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Global Stocks advancing despite escalating trade tensions between the US and China

Sep 18, 2018

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US Stocks

  • Global stocks are in the green this morning, as investors shrug off rising Sino-US trade tensions with the current escalation not as bad as initially feared 
  • US stocks index futures are pointing to a positive open in NY with the Dow Jones minis +0.21% S&P500 minis +0.19% and Nasdaq 100 minis +0.27% 
  • Officials from the Chinese Foreign and Commerce ministries say China has no choice but to retaliate against the US decision to institute 10% tariffs on USD$200bn in goods imported from China 
  • Bank of America is warning that US and Chinese tech stocks continue to be the MOST crowded trades, according to a recent investor survey.  Shorts on emerging markets stocks and longs on the US dollar are other very crowded trades. 
  • The VIX is little changed this morning and is currently at 13.2 after closing at 13.68 yesterday
  • Fortive Corp (FTV) October 18 OTM Calls & Puts, FXI November 2018 OTM Calls, Ford (F) January 2020 OTM Calls, SPY September 21 OTM Puts and EEM September 21 & November 2018 Puts are the most heavily traded options contracts in the US pre-market
  • The US Treasury 2s-10s Spread has widened 0.86 basis points to 0.22%
  • 10-Year Treasury Bonds are lower with yields up 1.29 basis points to 2.9996%
  • WTI Crude is currently little changed -0.12% to USD$68.91/bbl with the Brent-WTI spread up USD$1.33 to USD$9.9/bbl
  • Gold is currently little changed -0.16% to USD$1199.51/oz
  • Oil prices are stronger this AM following insinuations by OPEC that the group will not raise production targets to supplement the loss of supply from Iran -- Bloomberg is reporting that Saudi Arabian officials are allegedly comfortable with global oil prices above USD$80/bbl 
  • Gold prices are down this morning as it appears investors are favoring long US dollar positions to holding gold with the expectations that the US has less to lose from a Sino-US trade war than China

Stocks Trending in the News

Click name for Q-Factor score and financial data.

  • Autozone (AZO) reports earnings well below the lower-end of analyst forecasts though fiscal 4Q guidance is ahead of the Street. The stock is currently down 6.4% to USD$700.01 in pre-market trading.  Autozone is rated “Neutral” in our US Large-Cap Global Top Picks and “Attractive” in our US Consumer Discretionary Global Top Picks.
  • Bank of Baroda (BOB IN) will merge with 2 peers, Vijaya Bank and Dena Bank, according to press reports.  The move would be part of India’s attempts to clean up its banking sector.  Bank of Baroda fell 16% on the news.  Bank of Baroda is not rated in our Global Top Picks
  • Cathay Pacific (293 HK) reported a 0.8% jump on traffic in August taking its load factor to 87.1%.  Cathay said September traffic will be negatively affected by multiple typhoons.  Cathay Pacific is rated ‘Neutral’ in our China All-Cap Global Top Picks
  • China Resources Cement (1313 HK) rose 7.3% to HKD$9.24 on news that the Chinese government may stabilize investment with more measures.  This sent many construction related companies higher though the press report did not say where it got the information.  China Resources Cement is rated ‘Top Buy’ in our China All-Cap Global Top Picks
  • Ferrari (RACE) is resetting investor expectations this morning, reducing the CY2020 management goal of €2bn in EBITDA to a range of €1.8bn to €2.0bn.  The stock is currently up 0.31% to €113.30.  Ferrari is rated “Neutral” in our European Large-Cap Global Top Picks.
  • Geely (175 HK) was cut at Morgan Stanley to underweight from equalweight.  Morgan cited an inventory build-up as well as price competition as main reasons for the downgrade.   Geely closed down 3.9% at HKD$14.14.  Geely is rated ‘Attractive in our China All-Cap Global Top Picks
  • General Mills (GIS) reported F1Q2019 earnings of USD$0.71, ahead of consensus at USD$0.64.  Management reiterated their FY2019 outlook.  General Mills is rated "Attractive” in our US Large-Cap Global Top Picks and “Attractive” in our US Consumer Staples Global Top Picks.
  • Largan (3008 TT) fell 9.9% to TWD$3860 after Daiwa cut its price target on concern the high prices for the newest iPhones may affect shipments.  Daiwa cited lukewarm preorders as well.  Lagan is not rated on our Global Top Picks
  • Pandora (PNDORA DC) is trading 7.2% higher at 405 kronos on news that private equity firms are considering acquiring the company.  An Italian press report mentioned KKR and Bain Capital are possible suitors.  Pandora is rated ‘Unattractive’ in our European Large-Cap Global Top Picks
  • Tesco (TSCO LN) was reiterated as a buy at Jefferies with its note commenting that recent weakness should be used as a buying opportunity.  Tesco 1H18 results should be supportive when they are reported and should be supportive of the stock.  Tesco is rated ‘Attractive’ in our United Kingdom All-Cap Global Top Picks
  • TomTom NV (TOM2 AM) is down 24.72% to  €6.402 following news that the Rennault-Nissan-Mitsubishi auto manufacturer partnership may drop TomTom after disclosing they are in talks with Alphabet (GOOGL) to use the Android operating systems in their dashboards.  TomTom is rated “Attractive” in our European SMID-Cap Global Top Picks.
  • Zalando (ZAL GR) is trading down 11.2% at 36.99 euros after cutting its sales forecast for the second time in 6 weeks.  Zalando cited high temperatures over the summer forcing higher discount to attract customers to its site.  Zalando is rated ‘Neutral’ in our European SMID-Cap Global Top Picks

