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Global Stocks declining as China prepares to ask the WTO for permission to impose trade sanctions on the US

Sep 11, 2018

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US Stocks

  • Global stocks are declining this morning, as China prepares to go to the WTO in its escalating trade dispute with the United States 
  • Reuters is reporting that China is looking for permission from the WTO to impose trade sanctions on the United States 
  • The last time China attempted this strategy in regards to duties applied to goods the US accused China of dumping into the US markets, the WTO sided with China against the United States 
  • US stocks index futures are pointing to a negative open in NY with the Dow Jones minis –0.37%, S&P500 minis –0.21% and Nasdaq 100 minis –0.20% 
  • The VIX is little changed this morning and is currently at 14.41 after closing at 14.16 yesterday
  • Chesapeake Energy (CHK) January 2020 OTM Calls, Petrobras ADR (PBR) January 2019 OTM Calls, Antero Resources (AR) January 2020 ORM Calls and Advanced Micro Devices (AMD) September 14 OTM Calls are the most heavily traded options contracts in the US pre-market 
  • Goldman Sachs is arguing investors should get long European volatility while shorting US volatility – the spread between the VStoxx and VIX is now close to zero
  • US 10-Year Treasury Bonds are lower with yields up 2.39 basis points to 2.95%
  • The US Treasury 2s-10s Spread has widened 0.73 basis points to 0.23%
  • WTI Crude is currently down -0.31% to USD$67.54/bbl with the Brent-WTI spread up USD$1.24 to USD$10.21/bbl
  • Gold is currently little changed -0.18% to USD$1193.75/oz

Stocks Trending in the News

Click name for Q-Factor score and financial data.

  • Apple (AAPL) is allegedly planning to introduce electronic sims (eSIMs) with its new iPhone lineup.  The technology behind eSIMs would permit users to seamlessly change phone carriers by changing settings on the iPhone.  Apple is little changed in pre-market trading this morning.  The stock is rated a “Top Buy” in our US Large-Cap Global Top Picks and “Attractive” in our US Information Technology Global Top Picks.
  • ArcelorMittal (MT NA) has raised its bid for Essar Steel India to 420bn rupees (USD$5.8bn) according to press reports.  As part of the deal Arcelor agreed to pay all of Essar’s outstanding debts. Arcelor is down 2.3% to 24.43 euros.  Arceleor is rated ‘Attractive’ in our European Large-Cap Global Top Picks.
  • Ashtead (AHT LN) delivered 1Q results above expectations and the stocks traded up 3.7% to 2364 pounds.   There was strength in its business in all regions.  Ashtead is rated ‘Top Buy; in our United Kingdom All-Cap Global Top Picks
  • Galaxy Entertainemnt (27 HK) was cut to sell by Deutsche Bank which cited VIP share losses it expects in the coming year.  It also expects less overall revenue for the sector in Macau.  Galaxy is down 5.7% at HKD$48.10.  Galaxy is rated ‘Attractive’ in our China All-Cap Global Top Picks
  • Signa Holding GmbH’s acquisition of Hudon’s Bay’s (TSX: HBC) Galeria Kaufhof is creating a German Department Store with EUR€5.4bn to better compete with Amazon.com (AMZN) expansion plans for Europe.  Hudson’s Bay is little changed in pre-market trading this AM and is not rated in our Canada All-Cap Global Top Picks. 
  • Pioneer (6773 JP) will receive ~60bn yen in financial support from Baring Private Equity Asia through a mixture investments and loans.  Baring will become its biggest shareholder.  Pioneer closed 3.2% higher at 129 yen.  Pioneer is rated ‘Top Buy’ in our Japan Large-Cap Global Top Picks
  • Renesas Electronics (6723 JP) will acquire Integrated Device Technology (IDTI) in a USD$6.7bn deal.  Renesas is the second biggest supplier of semiconductors used in cars and the acquisition will allow it to expand into other areas.  At $49 per the deal will be at a 16% premium to market price. Renesas closed up 4.4% at 754 yen.  Renesas is not rated in our Global Top Picks.  Integrated Device is rated ‘Neutral’ in our US Large-Cap and US Information Technology Global Top Picks.
  • SJM Holdings (SEHK: 880) was downgraded to “Sell” at Deutsche Bank after the investment bank cuts its outlook for Macau 2019 gross gaming revenue.  SJM closed down 6.44% to HKD6.97 and is a “Top Buy” in our China All-Cap Global Top Picks. 
  • A UK court has ruled that Sports Direct International (LSE:SPD) must have over financial documents as part of an investigation into its CY2016 results.  Sports Direct is down 3.05% to GBP3.48.  Sports Direct is “Neutral” in our United Kingdom All-Cap Global Top Picks. 
  • Tencent (700 HK) bought back shares for the second day on Monday, its first buy backs in over 4 years.  This has led to speculation there could be much more to come.  Tencent closed down 1.8% at HKD308.  Tencent is rated ‘Top Buy’ in our China All-Cap Global Top Picks
  • Yum China (YUMC) will not be acquired by a Chinese group after the initial offer from the group was rejected. The group cited a worsening of conditions as well as a reason for abandoning the deal.  Yum China is the USD$14bn operator of KFC in China.  Yum China is rated ‘Top Buy’ in our China All-Cap Global Top Picks
     

