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Morning Brief

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Global Stocks declining on worries about Turkey and an economic slowdown in China

Aug 15, 2018

US Stocks                                                                                                                                                                           Start Your Free Trial Today

  • Global stocks are declining today after yesterday’s relief rally as investors shift their focus back to the potential deceleration in the Chinese economy and a contagion effect on other emerging markets from the Turkish Economic crisis
  • US stocks index futures a negative open with the Dow Jones minis -0.57%, S&P500 minis -0.54% and Nasdaq 100 minis -0.69%
  • The VIX is little changed this morning and is currently at 14.23 after closing at 13.31 yesterday
  • SPY August 17 OTM Puts, General Electric (GE) October 18 OTM Puts, Bank of America (BAC) August 17 OTM Calls and EEM September 21 OTM Calls & Puts are the most heavily traded options contracts in the US pre-market
  • US 10-Year Treasury Bonds are higher with yields down -3.07 basis points to 2.8678%
  • The US Treasury 2s-10s Spread has narrowed 0.6 basis points to 0.26%
  • WTI Crude is currently little changed -0.24% to USD$67.04/bbl with the Brent-WTI spread little changed USD$-0.19 to USD$4.02/bbl
  • Gold is currently down -0.77% to USD$1184.88/oz

European Stocks

  • European stocks are declining this morning after opening flat with continued worries about the Turkish economic crisis and a stronger USD$ 
  • The Euro Stoxx 600 is currently down -0.95%, the FTSE 100 is down -1.12%, the DAX is down -1.14%, and the CAC 40 is down -1.16%
  • Basic Resources (-2.78%), Automobiles & Parts (-1.22%), and Telecommunications (-1%) stocks are the worst performers in the Euro Stoxx 600 today
  • Investor sentiment for European stocks is negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.2x
  • 45 stocks in the Euro Stoxx 600 are at 4-week highs while 78 stocks are at 4-week lows
  • 24 stocks in the Euro Stoxx 600 are overbought while 27 stocks are oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, is moving moving up this morning and is currently at 16.92 after closing at 15.86 last week
  • EUR€ is currently down -0.291% against the USD$ to 1.1311
  • GBP£ is currently down -0.196% against the USD$ to 1.2698
  • CHF is currently down -0.318% against the USD$ to 1.0026
  • German 10-Year Bunds are higher with yields down -1.8 basis points to 0.309%
  • UK 10-Year GILTs are higher with yields down -2.6 basis points to 1.237%

Asian Stocks

  • Asian stocks closed negative with weak investor sentiment combined with weak earnings from Tencent (SEHK: 700) weighing on stocks
  • Disappointing earnings reports from leading tech stocks has renewed investor concern about the possible deceleration in Chinese economy and the impact from US trade tarriffs
  • Hong Kong Monetary Authority intervened in the exchange rate for the HKD$ for the first time in 3-months, pegging the HKD$ to USD$ at HKD7.75.
  • The Nikkei 225 finished down --0.68%, the Hang Seng ended down -1.55%, the Hang Seng China Enterprise declined -1.95%, and the CSI 300 was -2.4%
  • The Hang Seng China Enterprise index was down for the fourth trading day in a row following disappointing earnings from Tencent (SEHK: 700)
  • Pulp And Paper (-1.98%), Glass & Ceramics Products (-1.79%), and Metal Products (-1.69%) 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 0.36x
  • 4 stocks in the Nikkei 225 hit 4-week highs while 29 stocks reached 4-week lows
  • 0 stocks in the Nikkei 225 closed overbought while 11 stocks closed oversold according to the 16-day RSI Measure
  • Investor sentiment for Hong Kong stocks finished negative with the advance/decline ratio for the Hang Seng closing at 0.19x
  • 2 stocks in the Hang Seng hit 4-week highs while 10 stocks reached 4-week lows
  • 0 stocks in the Hang Seng closed overbought while 5 stocks closed oversold according to the 16-day RSI Measure
  • JPY¥ is currently little changed against the USD$ at 111.02

Cryptos

  • Coinbase, according to CEO and co-Founder Brian Armstrong in an interview with Bloomberg, is adding 50k new users a day.  Assuming this run-rate, it implies Coinbase will add 350k new users a year.
  • Joe Lubin, the co-founder of Ethereum and ConsenSys, does not see the recent sell-off in cryptocurrencies constraining growth of the crypto ecosystem.  In an interview with Bloomberg, Lubin suggested the recent run-up in cryptocurrency valuations is similar the previous six bubbles with each bubble more pronounced than the previous.  
  • After announcing that the Petro is now the second official currency of Venezuela, Venezuelan Nicolás Maduro announcesd that the Petro will be used to pay salaries of employess at state-owned oil company PDVSA.  

