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Morning Brief

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Global Stocks starting the week negative as Turkey economic crisis continues

Aug 13, 2018

US Stocks

  • Global stocks are beginning the week in the red with investor worries about a contagion effect from the economic crisis in Turkey spreading to other economies
  • The Turkish Lira is down 7.4% against the USD$ to TRY6.9387; the Lira has weakened 26.73% since the beginning of the economic crisis
  • US stocks index futures are pointing to a negative open to start the week with the Dow Jones minis -0.34%, S&P500 minis -0.29% and Nasdaq 100 minis -0.32%
  • The VIX is up this morning and is currently at 14.28 after closing at 12.70 last week
  • SPY August 17 OTM Calls, HYG September 21 & October 2018 OTM Calls, and EEM August 17 OTM Calls and are the most heavily traded options contracts in the US pre-market
  • US 10-Year Treasury Bonds are higher with yields down -1.63 basis points to 2.8569%
  • The US Treasury 2s-10s Spread has widened 0.02 basis points to 0.27%
  • WTI Crude is currently up 1.23% to USD$67.63/bbl with the Brent-WTI spread down USD$-1.52 to USD$4.22/bbl
  • Gold is currently down -0.88% to USD$1199.89/oz

International Stocks

  • European stocks are dropping to start the week with the economic crisis in Turkey continuing to weigh on investor sentiment
  • Investor sentiment for European stocks is negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.27x
  • VSTOXX, the European stocks equivalent of the VIX, is moving higher this morning and is currently at 16.27 after closing at 15.11 last week
  • EUR€ is currently down -0.333% against the USD$ to 1.1375
  • GBP£ is currently little changed against the USD$ at 1.2747
  • CHF is currently little changed against the USD$ at 1.0055
  • German 10-Year Bunds are higher with yields down -1.3 basis points to 0.304%
  • UK 10-Year GILTs are higher with yields down -1 basis points to 1.232%
  • Asian stocks closed their first trading session of the week negative as investor worries about a contagion effect from Turkey’s economic problems weighed on major stock exchanges across the region
  • The Nikkei 225 finished down -1.98%, the Hang Seng ended down -1.52%, the Hang Seng China Enterprise declined -1.61%, and the CSI 300 was -0.43%
  • After today’s 2.13% drop today, the Topix is the worst performing index among developed markets (in price return) YTD
  • Machinery (-3.54%), Marine Transportation (-3.37%), and Nonferrous Metals (-3.09%) stocks were the worst performers among Japanese stocks today
  • Investor sentiment for Japanese stocks finished negative with the advance/decline ratio for the Nikkei 225 closing at 0.04x
  • Investor sentiment for Hong Kong stocks finished negative with the advance/decline ratio for the Hang Seng closing at 0.04x
  • Japan 10-Year Government Bonds are flat with yields little changed 0 basis points to 0.101%
  • JGBs 2s-10s Spread has narrowed 0.2 basis points to 0.21%
  • JPY¥ is currently down 0.415% against the USD$ to 110.37

Cryptos

  • Bitmain’s upcoming IPO is coming under scrutiny as investors continue to worry about its long-term viability.  Specifically, there seem to be concerns about Bitmain’s reserve of Bitcoin Cash which is considered an illiquid position given the daily turnover in current Bitcoin Cash markets.
  • NewsBTC speculates whether Bitcoin is a better than fiat money after the 24-25% drop in the Turkish Lira the past week.  While Bitcoin has fallen more than the Lira over the past 12-month, Bitcoin users can still withdraw Bitcoin out of their accounts without any major issues.  
  • According to ICO Rating, 1 in 2 ICOs (55%) failed during C2Q2018.  In terms of returns, this translates to an average return of -55% in comparison to an average return of +50% in C1Q2018.  However, according to Michael Spencer, Editor of Future Sin, the deterioration of ICOs in C2Q2018 is related to the quality of the blockchain projects, not investor interest.  Business Insiders highlights that investments into ICOs were ~USD$8.3bn in C2Q2018 in comparison to USD$3.3bn in C1Q2018.
  • The Tokyo Stock Exchange (TSE) is publicly expressing concerns about the acquisition of Beat Holdings, listed on the TSE,  by Noah Ark Technologies, a Hong Kong-based cryptocurrency firm. The TSE concerns are related to management’s bias to stay away from the cryptocurrency sector.
  • The national government of Vietnam has decided to ban imports of cryptocurrency mining equipment.  According to the Ho Chi Minh City Customs Department, 3,664 ASIC devices were imported into the city in C1H2018.  The ban of cryptocurrency mining equipment is related to a government investigation into a ICO-fraud that scammed USD$660mm from 32,000 domestic investors.

