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Global stocks declining after Italian coalition government targets CY2019 budget deficit of 2.4%

Sep 28, 2018

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US Stocks

  • Global stocks are declining this AM to end a volatile 3Q, with rising political risk in the Eurozone spooking investors ahead of important economic data releases in the US 
  • US stocks index futures are dropping this morning, pointing to a negative open in NY with the Dow Jones minis –0.26% S&P500 minis –0.23% and Nasdaq 100 minis –0.26% 
  • Investors/Traders will be closely following the 8:30am release of August Personal Income (forecast of +0.4%), Personal Spending (forecast of +0.3%), and PCE Deflator (forecast of +2.2% Y/Y and +.01% M/M) 
  • According to analysis by Jefferies, investors have been putting more money into money markets and emerging markets debt at the expense of developed-market stocks and government bonds 
  • The VIX is little changed this morning and is currently at 12.76 after closing at 12.41 yesterday
  • American Airlines Group (AAL) October 19 OTM Puts, News Corp (NWSA) November 16 OTM Puts, SPY September 28 OTM Calls & Puts, and EEM September 28 OTM Calls are the most heavily traded options contracts in the US pre-market
  • US 10-Year Treasury Bonds are higher with yields down -2.04 basis points to 3.0314%
  • The US Treasury 2s-10s Spread has narrowed 0.42 basis points to 0.22%
  • WTI Crude is currently up 0.77% to USD$72.12/bbl with the Brent-WTI spread down USD$-0.5 to USD$9.56/bbl
  • Gold is currently little changed 0.12% to USD$1184.28/oz
  • Oil prices are set to end the week with the third consecutive weekly advance, the best run is 4 months
  • Total SA (FP FR) CEO Patrick Pouyanne, during an interview with Bloomberg this AM, believes supply losses in Iran and declining production outputs from Venezuela will send global crude prices to USD$100 in CY2019

Stocks Trending in the News

Click name for Q-Factor score and financial data.

  • BASF (BAS GR) lowered its profit outlook to reflect the planned merger of its oil and gas unit with Mikhail Fridman’s operations.  BASF now expects a “slight decline” in earnings before interest and taxes, this was revised from “slight increase”.  The new unit will be called Wintershall DEA and is planned for an IPO.  BASF is 2.6% lower at 76.26 euros.
  • Boeing (BA) 787s with Rolls-Royce (RR LN) engines are being grounded due to the engines wearing faster than expected.  Inspections are showing wear on the fan blades and there are  about 120 of these engines in planes today.   There are presently 40 grounded.  Rolls-Royce is trading 2.9% higher at 994.40 pence.   Rolls-Royce is rated ‘Top Short’ in our United Kingdom Global Top Picks.  Boeing is rated ‘Top Buy’ in our US Large-Cap Global Top Picks and ‘Attractive’ in our US Industrials Global Top Picks
  • EasyJet (EZJ LN) increased its expected fuel bill for this fiscal year, adding ~100mm pounds for a total that could reach 1.48bn pounds.  The company expects capacity to grow by roughly 10% and tightened its expected pretax profit to 570-580mm pounds.  EasyJet is falling 2.3% at 1295 pence and is rated ‘Neutral’ in our United Kingdom All-Cap Global Top Picks
  • EDP (EDP PL) lowered its profit outlook after the government of Portugal decided there was 285mn euros in overcompensation related to the availability of its power plants.  This will cost EDP to post a loss for the first time since its IPO.  This is a one time charge that will not affect its dividend policy.    EDP is rated ‘Attractive’ in our European SMID-Cap Global Top Picks
  • Honda (7267 JP) is recalling 232,000 Accord and Insight models according the National Traffic Safety Administration.  The rear-view cameras on the vehicles can malfunction under certain scenarios and need to be replace.  Honda closed up 0.94% at 3439 yen despite the news.  Honda is rated ‘Top Buy’ in our Japan Large-Cap Global Top Picks.  
  • RSA Insurance (RSA LN) shares are trading 9.6% lower after issuing a profit warning today.  RSA said unfavorable weather this past summer adversely affected results with dry, hot weather increasing claims.  RSA is rated ‘Unattractive’ in our United Kingdom All-Cap Global Top Picks
  • Softbank (9984 JP), KKR (KKR) and General Atlantic plan to make an large investment in Bytedance, the fast growing Chinese internet player according to a report in Bloomberg.  If confirmed the investment could value to company at USD$75bn making it the world’s biggest startup.  Previously reports indicated Bytedance is seeking up to USD$3bn.  Softbank closed 4.6% higher at 11470 yen and is rated ‘Attractive’ in our Japan Large-Cap Global Top Picks.  KKR is rated ‘Neutral’ in our US Large-Cap Global Top Picks
  • Sony (6758 JP) shares closed 4.5% higher at 6966 yen after it announced it enabled cross play of Fortnite between PS4, Xbox One, Switch and PCs in an “extended open beta”.  It plans to eventually have cross-play in a variety of games.  Users have been demanding this functionality and Sony is finally delivering.  Sony is rated ‘Neutral’ in our Japan All-Cap Global Top Picks
  • Tesla (TSLA) shares traded 12% lower in post-market trading after the SEC announced it is suing CEO Elon Musk for false and misleading statements related to his tweets about taking the company private.  The SEC is seeking to remove Musk as CEO and levy significant fines on him.  Tesla is rated ‘Unattractive’ in our US Large-Cap and US Consumer Discretionary Global Top Picks 
     

