traded at $64.05
  • Investor sentiment for European stocks finished trading negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.33x
  • Banks (+0.13%), Health Care (+0.06%), and Food & Beverage (+0.03%) stocks were the top performers in the Euro Stoxx 600 today
  • Technology (-1.47%), Retail (-1.19%), and Real Estate (-1.05%) stocks were the worst performers in the Euro Stoxx 600 today
  • 101 stocks in the Euro Stoxx 600 hit 4-week highs while 14 stocks closed at 4-week lows
  • 71 stocks in the Euro Stoxx 600 finished the trading session overbought while 2 stocks closed oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, closed little changed -0.51 points today to 14.09 after closing at 14.6 yesterday
  • EUR€ is currently little changed against the USD$ at 1.1277

Asian Stock Markets Indexes

Asian Markets Recap

  • The Nikkei 225 finished up +0.19%, the Hang Seng ended up +0.27%, the Hang Seng China Enterprise up +0.18%, and the CSI 300 was +0.45%
  • Investor sentiment for Japanese stocks finished negative with the advance/decline ratio for the Nikkei 225 closing at 0.68x
  • 21 stocks in the Nikkei 225 hit 4-week highs while 37 stocks reached 4-week lows
  • 12 stocks in the Nikkei 225 closed overbought while 5 stocks closed oversold according to the 16-day RSI Measure
  • Investor sentiment for Hong Kong stocks finished neutral with the advance/decline ratio for the Hang Seng closing at 1.17x
  • 13 stocks in the Hang Seng hit 4-week highs while 2 stocks reached 4-week lows
  • 14 stocks 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

  • Cie Financiere Richemont SA (SWX: CFR) shares edged lower today after Credit Suisse downgraded its recommendation for the stock from neutral to underperform. Over the last 3 months, analysts have lowered their consensus price target for Richemont by 2.3%. Currently, Richemont maintains 10 buy recommendations, 18 hold recommendations, and 2 sell recommendations across analyst ratings. Richemont is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Harley-Davidson (HOG) was downgraded to market perform from outperform at Wells Fargo Securities.  Harley-Davidson’s price target was raised to $41 from $40 as well.   Harley-Davidson has risen 19% since the start of the year and with expected pricing headwinds in 2019, a downgrade was in order, Wells Fargo writes.  Harley-Davidson is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • The Japanese government will sell about $12 billion of Japan Post (TSE:6178) shares, according to the Ministry of Finance.  This sale will be the third and final sale by the government and will complete the privatization that was begun in 2015.  Post-sale, the government will hold less than a third of the company, the level required by law.  The sale of Japan Post shares could happen as soon as September.  Japan Post is rated “Neutral” in our Japan All-cap Global Top Stock Ideas.
  • Tesla (TSLA) announced sales staff cuts in the wake of disappointing delivery data.  Tesla let sales staff go in Chicago, Brooklyn, Tampa and a handful of other locations.   These people were tasked with contacting people for test drives, etc and are no longer needed as Tesla shifts to online ordering.  Tesla is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Walmart (WMT) is fully embracing robots in its stores as it seeks to control labor costs.  Walmart is using robots to check inventory, clean floors and load inventory as it pays its workers more.  Walmart said 300 stores will add robots this year to check inventory while 1500 stores will receive automated floor scrubbers.  Walmart said 1 robot can save a number of hours of human work each day, allowing it greater flexibility with labor.  Walmart is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Staples Global Top Stock Ideas.
  • Wynn Resorts Ltd. (WYNN) shares fell on Tuesday after talks to acquire Australia’s Crown Resorts Ltd. (ASX: CWN) for as much as AUS$9.99bn abruptly ended. The talks fizzled out just hours after the talks were made public on Monday. Wynn Resorts confirmed in a statement published Tuesday that the company ended acquisition talks, “following the premature disclosure of preliminary discussion.” Wynn Resorts is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas. Crown Resorts is rated “Neutral” in our Australia Large-Cap Global Top Stock Ideas.  