S&P 500 Sector Performance

Data in Price Return as of Previous Day's EOD, Source: S&P Capital IQ

Russell 1000 Factor Performance

Data in Price Return as of Previous Day's EOD, Source: S&P Capital IQ

Stocks Trending in the News

Click name for Q-Factor rating and financial data.

  • Bank of East Asia (23 HK) closed down 5.8% after it was reported the stock will be cut from the Hang Send index.
  • Bayer (BAYN GR) is falling over 12% after its Monstanto unit suffered a US$289mm damages verdict in its first court case focused on the Roundup and allegations it causes cancer.  The case was in San Francisco.
  • Goldman Sachs (GS) ranks #1 in investment banking fees generated in Latin America this year, reaping the benefits of inreased investments in the region including a reopened office in Buenos Aires.
  • Google (GOOGL) is courting local players as it plans its expansion strategy in China. According to the WSJ, the company is trying to build the case that it is helping the Chinese economy with its efforts.
  • Neilsen (NLSN) now has activist fund Elliott Management as a shareholder with an 8% stake.  Press reports say the fund will push management to sell the company as it has been reported multiple private equity firms are interested in Nielsen.
  • Sino Bio Pharmaceutical (1177 HK) rallied over 4% in Monday trading after news that it will be included in the Hang Seng index
  • Tencent (700 K) was ordered by Chinese regulators to remove Monster Hinter: World which was just released by its Capcom Ltd (9697 JT) unit from Japan recently.  Regulators said the game failed to meet regulatory standards.  Capcom traded down 10% while Tencent was down 2.4%.
  • Tesla (TSLA) is in talk with the Saudi Public Investment Fund, the country’s sovereign wealth fund, to be part of an investor pool to finance Elon Musk’s plan to take the company private.  The Fund presently owns ~5% of Telsa.
  • VF Brands (VFC) announced it will split into 2 separate companies, VF Corp which will focus on global apparel and footware and a second still to be named company focused on its jeans and outlet business.  The company in targeting 1H19 for completion.

Cryptocurrencies Today

*Source: Stockdio

Stock Movers

Top Buy Winners and Losers

On Mobile/Tablet scroll to the right

WINNERS TICKER SECTOR INDUSTRY 1 DAY RETURN 5 DAY RETURN YTD
EXPRESS SCRIPTS HOLDING CO ESRX Health Care Health Care Providers & Services 2.2% 7.6% 10.6%
COSTAR GROUP INC CSGP Industrials Professional Services 1.35% 1.31% 36.75%
FORTINET INC FTNT Information Technology Software 0.99% 2.23% 52.92%
TJX COMPANIES INC TJX Consumer Discretionary Specialty Retail 0.89% 3.14% 28.1%
LIGAND PHARMACEUTICAL INC LGND Health Care Biotechnology 0.87% 7.43% 55.87%
LOSERS TICKER SECTOR INDUSTRY 1 DAY RETURN 5 DAY RETURN YTD
PG&E CORP PCG Utilities Electric Utilities -2.84% -0.68% -4.18%
BERRY GLOBAL GROUP INC BERY Materials Containers & Packaging -2.78% -2.68% -23.96%
JEFFERIES FINANCIAL GRP INC JEF Financials Diversified Financial Services -2.59% -3.49% -11.48%
SYSCO CORP SYY Consumer Staples Food & Staples Retailing -2.24% -0.13% 14.09%
VULCAN MATERIALS CO VMC Materials Construction Materials -2.15% -3.55% -17.22%