European Stocks

  • European stocks are declining to start the morning, following an article from Reuters that alleges that China is prepared to ask the WTO for permission to impose trade sanctions on the United States 
  • The Euro Stoxx 600 is currently down -0.29%, the FTSE 100 is down -0.57%, the DAX is down -0.49%, and the CAC 40 is down -0.15%
  • Oil & Gas (+0.34%), Health Care (+0.08%), and Financial Services (-0.06%) stocks are the top performers in the Euro Stoxx 600 today
  • Basic Resources (-0.98%), Automobiles & Parts (-0.84%), and Insurance (-0.79%) 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 0.45x
  • 40 stocks in the Euro Stoxx 600 are at 4-week highs while 86 stocks are at 4-week lows
  • 8 stocks in the Euro Stoxx 600 are overbought while 58 stocks are oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, is moving little changed this morning and is currently at 15.99 after closing at 15.89 last week
  • EUR€ is currently little changed against the USD$ at 1.1581
  • GBP£ is currently little changed against the USD$ at 1.3022
  • CHF is currently little changed against the USD$ at 1.0263
  • German 10-Year Bunds are lower with yields up 1.9 basis points to 0.42%
  • UK 10-Year GILTs are lower with yields up 2.8 basis points to 1.497%

Asian Stocks

  • Asian stocks closed mixed, with Japanese stocks advancing while Chinese/Hong Kong stocks finished in the red again 
  • The Nikkei 225 finished up +1.3%, the Hang Seng ended down -0.72%, the Hang Seng China Enterprise declined -0.96%, and the CSI 300 was -0.18%
  • Hong Kong stocks are formally in a technical “bear market” after dropping more than 20% since their January 2018 highs 
  • A weakening Yen continues to support Japanese stocks  
  • Investor sentiment for Japanese stocks finished positive with the advance/decline ratio for the Nikkei 225 closing at 2.46x
  • 16 stocks in the Nikkei 225 hit 4-week highs while 36 stocks reached 4-week lows
  • 7 stocks in the Nikkei 225 closed overbought while 18 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 0.43x
  • 1 stock in the Hang Seng hit 4-week highs while 20 stocks reached 4-week lows
  • 1 stock in the Hang Seng closed overbought while 8 stocks closed oversold according to the 16-day RSI Measure
  • Japan 10-Year Government Bonds are higher with yields down -0.3 basis points to 0.115%
  • JGBs 2s-10s Spread has narrowed 0.1 basis points to 0.22%

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

Stock Sentiment

Top Stocks by 7-day News Volume

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Name 7 Day News
Volume
7 Day Average
News Buzz
1M EPS Net
Revisions
3M EPS Net
Revisions
1M EPS
% Chg
3M EPS
% Chg
Microsoft Corp 216 3.14 2 25 0.13% 6.17%
Goldman Sachs Group Inc/The 211 4.57 2 9 0.0% 7.06%
Ford Motor Co 182 6 -7 -9 -0.59% -15.16%
Netflix Inc 158 4 -3 -25 -2.07% 1.53%
Visa Inc 139 5.86 10 6 -0.05% 3.31%

