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Global stocks mixed following Morgan Stanley downgrade of European luxury stocks

Oct 10, 2018

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US Stocks

  • Global stocks are mixed with US 10-year Treasury yields above 3.20% and Morgan Stanley downgrading large-cap European luxury stocks to sell 
  • US stocks index futures are pointing to a drop in US stocks on the open in NY with the Dow Jones minis -0.03%, S&P500 minis -0.04% and Nasdaq 100 minis –0.16% 
  • Bloomberg has published a study suggesting Fed-tightening cycles are normally associated with bull markets for US stocks
  • The VIX is  moving down this morning and is currently at 11.78 after closing at 15.95 last week
  • SPY October 10 OTM Puts, General Electric (GE) December 2018 OTM Calls, EFA October 26 OTM Calls and XLF March 2019 OTM Puts are the most heavily traded options contracts in the US pre-market 
  • The spread between 1M implied volatility and realized volatility for S&P 500 options has jumped to the highest level in a year
  • US 10-Year Treasury Bonds are lower with yields up 1.52 basis points to 3.22%
  • The US Treasury 2s-10s Spread has widened 0.27 basis points to 0.32%
  • WTI Crude is currently up 0.9% to USD$74.96/bbl with the Brent-WTI spread down USD$-0.85 to USD$10.09/bbl
  • Gold is currently little changed -0.23% to USD$1187.07/oz
  • Hurricane Michael is expected to worsen global supply with 40% of Gulf of Mexico production halted 

Stocks Trending in the News

Click name for Q-Factor score and financial data.

  • China Mobile (941 HK) closed 3% higher after Goldman Sachs gave the stock a buy rating as it reinitiates coverage of the Chinese mobile sector.  China Mobile will benefit along with the rest of the sector as Goldman sees major catalysts including ownership reform in the near future.  Goldman Sachs does not expect China Mobile to merge with any other players as other analysts have speculated.  China Mobile is rated “Top Buy” in our China All-Cap Global Top Picks
  • Family Mart (8028 JP) and Don Quijote (7532 JP) are considering strengthening their partnership with each other but there is no firm deal as was reported earlier today in the Japanese press, according to statement issued by the companies.  It was reported that FamilyMart is planning to sell its 60% UNY stake to Don Quijote. FamilyMart closed 5% higher at 13960 yen while Don Quijote closed 9.4% higher at 6050 yen.  FamilyMart is rated ‘Unattractive’ in our Japan Large-Cap and Don Quijote is not rated in our Global Top Picks.
  • Kering (KER FP) is “cheap” according to Jefferies and had its price target reduced today to 545 euros from 590 euros that was simply an F/X adjustment.  Kering continues to see solid demand from Chinese millennials and has yet to see a slow down in any of its metrics.   Concerns that Kering may suffer with tougher Chinese border enforcement are “largely misplaced”, according to Jefferies.  Kering is trading 5.8% lower at 397.20 euros.  Kering is rated ‘Attractive’ in our European Large-Cap Global Top Picks
  • LVMH (MC FP) is trading 5.2% lower at 270.85 euros after Morgan Stanley published a report that we bearish on the luxury sector.  LVMH posted sales growth that matched consensus but the note from Morgan Stanley is getting much more attention.   LVMH is rated ‘Top Buy’ in our European Large-Cap Global Top Picks
  • Huawei (002502 SZ), China’s largest chip maker, introduced its new Ascend series chips that are AI capable and designed to compete with the best chips from western chip makers.  Huawaei’s chips are aimed squarely at those sold by Nvidia (NVDA) and Qualcomm (QCOM) as Huawei seeks to build a tech empire including data center and cloud computing offerings.  Nvidia is rated ‘Attractive’ inour US Large-Cap Global Top Picks and ‘Neutral’ in our US Information Technology Global Top Picks, Qualcomm is rated ‘Neutral’ in both our US Large-Cap Global Top Picks and US Information Technology Global Top Picks
  • Sears (SHLD) has hired M-III Partners to prepare a bankruptcy filing according to a report in the Wall Street Journal today.  The bankruptcy filing for Sears could come as early as next week.  Sears’ largest investor, ESL Investments, said in a recent filing that Sears faces “significant near-term liquidity constraints”.  Sears is rated ‘Unattractive’ in our US SMID-Cap Global Top Picks and ‘Top Short’ in our US Consumer Discretionary Global Top Picks
  • Softbank (9984 JP) is considering taking a majority stake in We Work according to press reports.  Softbank is likely to invest billions more in We Work after already investing USD$4.4bn.  The Wall Street Journal is reporting the amount could be USD$15-20bn in total.  Softbank closedn5.4% lower at 10125 yen.  Softbank is rated ‘Attractive’ in our Japan Large-Cap Global Top Picks
     

