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Global stocks lower as investors continue to digest the impact of higher interest rates

Oct 08, 2018

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US Stocks

  • Global stocks are declining this morning as investors continue to digest the impact of higher interest rates on stocks -- please see our blog post, "What Does a Higher US Government 10-Year Yield Mean for S&P 500 Stocks?" where we discuss the relationship between the yield on the US 10-Year and the S&P 500 
  • US stocks index futures are pointing to a drop in US stocks on the open in NY with the Dow Jones minis -0.35%, S&P500 minis -0.26% and Nasdaq 100 minis –0.37% 
  • US Secretary of States had a “testy” start to a state visit to Beijing – the US Secretary of State claimed a “fundamental disagreement” with his Chinese counterpart, Foreign Minister Wang Yi, who accused the US of escalating trade disputes, interfering in Taiwan and meddling in domestic Chinese affairs 
  • The VIX is moving up this morning and is currently at 16.39 after closing at 14.82 last week
  • Petrobras (BOVESPA: PETR4, ADR: PBR) October 19 OTM Calls, XLF October 19 OTM Calls, General Electric (GE) November 16 OTM Puts, QQQ October 12 & October 19 OTM Puts, and SPY October 19 & November 16 OTM Puts are the most heavily traded options contracts in the US pre-market
  • US 10-Year Treasury Bonds are flat with yields little changed to 3.2328%
  • The US Treasury 2s-10s Spread has little changed to 0.35%
  • WTI Crude is currently little changed 0.01% to USD$74.34/bbl with the Brent-WTI spread down USD$-1.51 to USD$8.6/bbl
  • Gold is currently down -0.8% to USD$1194.03/oz
  • Global oil prices are dropping to start the week following rumors the US government may soften its sanctions on exports of Iranian crude oil 
  • Indian gold imports are estimated to have doubled Y/Y in September

Stocks Trending in the News

Click name for Q-Factor score and financial data.

  • Airbus (AIR) will appoint Guillaume Faury as its new CEO today.  Airbus will combine the role of CEO and head of commercial aircraft, the position he holds today.  The change will happen in April when the present CEO will step down.  Airbus is trading 0.25% higher at 104.24 euros.  Airbus is rated ‘Neutral’ in our European Large-Cap Global Top Picks
  • Baker Hughes (BHGE) has agreed to acquire 5% Abnoc Drilling, which values the Abu Dhabi National Oil  Co at USD$11bn.  This is the first direct equity investment by a foreign firm in an Abu Dhabi oil services company.  The deal will help Abnoc Drilling expand drilling support by 40% by 2025.  Baker Hughes is rated ‘Top Short’ in our US Large-Cap Global Top Picks
  • Glencore (GLEN LN) could take itself private according to a report by Bernstein today.    Glencore was a private company for most of its history until going public in 2011.  Glencore management could take the company public and the idea as brought up given the weak share price.  Glencore share are trading 0.42% higher at 326.20 pence.  Glencore is rated ‘Unattractive’ in both our European Large-Cap and United Kingdom All-Large Cap Global Top Picks
  • Kimberly-Clark (KMB) was downgraded today at Goldman Sachs to neutral from buy.  Goldman Sachs said its call that the company’s organic sales momentum would sustain its rise did not pan out as expected and led to the Kimberly-Clark downgrade.  Kimberly-Clark is rated “Neutral’ in our US Large-Cap Global Top Picks and ‘Attractive’ in our US Consumer Staples Global Top Picks 
  • Lloyds Bank (LLOY LN) and Schroders Asset Management (SDR LN) are in talks “with a view to working closely together in parts of the wealth sector”.   The ultimate goal is to win the investment mandate for the Lloyds owned Scottish Widows.  The moves are part of Lloyds efforts to expand its non-banking income.  Lloyds is trading 0.80% lower at 58.46 pence while Schroders is trading 0.40% higher at 3012 pence.  Lloyds Bank is rated ‘Neutral’ in our United Kingdom Global Top Picks and Schroders is rated ‘Neutral’ in our United Kingdom Global Top Picks
  • Tencent (700 HK) will invest USD$200mm in Brazilian bank Nu Bank.  This round of financing values the bank at USD$4bn and the market awaits further detail from Tencent.  Tencent closed 2% lower at HKD$299.  Tencent is rated ‘Attractive’ in our China All-Cap Global Top Picks
  • Wirecard (WDI GR) is trading 7.3% lower at 174.6 euros as the short position in the stock continues to grow.  There is a short position equal to 1.3% of all outstanding Wirecard shares presently.  Wirecard is rated “Top Buy’ in our European Large-Cap Global Top Picks