European Stocks

  • European stocks are advancing this AM, bouning back from a soft open as it is becoming clearer that escalating trade tensions with China may lead to a gradual increase in tariffs, not the 25% jump initially feared
  • The Euro Stoxx 600 is currently up +0.03%, the FTSE 100 is higher by +0.15%, the DAX has advanced +0.18%, and the CAC 40 has risen +0.18%
  • Deutsche Bank has upgraded its outlook for Italian stocks to “Neutral” after the group underperformed European stocks markets by 13% since hitting their CY2018 high in May 2018
  • Investor sentiment for European stocks is neutral with the advance/decline ratio for the Euro Stoxx 600 currently at 1.08x
  • Basic Resources (+1.05%), Automobiles & Parts (+0.71%), and Construction & Materials (+0.43%) stocks are the top performers in the Euro Stoxx 600 today
  • Retail (-0.36%), Personal & Household Goods (-0.25%), and Health Care (-0.23%) stocks are the worst performers in the Euro Stoxx 600 today
  • 46 stocks in the Euro Stoxx 600 are at 4-week highs while 79 stocks are at 4-week lows
  • 15 stocks in the Euro Stoxx 600 are overbought while 33 stocks are oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, is little changed this morning and is currently at 14.7 after closing at 14.57 yesterday
  • EUR€ is currently little changed against the USD$ at 1.168
  • GBP£ is currently little changed against the USD$ at 1.3138
  • CHF is currently little changed against the USD$ at 1.0397
  • German 10-Year Bunds are higher with yields down -0.4 basis points to 0.454%
  • UK 10-Year GILTs are higher with yields down -0.4 basis points to 1.532%

Asian Stocks

  • Asian stocks finished positive overnight, with Hong Kong and Chinese stocks shrugging off news that the US government will implement 10% tariffs against an additional USD$200bn in imports from China 
  • Infrastructure stocks in Hong Kong and Shanghai led an afternoon rally in the respective stocks exchanges as investors weighed the possibility of an additional stimulus from the Chinese government in the form of additional investment on tollways and bridges
  • The Nikkei 225 finished up +1.41%, the Hang Seng ended up +0.56%, the Hang Seng China Enterprise up +0.91%, and the CSI 300 was +2.01%
  • Investor sentiment for Japanese stocks finished positive with the advance/decline ratio for the Nikkei 225 closing at 15.07x
  • 52 stocks in the Nikkei 225 hit 4-week highs while 5 stocks reached 4-week lows
  • 20 stocks in the Nikkei 225 closed overbought while 5 stocks closed oversold according to the 16-day RSI Measure
  • Investor sentiment for Hong Kong stocks finished positive with the advance/decline ratio for the Hang Seng closing at 4x
  • 1 stocks in the Hang Seng hit 4-week highs while 0 stocks reached 4-week lows
  • 1 stocks in the Hang Seng closed overbought while 3 stocks closed oversold according to the 16-day RSI Measure
  • Japan 10-Year Government Bonds are higher with yields down -0.1 basis points to 0.117%
  • JGBs 2s-10s Spread has narrowed 0.2 basis points to 0.22%
  • JPY¥ is currently up +0.215% against the USD$ to 112.09