European Stocks

  • European stocks are declining on the last day of trading for 3Q over political concerns in Italy 
  • The Italian coalition government has set a budget deficit goal of 2.4% of GDP for CY2019 – market expectations were for 1.9%
  • Investors were dumping Italian bonds in the wake of the deficit target announcement with the yield on its 10-year bond rising over 30 basis points to 3.192%
  • The Euro Stoxx 600 is currently down -0.74%, the FTSE 100 has declined -0.53%, the DAX has fallen -1.46%, and the CAC 40 is lower by -0.78%
  • The sell-off in Italian stocks is the worst decline in almost 2 years
  • Investor sentiment for European stocks is negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.24x
  • Health Care (+0.35%), Food & Beverage (+0.33%), and Travel & Leisure (+0.2%) stocks are the top performers in the Euro Stoxx 600 today
  • Banks (-3.05%), Insurance (-2.03%), and Automobiles & Parts (-1.39%) stocks are the worst performers in the Euro Stoxx 600 today
  • 75 stocks in the Euro Stoxx 600 are at 4-week highs while 63 stocks are at 4-week lows
  • 41 stocks in the Euro Stoxx 600 are overbought while 22 stocks are oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, is moving up this morning and is currently at 14.67 after closing at 13.17 yesterday
  • EUR€ is currently down -0.447% against the USD$ to 1.1589
  • GBP£ is currently down -0.214% against the USD$ to 1.3051
  • CHF is currently up +0.156% against the USD$ to 1.0249
  • German 10-Year Bunds are higher with yields down -7 basis points to 0.459%
  • UK 10-Year GILTs are higher with yields down -4.7 basis points to 1.551%

Asian Stocks

  • Asian stocks ended the quarter on a positive note overnight while Chinese and Hong Kong stocks finished 3Q with the third consecutive quarterly decline 
  • Japanese stocks are nearing a 27-year high as export-sensitive stocks are benefitting from a strong USD$ and a resilient US economy 
  • The Nikkei 225 finished up +1.36%, the Hang Seng ended up +0.26%, the Hang Seng China Enterprise up +0.72%, and the CSI 300 was +1.04%
  • Investor sentiment for Japanese stocks finished positive with the advance/decline ratio for the Nikkei 225 closing at 5.25x
  • 68 stocks in the Nikkei 225 hit 4-week highs while 2 stocks reached 4-week lows
  • 54 stocks in the Nikkei 225 closed overbought while 0 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 1.08x
  • 3 stocks in the Hang Seng hit 4-week highs while 0 stocks reached 4-week lows
  • 0 stocks in the Hang Seng closed overbought while 0 stocks closed oversold according to the 16-day RSI Measure
  • Japan 10-Year Government Bonds are lower with yields up 1 basis points to 0.13%
  • JGBs 2s-10s Spread has widened 0.7 basis points to 0.24%
  • JPY¥ is currently little changed against the USD$ at 113.41