Note: Please see our General FAQs to learn how we define and measure News Volume

Top Stocks by 7-Day Average News Buzz

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Name 7 Day News
Volume
7 Day Average
News Buzz
1M EPS Net
Revisions
3M EPS Net
Revisions
1M EPS
% Chg
3M EPS
% Chg
FedEx Corp 15 7.43 -2 -11 0.0% -2.55%
Lockheed Martin Corp 37 7.29 11 13 0.13% 4.97%
Halliburton Co 16 6.29 -1 -21 -0.05% -13.58%
Verizon Communications Inc 45 6.14 -7 -16 0.0% 0.41%
Ford Motor Co 182 6 -7 -9 -0.59% -15.16%

Note: Please see our General FAQs to learn how we define and measure News Buzz

Implied Volatility Data For Liquid Macro Index ETFs

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ETF 30D IV 30D IV
Percentile
90D IV 90D IV
Percentile
90D/30D IV 90D/30D IV
Percentile
30D IV-
20D HV
30D IV-20D HV
Percentile
90D IV-
60D HV
90D IV-60D HV
Percentile
SPY 9.31 50.99% 11.7 65.08% 1.26 75.4% 2.62 81.75% 3.88 86.71%
QQQ 16.88 74.21% 17.59 77.78% 1.04 35.71% 6.52 97.22% 4.56 92.46%
IWM 11.91 30.56% 14.36 57.94% 1.21 92.46% 2.78 63.49% 3.65 76.19%
FEZ 16.27 84.52% 16.49 88.49% 1.01 25.0% 0.32 41.67% 1.39 52.38%
EEM 19.95 84.13% 20.69 90.48% 1.04 45.24% -1.64 27.78% 1.85 54.76%

Note: Please see our Options FAQs to learn more about Implied Volatility and other advanced options volatility measures

S&P 500 Sector Performance

*Data in Price Return as of Previous Day's EOD, Source: StockDio

Russell 1000 Factor Performance

*Data in Price Return as of Previous Day's EOD, Source: StockDio

Stock Movers From Our US Large-Cap Model

Top Buy Winners and Losers

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Winners Ticker Sector Industry 1D Return 5D Return YTD
BROADCOM INC AVGO Information Technology Semiconductors & Semiconductor Equipment 3.39% 9.4% -9.03%
FORTINET INC FTNT Information Technology Software 2.69% 4.77% 68.35%
VERISIGN INC VRSN Information Technology Internet Software & Services 2.35% 1.84% 38.92%
HOME DEPOT INC HD Consumer Discretionary Specialty Retail 2.14% 4.82% 13.01%
ADOBE SYSTEMS INC ADBE Information Technology Software 1.71% 0.7% 40.1%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
TORCHMARK CORP TMK Financials Insurance -4.55% -4.01% -6.03%
ANTHEM INC ANTM Health Care Health Care Providers & Services -3.48% -0.54% 15.93%
VULCAN MATERIALS CO VMC Materials Construction Materials -3.32% -3.3% -20.02%
UNITEDHEALTH GROUP INC UNH Health Care Health Care Providers & Services -3.24% -2.97% 17.09%
MARTIN MARIETTA MATERIALS MLM Materials Construction Materials -2.96% -4.2% -15.97%

Source: S&P Capital IQ, StockDio

Top Short Winners and Losers

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Winners Ticker Sector Industry 1D Return 5D Return YTD
ALLAKOS INC ALLK Health Care Biotechnology -8.16% 10.06% 31.8%
BLOOM ENERGY CORP-REDH BE Industrials Electrical Equipment -5.13% -3.05% 15.01%
CREE INC CREE Information Technology Semiconductors & Semiconductor Equipment -3.34% -9.84% 13.38%
CALIFORNIA RESOURCES CORP CRC Energy Oil, Gas & Consumable Fuels -3.05% -14.9% 58.24%
AGIOS PHARMACEUTICALS AGIO Health Care Biotechnology -2.93% -8.11% 21.84%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
CARVANA CO CVNA Consumer Discretionary Specialty Retail 10.46% 5.32% 131.62%
SANGAMO THERAPEUTICS INC SGMO Health Care Biotechnology 6.34% -21.97% -18.06%
ROKU INC ROKU Consumer Discretionary Household Durables 5.2% 14.41% 27.73%
TENABLE HOLDINGS INC TENB Information Technology Software 4.48% -1.55% 7.63%
GREENSKY INC GSKY Information Technology IT Services 4.28% -2.1% -22.24%