*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 272 9.43 1 24 0.17% 6.22%
Ford Motor Co 259 8.14 0 -7 0.53% -14.71%
Visa Inc 213 8.14 0 7 0.12% 3.32%
Netflix Inc 189 6.29 -3 -26 -1.25% 1.53%
Goldman Sachs Group Inc/The 179 6.43 -2 8 0.0% 7.08%

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 20 10 -1 -13 3.72% 1.1%
NVIDIA Corp 64 9.71 -7 -4 0.12% 0.5%
Verizon Communications Inc 77 9.43 -3 -16 0.0% 0.41%
Microsoft Corp 272 9.43 1 24 0.17% 6.22%
Oracle Corp 20 9.43 -8 -18 1.55% 1.79%

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 9.44 51.98% 12.1 69.05% 1.28 84.92% 3.88 96.03% 4.32 91.67%
QQQ 16.47 71.43% 17.4 75.4% 1.06 45.24% 4.98 87.7% 3.98 88.49%
IWM 12.41 38.69% 12.76 13.29% 1.03 22.22% 5.12 92.86% 2.11 44.05%
FEZ 15.17 75.2% 15.17 73.02% 1 25.4% 0.69 46.83% 0.26 44.05%
EEM 19.87 82.94% 20.73 91.27% 1.04 46.83% 1.05 51.59% 2.04 59.13%

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
EXPRESS SCRIPTS HOLDING CO ESRX Health Care Health Care Providers & Services 3.65% 5.48% 23.57%
NORTHROP GRUMMAN CORP NOC Industrials Aerospace & Defense 1.19% 2.3% 2.96%
SUN COMMUNITIES INC SUI Real Estate Equity Real Estate Investment Trusts (REITs) 1.15% 1.57% 13.23%
PPL CORP PPL Utilities Electric Utilities 0.89% 1.06% 3.85%
BERRY GLOBAL GROUP INC BERY Materials Containers & Packaging 0.76% 3.68% -16.61%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
KLX INC KLXI Industrials Aerospace & Defense -16.48% -16.48% -10.59%
HILL-ROM HOLDINGS INC HRC Health Care Health Care Equipment & Supplies -3.23% -2.66% 9.69%
COSTAR GROUP INC CSGP Industrials Professional Services -2.68% -2.9% 35.55%
MOODY'S CORP MCO Financials Capital Markets -2.59% -0.14% 19.88%
WEX INC WEX Information Technology IT Services -2.47% -1.2% 30.31%

Source: S&P Capital IQ, StockDio

Top Short Winners and Losers

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Winners Ticker Sector Industry 1D Return 5D Return YTD
REGENXBIO INC RGNX Health Care Biotechnology -14.34% -2.87% 70.53%
PUMA BIOTECHNOLOGY INC PBYI Health Care Biotechnology -6.37% -8.16% -74.24%
CREE INC CREE Information Technology Semiconductors & Semiconductor Equipment -5.36% -8.64% 4.74%
CARVANA CO CVNA Consumer Discretionary Specialty Retail -5.11% -12.48% 119.14%
TANDEM DIABETES CARE INC TNDM Health Care Health Care Equipment & Supplies -17.01% -13.53% 276.12%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
MOSAIC CO MOS Materials Chemicals 3.82% 5.43% 18.53%
TENABLE HOLDINGS INC TENB Information Technology Software 2.78% 6.98% 14.61%
FOCUS FINANCL PRTNR LLC-REDH FOCS Financials Capital Markets 2.15% -2.09% 20.34%
RANGE RESOURCES CORP RRC Energy Oil, Gas & Consumable Fuels 2.08% 9.88% -10.63%
LAREDO PETROLEUM INC LPI Energy Oil, Gas & Consumable Fuels 1.82% 7.87% -28.65%