*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
Alphabet Inc 2009 8.43 0 5 2.65% 2.36%
Netflix Inc 1114 8.29 -4 -18 0.1% 0.86%
Comcast Corp 1052 6.86 2 11 0.25% 4.79%
Microsoft Corp 860 5.57 3 29 0.19% 7.15%
Ford Motor Co 805 7.86 -1 -18 -0.37% -10.3%

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
United Parcel Service Inc 19 9.43 2 3 -0.13% 1.96%
PepsiCo Inc 128 9.43 0 6 -0.29% 1.91%
Costco Wholesale Corp 58 9 7 11 0.11% 0.48%
QUALCOMM Inc 261 8.71 4 19 -0.69% 17.16%
Merck & Co Inc 81 8.71 -1 13 -0.33% 3.06%

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 8.93 42.06% 11.63 60.32% 1.3 88.89% 3.09 84.92% 4.39 92.06%
QQQ 13.59 40.48% 15.76 54.56% 1.16 81.55% 2.43 63.1% 3.62 81.35%
IWM 12.3 35.12% 12.88 14.68% 1.05 33.53% 4.45 87.7% 2.95 59.92%
FEZ 13.27 57.94% 14.18 60.32% 1.07 47.22% -0.71 34.52% -0.56 34.92%
EEM 17.02 55.16% 18.63 69.25% 1.09 73.02% 0.02 46.03% 0.45 44.05%

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
FORTINET INC FTNT Information Technology Software 2.44% 6.82% 72.71%
LIGAND PHARMACEUTICAL INC LGND Health Care Biotechnology 1.81% 6.11% 68.14%
HILL-ROM HOLDINGS INC HRC Health Care Health Care Equipment & Supplies 1.61% 1.81% 10.56%
DOMINO'S PIZZA INC DPZ Consumer Discretionary Hotels, Restaurants & Leisure 1.47% 3.73% 45.73%
PPL CORP PPL Utilities Electric Utilities 1.37% -2.78% -1.86%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
MARRIOTT VACATIONS WORLDWIDE VAC Consumer Discretionary Hotels, Restaurants & Leisure -4.59% -5.81% -19.14%
KELLOGG CO K Consumer Staples Food Products -2.68% -3.91% 5.37%
ROBERT HALF INTL INC RHI Industrials Professional Services -2.05% -0.96% 23.24%
CINTAS CORP CTAS Industrials Commercial Services & Supplies -1.79% -6.89% 23.09%
BB&T CORP BBT Financials Banks -1.72% -5.32% 0.12%

Source: S&P Capital IQ, StockDio

Top Short Winners and Losers

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Winners Ticker Sector Industry 1D Return 5D Return YTD
PENNEY (J C) CO JCP Consumer Discretionary Multiline Retail -9.37% -14.5% -70.46%
TANDEM DIABETES CARE INC TNDM Health Care Health Care Equipment & Supplies -7.82% -0.91% 282.41%
BLOOM ENERGY CORP-REDH BE Industrials Electrical Equipment -6.34% 11.3% 29.57%
FOCUS FINANCL PRTNR LLC-REDH FOCS Financials Capital Markets -3.99% -2.55% 19.66%
IMMUNOMEDICS INC IMMU Health Care Biotechnology -3.7% -8.52% 26.21%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
HERON THERAPEUTICS INC HRTX Health Care Biotechnology 4.4% -5.43% 52.74%
SANGAMO THERAPEUTICS INC SGMO Health Care Biotechnology 4.23% 5.79% -3.77%
INTERCEPT PHARMA INC ICPT Health Care Biotechnology 4.15% 7.06% 81.69%
CALIFORNIA RESOURCES CORP CRC Energy Oil, Gas & Consumable Fuels 3.97% 21.26% 87.03%
ACADIA PHARMACEUTICALS INC ACAD Health Care Biotechnology 3.31% 13.22% -33.31%