Source: S&P Capital IQ, StockDio

Cryptos

  • According to a person familiar with the company, Nasdaq is preparing to add tools for predicting price movements of crypto assets to its Analytics hub. The U.S. stock exchange’s Analytics hub was launched last year and leverages machine learning and natural language processing capabilities to comb through social media and other alternative data sources. 
  • A Canadian Bitcoin fund, First Block Capital, Inc., has obtained mutual fund trust status that allows investors to deposit funds into self-directed registered accounts. This newly obtained status will allow investors to place crypto holdings in accounts such as Registered Retirement Savings Plans and Tax-Free Savings Accounts. Currently, the fund is only available to accredited investors.  
  • China’s Ministry of Civil Affairs released an action plan on Monday that outlines plans to implement blockchain solutions in upgrading  the current charity tracking system by 2020’s end. The Chinese government organization hopes that blockchain could help to establish more trust in the sector.  
  • Ethereum developers and miners are heading towards a conflictr ahead of the Constantiople software upgrade in October 2018.  The new upgrades will drop the amount paid to miners from 3 ETH to 2 ETH per block mined.  While the absolute amount is not significant, the costs of the mining ASICs mining hardware combined with the fact that 6,000 ETH blocks are “mined” per day, the loss of income to miners could be siginificant. 
  • According to Valdis Dombrowski, Vice President of the European Commission for digital currencies, cryptocurrencies are here to stay and regulators should focus on helping to build a healthy and transparent marketplaces for the emerging asset class.  Notably, Dombrowski believes ICOs are a legitimate form of alternative financing and expects capital raised through ICOs to exceed the USD$6bn raised in CY2017. 
  • Bloomberg is reporting that ICOs are experiencing their biggest slump in 16 months.  In August 2018, ICOs raised a paltry USD$326mm, the smallest amount since May 2017. 
  • The International Monetary Fund (IMF) advised against the introduction of cryptocurrency as a legal tender in the Republic of the Marshal Islands. The Republic of the Marshall Islands passed a law concerning allowing cryptos to be legal tender this past February, citing a way to boost their local economy while becoming more connected with the global economy.  
  • Ripple Labs, Inc. announced on Monday that it has reached a settlement of ‘all outstanding litigation’ between itself, R3 HoldCo, R3, and XRP II. The legal dispute between the three entities began in September 2017 when R3 claimed Ripple had violated a previously agreed upon purchase agreement between the two companies for XRP tokens. Included in the agreement was an option enabling R3 to buy up to 5 billion XRP tokens at a price of $0.0085 before the end of 2019. 

Cryptocurrencies Today

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

Events Calendar

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Company Name Ticker Event Date Event Type Q-Factor Score
Sonos, Inc. SONO 9/9/2018 Earnings Release Date US Large-Cap: F
Casey's General Stores, Inc. CASY 9/10/2018 Estimated Earnings Release Date US Large-Cap: D
Want Want China Holdings Limited SEHK:151 9/10/2018 Estimated Earnings Release Date China All-Cap: C
Vitasoy International Holdings Limited SEHK:345 9/10/2018 Estimated Earnings Release Date China All-Cap: A
Bosideng International Holdings Limited SEHK:3998 9/10/2018 Estimated Earnings Release Date China All-Cap: B
Freeman FinTech Corporation Limited SEHK:279 9/11/2018 Estimated Earnings Release Date China All-Cap: F
Luk Fook Holdings (International) Limited SEHK:590 9/11/2018 Estimated Earnings Release Date China All-Cap: A
Tailored Brands, Inc. TLRD 9/12/2018 Earnings Release Date US Large-Cap: D
Pivotal Software, Inc. PVTL 9/12/2018 Earnings Release Date US Large-Cap: F
Adobe Systems Incorporated ADBE 9/12/2018 Estimated Earnings Release Date US Large-Cap: A
Sun Hung Kai Properties Limited SEHK:16 9/12/2018 Earnings Release Date China All-Cap: C
China South City Holdings Limited SEHK:1668 9/12/2018 Estimated Earnings Release Date China All-Cap: C
Union Medical Healthcare Limited SEHK:2138 9/12/2018 Estimated Earnings Release Date China All-Cap: A
China Water Affairs Group Limited SEHK:855 9/12/2018 Estimated Earnings Release Date China All-Cap: A
Shunten International (Holdings) Limited SEHK:932 9/12/2018 Estimated Earnings Release Date China All-Cap: F
The Kroger Co. KR 9/13/2018 Earnings Release Date US Large-Cap: D

Source: S&P Capital IQ