*Data in Total Return; Source: S&P Capital IQ

S&P 500 Sector Performance

Data in Total 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.

  • Berkshire Hathaway (BRK.A) has acquired $60 million worth of Teva Pharmaceutical (TEVA) stock, following a recent sell-off of the company. Berkshire now owns a 4.3% stake in Teva Pharmaceuticals
  • China Lodging (HTHT, ADR) announced it will acquire 71.2% of Blossom Hill Hotel Investment Management for 463mn yuan, taking its stake to a total of 82.5%.
  • China Unicom (SEHK:762) reported 1H2018 net income that was higher than expected (¥149.1bn vs ¥140.40bn projected), and 1H2018 net income that also beat the consensus ((¥5.91bn vs ¥2.42 bn)
  • Goldman Sachs (GS) shareholders have won a ruling which will allows them to file a $13 billion class action suit against the firm, claiming that Goldman Sachs defrauded them by failing to disclose conflicts of interest related to risky mortgage investments sold during the financial crisis
  • Naspers (NPN SJ) is trading over 10% down on the Tencent earnings miss as they own 31% of Tencent (700 HK).
  • RBS (RBS LN) declared an interim dividend of 2 pence per share after the US Justice Dept announced a final US$4.9bn settlement with RBS, confirming an earlier tentative deal that had been announced.
  • Sunny Optical (2382 HK) raised handset lens growth target for 2018 to 45-50% up from 30-35%, handset camera module growth was hiked to 20% up from 15-20%.  Despite the improved guidance the stock is down 2% after losing 28% yesterday.
  • Tencent (700 HK) posted 2Q18 net income of 17.9bn yuan while 19.3bn was expected on revenue of 73.68bn yuan versus 77.66bn expected; net income unexpectedly fell 3%.  Profitability of the gaming unit was weak as Chinese regulators suspended approval of all new games.
  • Verizon (VZ) has signed both Google (GOOGL) and Apple (AAPL) as the first video providers on its soon to be launched new 5G service. As part of the deal subscribers will receive an Apple TV or YouTube TV subscription as part of their TV 5G subscription.
  • Vestas Wind Systems (VWS DC) was trading up the most in over 2 years after announcing a share buyback and posting strong order growth in its wind turbine business.

Cryptocurrencies Today


*Source: Stockdio

Stock Movers From Our US Large-Cap Model

Top Buy Winners and Losers

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WINNERS TICKER SECTOR INDUSTRY 1 DAY RETURN 5 DAY RETURN YTD
WALGREENS BOOTS ALLIANCE INC WBA Consumer Staples Food & Staples Retailing 3.23% 2.37% -7.58%
EPAM SYSTEMS INC EPAM Information Technology IT Services 2.77% 0.52% 19.63%
BB&T CORP BBT Financials Banks 2.62% 1.07% 5.98%
DOLLAR GENERAL CORP DG Consumer Discretionary Multiline Retail 2.53% 4.06% 11.97%
DUNKIN' BRANDS GROUP INC DNKN Consumer Discretionary Hotels, Restaurants & Leisure 2.41% 1.99% 10.81%

 

LOSERS TICKER SECTOR INDUSTRY 1 DAY RETURN 5 DAY RETURN YTD
CDK GLOBAL INC CDK Information Technology Software -3.34% -2.93% -12.98%
BROADCOM INC AVGO Information Technology Semiconductors & Semiconductor Equipment -1.81% -6.09% -23.94%
HOME DEPOT INC HD Consumer Discretionary Specialty Retail -0.54% -2.02% 3.78%
TYSON FOODS INC  -CL A TSN Consumer Staples Food Products -0.5% -0.5% -29.4%
CHURCH & DWIGHT INC CHD Consumer Staples Household Products -0.4% -1.43% 12.8%

Source: S&P Capital IQ

Top Short Winners and Losers

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WINNERS TICKER SECTOR INDUSTRY 1 DAY RETURN 5 DAY RETURN YTD
AVALARA INC AVLR Information Technology Software -6.66% -15.83% -20.23%
PORTOLA PHARMACEUTICALS INC PTLA Health Care Biotechnology -5.45% -36.1% -62.04%
ARRAY BIOPHARMA INC ARRY Health Care Biotechnology -2.63% -5.72% 5.18%
TENABLE HOLDINGS INC TENB Information Technology Software -2.07% 5.13% 8.7%
PDC ENERGY INC PDCE Energy Oil, Gas & Consumable Fuels -1.9% -3.03% 0.42%

 