Source: S&P Capital IQ, StockDio

Cryptos

  • According to the head of research at Fundstrat, Tom Lee, Ethereum is on the verge of a trend reversal that will see the altcoin rally up to USD$1,900 per token by the end of 2019. Tom Lee discussed in a note to clients of Fundstrat that Ethereum has experienced “overly negative” sentiment in 2018 and that will serve as a basis for its strong rebound to come. At the time of this writing, Ethereum is trading at USD$225 per token.  
  • Swiss-based asset management firm, Tiberius Group AG, has announced that it will introduce a cryptocurrency backed by precious metals. Tiberius Group plans to issue their Tiberius Coin that will trade on a blockchain ledger and be tied to the price of copper, aluminum, nickel, cobalt, tin, gold, and platinum. CEO Giuseppe Rapallo said the Tiberius Coin will likely be offered at around USD$0.70 per token. The Tiberius Coin will be issued on LATOKEN, an Estonian exchange that meets “necessary regulatory standards.” 
  • The United States Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have announced they are suing 1Broker, a Marshall Islands-based securities dealer who allegedly violated federal laws through a bitcoin security swap scheme. The SEC is claiming that 1Broker is not a registered security-based swaps dealer while they also failed to list its security-based swaps on a national exchange. Investors were only able to purchase this product with Bitcoin.  
  • US based cryptocurrency exchange and wallet, Coinbase, has rolled out their new “Coinbase Bundles”, a product designed to simplify cryptocurrency trading. The Coinbase Bundle is a product that baskets five of the largest cryptocurrencies supported by Coinbase, including Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and Ethereum Classic. The Coinbase Bundle baskets these five cryptos in proportion with market capitalization with a minimum purchase size of USD$25. 

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
Solartech International Holdings Limited SEHK:1166 9/26/2018 Earnings Release Date China All-Cap: D
iKang Healthcare Group, Inc. KANG 9/27/2018 Earnings Release Date China All-Cap: C
Conagra Brands, Inc. CAG 9/27/2018 Earnings Release Date US Large-Cap: C, US Consumer Staples: B
Carnival Corporation CCL 9/27/2018 Earnings Release Date US Large-Cap: B, US Consumer Discretionary: B
Cantel Medical Corp. CMD 9/27/2018 Earnings Release Date US Large-Cap: B
Vail Resorts, Inc. MTN 9/28/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: A
Petratherm Limited PTR 9/28/2018 Estimated Earnings Release Date China All-Cap: A
Santana Minerals Limited SMI 9/29/2018 Estimated Earnings Release Date China All-Cap: C
Hang Seng Bank Limited SEHK:11 9/29/2018 Estimated Earnings Release Date China All-Cap: C
Stitch Fix, Inc. SFIX 10/1/2018 Earnings Release Date US Large-Cap: F
PepsiCo, Inc. PEP 10/2/2018 Earnings Release Date US Large-Cap: B, US Consumer Staples: C
Lamb Weston Holdings, Inc. LW 10/2/2018 Earnings Release Date US Large-Cap: C, US Consumer Staples: C
Paychex, Inc. PAYX 10/2/2018 Earnings Release Date US Large-Cap: B, US Information Technology: B
Acuity Brands, Inc. AYI 10/2/2018 Estimated Earnings Release Date US Large-Cap: C, US Industrials: D
RPM International Inc. RPM 10/3/2018 Earnings Release Date US Large-Cap: D
Lennar Corporation LEN 10/3/2018 Earnings Release Date US Large-Cap: D, US Consumer Discretionary: D
Constellation Brands, Inc. STZ 10/3/2018 Earnings Release Date US Large-Cap: B, US Consumer Staples: C
SMART Global Holdings, Inc. SGH 10/4/2018 Earnings Release Date  US Information Technology: C

Source: S&P Capital IQ