European Stocks

  • European stocks are dropping to start the week, with investor sentiment impaired by the jump in US treasury yields, the sell-off across Chinese & Hong Kong markets, slower German economic growth, and Italy's defiant stand over its fiscal deficit. 
  • The Italian coalition government’s contentious relationship with the EU remains in focus after Italian Deputy Prime Minister Matteo Salivini suggested Europe’s real enemy is EU President Jean-Claude Juncker and bureaucracy in Brussels that imposes budget restrictions and open boarders
  • The Euro Stoxx 600 is currently down -0.78%, the FTSE 100 has declined -0.58%, the DAX has fallen -0.75%, and the CAC 40 is lower by -0.82%
  • Investor sentiment for European stocks is negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.26x
  • Real Estate (+0.62%), Utilities (+0.18%), and Travel & Leisure (+0.16%) stocks are the top performers in the Euro Stoxx 600 today
  • Oil & Gas (-1.6%), Banks (-1.56%), and Automobiles & Parts (-1.26%) stocks are the worst performers in the Euro Stoxx 600 today
  • 22 stocks in the Euro Stoxx 600 are at 4-week highs while 197 stocks are at 4-week lows
  • 8 stocks in the Euro Stoxx 600 are overbought while 77 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 17.51 after closing at 16.68 yesterday
  • EUR€ is currently down -0.469% against the USD$ to 1.147
  • GBP£ is currently down -0.663% against the USD$ to 1.3033
  • CHF is currently little changed against the USD$ at 1.0067
  • German 10-Year Bunds are higher with yields down -4.4 basis points to 0.529%
  • UK 10-Year GILTs are higher with yields down -3.2 basis points to 1.69%

Asian Stocks

  • Asian stocks started the week in the red, with the MSCI Asia ex Japan index now at a 17-month low
  • The decline in Chinese stocks, the first trading session in a week, was the biggest drop since about 2 years, driven by heightened fears of slowing Chinese growth exacerbated by trade war rhetoric between the US and China
  • The Hang Seng ended down -1.39%, the Hang Seng China Enterprise declined -1.3%, and the CSI 300 was -4.3%
  • Japanese markets were closed for the Health-Sports Day holiday 
  • The Hang Seng is back at early September lows, which were the lowest reading on the Hang Seng since June/July 2017 
  • The People’s Bank of China (PBOC) cut its reserve ratio for banks to 1.0% -- the cut in the reserve ratio is expected to make USD$175bn in capital available for investment thought almost ½ is expected to be used to repay maturing medium-term funding
  • Investor sentiment for Hong Kong stocks finished negative with the advance/decline ratio for the Hang Seng closing at 0.16x
  • 2 stocks in the Hang Seng hit 4-week highs while 12 stocks reached 4-week lows
  • 0 stocks in the Hang Seng closed overbought while 3 stocks closed oversold according to the 16-day RSI Measure

*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 1487 8.14 0 4 0.37% 2.5%
Microsoft Corp 890 9 4 30 -0.14% 7.15%
Goldman Sachs Group Inc/The 655 8.43 -9 23 -0.72% 6.55%
Netflix Inc 574 8.29 -1 -19 0.11% 0.94%
Morgan Stanley 543 7.14 -7 7 -1.51% 1.9%

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
Costco Wholesale Corp 271 9.71 7 9 2.61% 3.15%
Microsoft Corp 890 9 4 30 -0.14% 7.15%
Colgate-Palmolive Co 26 8.71 -1 -18 -0.55% -3.83%
BlackRock Inc 370 8.43 2 -11 -0.72% 0.01%
Goldman Sachs Group Inc/The 655 8.43 -9 23 -0.72% 6.55%

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 11.24 68.65% 12.83 72.62% 1.14 43.06% 4.73 99.6% 6.18 99.21%
QQQ 19.12 88.1% 18.51 86.51% 0.97 14.88% 6.66 97.82% 6.63 98.41%
IWM 16.62 89.68% 15.6 80.56% 0.94 3.77% 5.59 95.63% 5.08 91.47%
FEZ 16.67 87.7% 16.03 83.73% 0.96 15.28% 3.46 84.13% 1.84 60.52%
EEM 21.59 91.67% 20.49 90.08% 0.95 7.34% 6.16 99.21% 2.61 69.44%

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
SERVICEMASTER GLOBAL HLDGS SERV Consumer Discretionary Diversified Consumer Services 3.07% 44.36% 63.84%
TYSON FOODS INC  -CL A TSN Consumer Staples Food Products 2.55% 3.34% -25.67%
DTE ENERGY CO DTE Utilities Multi-Utilities 2.03% 2.26% 5.43%
PG&E CORP PCG Utilities Electric Utilities 2.02% 4.13% 7.49%
CMS ENERGY CORP CMS Utilities Multi-Utilities 1.98% 1.8% 8.4%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
EAGLE MATERIALS INC EXP Materials Construction Materials -3.69% -3.71% -35.27%
FORTINET INC FTNT Information Technology Software -3.64% -6.92% 66.34%
NEXSTAR MEDIA GROUP NXST Consumer Discretionary Media -2.57% -2.42% 4.72%
WESTERN UNION CO WU Information Technology IT Services -2.34% -4.78% -2.02%
COMCAST CORP CMCSA Consumer Discretionary Media -1.86% -1.89% -15.59%