Source: S&P Capital IQ, StockDio

Cryptos

  • The founder of the world’s second largest cryptocurrency exchange, OKEx, was allegedly detained in China in relation to suspected digital currency fraud last Tuesday, according to local news outlet Sina News. Founder Star Xu was arrested after investors in WFEE Coin, a company where Xu is a shareholder, complained to police about the company’s alleged fraudulent practices. OKEx saw an almost 3% drop in trading volume over the 24-hour period following Xu’s arrest.  
  • The founding partners behind the blockchain fund backed by the government of Chinese city, Hangzhou, are planning to release a stablecoin pegged to the Japanese Yen. Members of Xiong’An Blockchain Fund have already begun work on the project, according to founding partner Yao Yongjie. The fund hopes to roll out the stablecoin by the end of this year or early 2019.  
  • The President of the European Central Bank (ECB), Mario Draghi, said that the ECB, “has no plans” of issuing a unified digital currency, while speaking in front of European Parliament. In citing reasons for why the ECB will not issue a digital currency, Draghi said that an EU digital currency would put the ECB and private banks in direct competition and it would cause the ECB to take on substantial operational costs and risks.  
  • The Securities and Exchange Commision’s (SEC) chief accountant said, while speaking in front of the AICPA National Conference on Banks and Saving Institutions, that digital assets do not change the need for companies to report financial activities. Wesley Bricker went on to say that it was time the US get up to speed on cryptocurrencies and digital assets.  
  •  Sweden-based company, XBT Provider AB, will begin to list Bitcoin Exchange Traded Notes (ETN), according to Bloomberg. CEO Laurent Kssis said that clients have expressed interest in a number of cryptocurrency products in explaining the reasoning for XBT’s decision. XBT currently offers exchange traded products tracking Bitcoin and Ether in Sweden, however, the company is gearing up plans for expansion to other countries. 

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
FedEx Corporation FDX 9/17/2018 Earnings Release Date US Large-Cap: A, US Industrials: A
Oracle Corporation ORCL 9/17/2018 Earnings Release Date US Large-Cap: C, US Information Technology: B
Want Want China Holdings Limited SEHK:151 9/17/2018 Estimated Earnings Release Date China All-Cap: C
Cracker Barrel Old Country Store, Inc. CBRL 9/17/2018 Estimated Earnings Release Date US Large-Cap: A, US Consumer Discretionary: B
Nine Dragons Paper (Holdings) Limited SEHK:2689 9/17/2018 Earnings Release Date China All-Cap: C
Esprit Holdings Limited SEHK:330 9/17/2018 Earnings Release Date China All-Cap: D
General Mills, Inc. GIS 9/18/2018 Earnings Release Date US Large-Cap: B, US Consumer Staples: B
AutoZone, Inc. AZO 9/18/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: B
NWS Holdings Limited SEHK:659 9/18/2018 Earnings Release Date China All-Cap: C
Copart, Inc. CPRT 9/19/2018 Earnings Release Date US Large-Cap: B, US Industrials: B
Red Hat, Inc. RHT 9/19/2018 Earnings Release Date US Large-Cap: C, US Information Technology: C
Lennar Corporation LEN 9/19/2018 Estimated Earnings Release Date US Large-Cap: D, US Consumer Discretionary: D
Micron Technology, Inc. MU 9/19/2018 Earnings Release Date US Large-Cap: A, US Information Technology: A
New World Development Company Limited SEHK:17 9/19/2018 Earnings Release Date China All-Cap: C
Darden Restaurants, Inc. DRI 9/20/2018 Earnings Release Date US Large-Cap: B, US Consumer Discretionary: A
Thor Industries, Inc. THO 9/20/2018 Earnings Release Date US Large-Cap: D, US Consumer Discretionary: D
SIG plc SHI 9/20/2018 Earnings Release Date China All-Cap: B
Santana Minerals Limited SMI 9/21/2018 Estimated Earnings Release Date China All-Cap: C

Source: S&P Capital IQ