Source: S&P Capital IQ

Top Short Winners and Losers

On Mobile/Tablet scroll to the right

WINNERS TICKER SECTOR INDUSTRY 1 DAY RETURN 5 DAY RETURN YTD
SYNAPTICS INC SYNA Information Technology Semiconductors & Semiconductor Equipment -12.08% -12.68% 3.67%
PUMA BIOTECHNOLOGY INC PBYI Health Care Biotechnology -8.47% -7.43% -72.89%
AVALARA INC AVLR Information Technology Software -8.06% 13.22% -3.93%
GREENSKY INC GSKY Information Technology IT Services -7.83% -13.54% -46.3%
BRIGHTHOUSE FINANL INC BHF Financials Insurance -6.49% -9.15% -36.69%
LOSERS TICKER SECTOR INDUSTRY 1 DAY RETURN 5 DAY RETURN YTD
ACADIA PHARMACEUTICALS INC ACAD Health Care Biotechnology 7.01% -1.99% -71.27%
CARVANA CO CVNA Consumer Discretionary Specialty Retail 5.61% 18.17% 108.26%
ALLAKOS INC ALLK Health Care Biotechnology 4.33% -5.26% 21.95%
MURPHY OIL CORP MUR Energy Oil, Gas & Consumable Fuels 3.74% -5.48% -0.9%
BLOOM ENERGY CORP-REDH BE Industrials Electrical Equipment 3.42% 3.12% 10.07%

Source: S&P Capital IQ

Events Calendar

On Mobile/Tablet scroll to the right

Company Name Ticker Event Date Event Type Q-Factor Score
JinkoSolar Holding Co., Ltd. JKS 8/12/2018 Earnings Release Date China All-Cap: F
Vipshop Holdings Limited VIPS 8/13/2018 Earnings Release Date China All-Cap: C
YY Inc. YY 8/13/2018 Earnings Release Date China All-Cap: B
Sysco Corporation SYY 8/13/2018 Earnings Release Date US Large-Cap: A, US Consumer Staples: C
Seven Stars Cloud Group, Inc. SSC 8/13/2018 Earnings Release Date China All-Cap: F
GDS Holdings Limited GDS 8/13/2018 Earnings Release Date China All-Cap: C
Baozun Inc. BZUN 8/13/2018 Earnings Release Date China All-Cap: C
SORL Auto Parts, Inc. SORL 8/14/2018 Earnings Release Date China All-Cap: C
Advance Auto Parts, Inc. AAP 8/14/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: C
Tapestry, Inc. TPR 8/14/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: B
CDK Global, Inc. CDK 8/14/2018 Earnings Release Date US Large-Cap: A, US Information Technology: A
The Home Depot, Inc. HD 8/14/2018 Earnings Release Date US Large-Cap: A, US Consumer Discretionary: A
Array BioPharma Inc. ARRY 8/14/2018 Earnings Release Date US Large-Cap: F
Brinker International, Inc. EAT 8/14/2018 Earnings Release Date US Large-Cap: B, US Consumer Discretionary: A
Agilent Technologies, Inc. A 8/14/2018 Earnings Release Date US Large-Cap: C
Hollysys Automation Technologies Ltd. HOLI 8/14/2018 Earnings Release Date China All-Cap: B
Madrigal Pharmaceuticals, Inc. MDGL 8/14/2018 Estimated Earnings Release Date US Large-Cap: F
Yirendai Ltd. YRD 8/14/2018 Estimated Earnings Release Date China All-Cap: C
Xinyuan Real Estate Co., Ltd. XIN 8/15/2018 Earnings Release Date China All-Cap: F
Macy's, Inc. M 8/15/2018 Earnings Release Date US Large-Cap: B, US Consumer Discretionary: C
NetApp, Inc. NTAP 8/15/2018 Earnings Release Date US Large-Cap: B, US Information Technology: B

Source: S&P Capital IQ