LOSERS TICKER SECTOR INDUSTRY 1 DAY RETURN 5 DAY RETURN YTD
DYCOM INDUSTRIES INC DY Industrials Construction & Engineering 7.74% -19.17% -41.66%
PENNEY (J C) CO JCP Consumer Discretionary Multiline Retail 7.06% 9.53% -28.2%
GREENSKY INC GSKY Information Technology IT Services 5.96% -20.6% -47.59%
TANDEM DIABETES CARE INC TNDM Health Care Health Care Equipment & Supplies 5.58% 8.6% 257.97%
GAP INC GPS Consumer Discretionary Specialty Retail 4.86% 6.28% -1.94%

Source: S&P Capital IQ

Events Calendar

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Company Name Ticker Event Date Event Type Q-Factor Score
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
Dillard's, Inc. DDS 8/15/2018 Estimated Earnings Release Date US Large-Cap: C, US Consumer Discretionary: C
Towngas China Company Limited SEHK:1083 8/15/2018 Earnings Release Date China All-Cap: B
Youyuan International Holdings Limited SEHK:2268 8/15/2018 Estimated Earnings Release Date China All-Cap: C
Longfor Group Holdings Limited SEHK:960 8/15/2018 Estimated Earnings Release Date China All-Cap: C
Nordstrom, Inc. JWN 8/15/2018 Earnings Release Date US Large-Cap: B, US Consumer Discretionary: B
The Children's Place, Inc. PLCE 8/15/2018 Estimated Earnings Release Date US Large-Cap: D, US Consumer Discretionary: C
Applied Materials, Inc. AMAT 8/15/2018 Estimated Earnings Release Date US Large-Cap: C, US Information Technology: C
China Suntien Green Energy Corporation Limited SEHK:956 8/15/2018 Estimated Earnings Release Date China All-Cap: B
Immunomedics, Inc. IMMU 8/15/2018 Estimated Earnings Release Date US Large-Cap: F
China Resources Gas Group Limited SEHK:1193 8/15/2018 Estimated Earnings Release Date China All-Cap: B
Road King Infrastructure Limited SEHK:1098 8/16/2018 Earnings Release Date China All-Cap: B
Aluminum Corporation of China Limited SEHK:2600 8/15/2018 Earnings Release Date China All-Cap: D
Aluminum Corporation of China Limited ACH 8/15/2018 Earnings Release Date China All-Cap: D
China Travel International Investment Hong Kong Limited SEHK:308 8/15/2018 Earnings Release Date China All-Cap: A
Agritrade Resources Limited SEHK:1131 8/15/2018 Estimated Earnings Release Date China All-Cap: B
China Resources Power Holdings Company Limited SEHK:836 8/15/2018 Earnings Release Date China All-Cap: B
Crystal International Group Limited SEHK:2232 8/15/2018 Earnings Release Date China All-Cap: D
JD.com, Inc. JD 8/15/2018 Earnings Release Date China All-Cap: D
RISE Education Cayman Ltd REDU 8/16/2018 Earnings Release Date China All-Cap: C
21Vianet Group, Inc. VNET 8/16/2018 Earnings Release Date China All-Cap: C
Walmart Inc. WMT 8/16/2018 Earnings Release Date US Large-Cap: C, US Consumer Staples: B
58.com Inc. WUBA 8/16/2018 Earnings Release Date China All-Cap: B
J. C. Penney Company, Inc. JCP 8/16/2018 Earnings Release Date US Large-Cap: F, US Consumer Discretionary: F
The Madison Square Garden Company MSG 8/16/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: B
NVIDIA Corporation NVDA 8/16/2018 Earnings Release Date US Large-Cap: B, US Information Technology: B
Powerlong Real Estate Holdings Limited SEHK:1238 8/16/2018 Estimated Earnings Release Date China All-Cap: C
Cowell e Holdings Inc. SEHK:1415 8/16/2018 Estimated Earnings Release Date China All-Cap: C
Champion Real Estate Investment Trust SEHK:2778 8/16/2018 Estimated Earnings Release Date China All-Cap: C
We Solutions Limited SEHK:860 8/16/18 Estimated Earnings Release Date China All-Cap: F
Cree, Inc. CREE 8/16/18 Estimated Earnings Release Date US Large-Cap: F, US Information Technology: D
Colour Life Services Group Co., Limited SEHK:1778 8/16/18 Estimated Earnings Release Date China All-Cap: A
China Aoyuan Property Group Limited SEHK:3883 8/16/18 Earnings Release Date China All-Cap: C
China Railway Signal & Communication Corporation Limited SEHK:3969 8/16/18 Estimated Earnings Release Date China All-Cap: B
Deere & Company DE 8/16/18 Earnings Release Date US Large-Cap: C, US Industrials: C

Source: S&P Capital IQ