Global Information Technology and Communication Services Stocks Trending in the News

  • Apple’s (AAPL) opportunity in the health sector could be three times what the smartphone offers it, according to a report from Morgan Stanley today.  Apple’s opportunity ranges from $15 billion to up to $313 billion.  Morgan Stanley says Apple has the potential to be a digital disruptor in the health space with wearable like its Apple Watch.  Apple could be building the blocks of another ecosystem, Morgan notes.  Apple is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • China Tower (SEHK: 788) shares continued higher after Wellington Management disclosed that it increased its stake in the company by more than 201mm shares. Wellington Management now holds roughly 9.2% of China Tower shares, up from the 8% of shares held as of March 29. China Tower is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
  • SAP (DB:SAP) suffered 2 downgrades ahead of its earnings release.  HSBC cut SAP to hold from buy.  HSBC sees a risk to free cash flow generation with cloud adoption happening faster than expected.  UBS cut the stock to neutral from buy.  UBS believes that SAP’s 71% gross margin target in 2020 is “unattainable.”  UBS increased SAP’s price target to 105 euros from 98.  SAP is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • Snap Inc. (SNAP) shares extended their rally Monday as shares are trading at their highest since August 2018 following an upgrade from RBC Capital Markets. RBC upgraded Snap Inc. shares from neutral to outperform, citing product innovation and a potential return to growth in daily active users. 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.
  • Sony (TSE:6758) shares surge after it is reported that Third Point, the hedge fund run by Dan Loeb, is building a position in the company.  Reuters reports Loeb is looking to raise between $500 million and $1 billion to build a large position in an effort to sway Sony’s strategy.  Loeb may target certain divisions of Sony for divestiture, especially parts of its movie studios.  Sony is rated “Attractive” in our Japan All-cap Global Top Stock Ideas.
  • Telaria, Inc. (TLRA) shares traded higher after Canaccord raised its price target for the stock to a Street-high USD$9/share. Canaccord analyst Austin Moldow explained that he sees Telaria as a potential M&A target of Disney (DIS). In the past, Telaria has done business with Hulu, ABC, A&E, and Fox, which are all under Disney. Telaria is rated “Unattractive” in our US SMID-Cap Global Top Stock Ideas. Disney is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Walt Disney Co. (DIS) was upgraded to outperform from market perform at Cowen.  Disney’s price target was hiked to $131 from $102.  Cowen sees Disney well positioned for the launch of its streaming service, which Cowen expects will launch stronger than expected.  Disney has a “very powerful pipeline of products” and is in great shape for the coming quarters, the report notes.  Walt Disney Co. is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.

Global Financial Stocks Trending in the News

  • Wells Fargo (WFC) has languished in the 2+ years since its sales practices scandal, according to the WSJ.  In that time the bank has struggled as 2 CEOs have exited and revenue in its 3 main business lines has fallen.  Wells Fargo was once a fast growing, nimble bank admired by peers.  Today it is seeing falling revenue and is using cost cuts to boost earnings.  With no permanent CEO and a difficult job finding one, it is not clear what Wells’ plan going forward will be.  Wells Fargo is rated “Neutral” in our US Large-Cap Global Top Stock Ideas

Global Industrials Stocks Trending in the News

  • Airbus (ENTXPA:AIR) is illegally receiving subsidies from the EU, the US alleges, and the US intends to place tariffs on the EU because of it.  The EU said Boeing (BA) receives illegal subsidies from the US and the EU will respond with its own tariffs on the US.  The US and EU have been fighting over this subject for 14 years at the WTO and are likely to keep up the fight for the foreseeable future.  Boeing is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.  Airbus is rated "Neutral" in our European Large-Cap Gobal Top Stock Ideas.  

Global Commodities & Power Stocks Trending in the News

  • South32 (ASX: S32) shares slipped after Goldman Sachs cut its rating for the stock to sell and set a price target of AUD$3.2/share, implying a 16% downside from the prior close. Goldman Sachs also cut its FY2019 and FY2020 EPS estimates by 3% and 9%, respectively, citing lower alumina prices and stronger FX. South32 is rated “Top Buy” in our Australia Large-Cap Global Top Stock Ideas.
  • United States Steel Corporation (X) shares slid today as Credit Suisse Group warned that the US steel manufacturer is vulnerable to an expected surge in steel supply. In a note to clients, Credit Suisse wrote that US Steel Corp., “is in a weaker competitive position versus peers entering the ‘Sheet Tsunami’ period in the US from 2021-2022.” Bank of America Merrill Lynch noted a similar concern for US Steel Corp. last month. US Steel Corp. is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.

Global Health Care Stocks Trending in the News

  • Cerner Corp. (CERN) shares surged after the company announced it reached an agreement with activist investment fund Starboard Value to add four new board members. Additionally, Cerner Corp. announced a USD$1.2bn stock buyback program and that the company will begin to pay a dividend. Cerner Corp. is rated “Neutral” in our US Large-Cap 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