Source: S&P Capital IQ, StockDio

Top Short Winners and Losers

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Winners Ticker Sector Industry 1D Return 5D Return YTD
COGNEX CORP CGNX Information Technology Electronic Equipment, Instruments & Components -10.27% -9.86% -19.09%
ARRAY BIOPHARMA INC ARRY Health Care Biotechnology -7.44% -8.37% 3.12%
SAREPTA THERAPEUTICS INC SRPT Health Care Biotechnology -5.62% -17.91% 84.08%
GREENSKY INC GSKY Information Technology IT Services -5.07% -8.52% -40.45%
WHITING PETROLEUM CORP WLL Energy Oil, Gas & Consumable Fuels -4.85% -9.44% 56.72%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
ALLAKOS INC ALLK Health Care Biotechnology 5.42% -29.94% 6.5%
TANDEM DIABETES CARE INC TNDM Health Care Health Care Equipment & Supplies 5.07% -15.06% 267.47%
GENERAL ELECTRIC CO GE Industrials Industrial Conglomerates 4.03% 15.48% -28.41%
FOSSIL GROUP INC FOSL Consumer Discretionary Textiles, Apparel & Luxury Goods 2.26% -8.23% 90.77%
ANTERO RESOURCES CORP AR Energy Oil, Gas & Consumable Fuels 2.01% 4.8% -6.26%

Source: S&P Capital IQ, StockDio

Cryptos

  • A combination of slow news cycles and lack of trading volume has led Bitcoin’s volatility to hit a 17-month low. Within the past month, Bitcoin has fluctuated between USD$6,200 and USD$6,800, representing an unpresented level of stability. Within the last week, Bitcoin’s price has remained within USD$6,500 and USD$6,600. Many investors are taking this as a sign that cryptocurrency markets are beginning to mature.  
  • OKEx, one of the world’s largest digital asset exchanges, has participated in the initial coin offering of Bidooh, a real-time, real-audience, digital billboard advertising platform. On top of participating in the initial coin offerings, OKEx has agreed to promote Bidooh to prospective token purchasers and has endorsed Bidooh by displaying its own advertisements on Bidooh’s advertising platform. Following OKEx’s initial coin offering participation and endorsement, Bidooh has received overwhelming support from the cryptocurrency and blockchain community.  
  • Pantera Capital’s digital asset hedge fund saw YTD returns of -72.7%, underperforming Bitcoin and the general cryptocurrency market. Pantera Capital’s digital asset hedge fund is one of the largest in the world. In August alone, the hedge fund was down 22.3%. Since its inception in December 2017, the fund has lost 40.8% of its total value.  
  • Spencer Bogart, a partner at Blockchain Capital, believes Bitcoin’s price is bottoming out and beginning to manifest a bull run. While interviewing with CNBC this past Friday, Bogart said, “We’re down about 70% from our highs, so I think that Bitcoin is close to bottoming, and so is the rest of the market.” In a tweet that followed his interview, Bogart expressed that he believes we will end 2018 with Bitcoin above USD$10,000. 

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
Texhong Textile Group Limited SEHK:2678 10/7/2018 Estimated Earnings Release Date China All-Cap: C
SUPERVALU INC. SVU 10/8/2018 Estimated Earnings Release Date US Large-Cap: D, US Consumer Staples: C
Fastenal Company FAST 10/9/2018 Estimated Earnings Release Date US Large-Cap: A, US Industrials: C
Delta Air Lines, Inc. DAL 10/10/2018 Estimated Earnings Release Date US Large-Cap: C, US Industrials: C
Walgreens Boots Alliance, Inc. WBA 10/11/2018 Earnings Release Date US Large-Cap: B, US Consumer Staples: B
Marriott Vacations Worldwide Corporation VAC 10/11/2018 Estimated Earnings Release Date US Large-Cap: B, US Consumer Discretionary: C
JPMorgan Chase & Co. JPM 10/12/2018 Earnings Release Date US Large-Cap: C
Citigroup Inc. C 10/12/2018 Earnings Release Date US Large-Cap: C
Wells Fargo & Company WFC 10/12/2018 Earnings Release Date US Large-Cap: C
The PNC Financial Services Group, Inc. PNC 10/12/2018 Earnings Release Date US Large-Cap: B
First Republic Bank FRC 10/12/2018 Earnings Release Date US Large-Cap: B
The Charles Schwab Corporation SCHW 10/14/2018 Estimated Earnings Release Date US Large-Cap: C
Wintrust Financial Corporation WTFC 10/14/2018 Estimated Earnings Release Date US Large-Cap: C
CLP Holdings Limited SEHK:2 10/14/2018 Earnings Release Date China All-Cap: B

Source: S&P Capital IQ