European Stocks

  • European stocks are edging down this morning, trading in a tight range as US 10-year treasury yields break above 3.20% and traders continue to digest the potential for decelerating global growth
  • The Euro Stoxx 600 is currently down -0.31%, the FTSE 100 has declined -0.01%, the DAX has fallen -0.61%, and the CAC 40 is lower by -0.69%
  • Investor sentiment for European stocks is negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.49x
  • Morgan Stanley’s downgrade of large-cap luxury stocks to sell is raising investor worries about a structural slowdown of the Chinese economy -- large-cap luxury stocks continue to be heavily owned by institutional funds with the NTM P/E at 21.1x vs. 10-year average of 17.6x
  • Telecommunications (+2.68%), Banks (+1.41%), and Oil & Gas (+1.01%) stocks are the top performers in the Euro Stoxx 600 today
  • Technology (-2.3%), Chemicals (-1.96%), and Personal & Household Goods (-1.78%) stocks are the worst performers in the Euro Stoxx 600 today
  • 8 stocks in the Euro Stoxx 600 are at 4-week highs while 271 stocks are at 4-week lows
  • 7 stocks in the Euro Stoxx 600 are overbought while 126 stocks are oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, is  moving down this morning and is currently at 14.23 after closing at 16.9 yesterday
  • EUR€ is currently little changed against the USD$ at 1.1498
  • GBP£ is currently little changed against the USD$ at 1.3152
  • CHF is currently little changed against the USD$ at 1.0076
  • German 10-Year Bunds are lower with yields up 0.3 basis points to 0.552%
  • UK 10-Year GILTs are lower with yields up 0.4 basis points to 1.72%
     

Asian Stocks

  • Asian stocks took a pause from their recent slide, finishing positive overnight in choppy trading 
  • The Nikkei 225 finished up +0.16%, the Hang Seng ended up +0.08%, the Hang Seng China Enterprise up +0.21%, and the CSI 300 was -0.22%
  • Investor sentiment for Japanese stocks finished positive with the advance/decline ratio for the Nikkei 225 closing at 1.42x
  • 11 stocks in the Nikkei 225 hit 4-week highs while 24 stocks reached 4-week lows
  • 16 stocks in the Nikkei 225 closed overbought while 6 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 1.78x
  • 2 stocks in the Hang Seng hit 4-week highs while 19 stocks reached 4-week lows
  • 0 stocks in the Hang Seng closed overbought while 6 stocks closed oversold according to the 16-day RSI Measure
  • Japan 10-Year Government Bonds are higher with yields down -0.5 basis points to 0.156%
  • JGBs 2s-10s Spread has narrowed 0.3 basis points to 0.27%
  • JPY¥ is currently up +0.239% against the USD$ to 113.23

*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 1759 8.29 -2 3 0.37% 0.25%
Microsoft Corp 1178 9 4 30 -0.13% 7.15%
Ford Motor Co 738 5.71 -3 -18 -1.5% -10.8%
Goldman Sachs Group Inc/The 732 7.71 -5 24 -0.7% 6.5%
Netflix Inc 699 8.86 0 -19 -0.07% 1.81%

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
Cisco Systems Inc 188 9.14 1 25 0.32% 6.53%
International Business Machines Corp 628 9 1 -4 0.06% 0.53%
Colgate-Palmolive Co 32 9 -2 -18 -0.55% -3.59%
Microsoft Corp 1178 9 4 30 -0.13% 7.15%
Starbucks Corp 198 8.86 -1 -9 -0.0% 1.5%

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 11.66 71.63% 12.7 71.03% 1.09 31.35% 5.28 99.21% 6.04 98.81%
QQQ 19.36 87.7% 17.8 79.37% 0.92 6.55% 7.1 98.41% 5.85 95.63%
IWM 16.33 88.1% 15.56 79.96% 0.95 5.75% 5.49 95.24% 5.05 90.48%
FEZ 17.49 90.87% 16.52 87.9% 0.94 11.71% 4.52 91.27% 2.28 63.89%
EEM 20.82 88.89% 20.3 88.1% 0.98 17.46% 5.72 96.83% 2.43 67.66%

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
DUNKIN' BRANDS GROUP INC DNKN Consumer Discretionary Hotels, Restaurants & Leisure 2.58% 2.37% 12.89%
SERVICEMASTER GLOBAL HLDGS SERV Consumer Discretionary Diversified Consumer Services 2.04% 9.08% 66.1%
HENRY (JACK) & ASSOCIATES JKHY Information Technology IT Services 1.45% -1.61% 30.69%
DOMINO'S PIZZA INC DPZ Consumer Discretionary Hotels, Restaurants & Leisure 1.4% 0.67% 42.52%
BROADCOM INC AVGO Information Technology Semiconductors & Semiconductor Equipment 1.37% -1.38% -5.9%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
BLACKBAUD INC BLKB Information Technology Software -15.12% -23.55% -19.44%
LIGAND PHARMACEUTICAL INC LGND Health Care Biotechnology -4.94% -13.1% 52.85%
BERRY GLOBAL GROUP INC BERY Materials Containers & Packaging -4.39% -6.97% -27.71%
SHERWIN-WILLIAMS CO SHW Materials Chemicals -4.11% -6.66% 3.27%
BLACKROCK INC BLK Financials Capital Markets -2.52% -3.74% -8.48%

Source: S&P Capital IQ, StockDio

Top Short Winners and Losers

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Winners Ticker Sector Industry 1D Return 5D Return YTD
AMERICAN AIRLINES GROUP INC AAL Industrials Airlines -6.77% -13.76% -45.01%
SNAP INC SNAP Information Technology Software -6.63% -15.58% -75.88%
GLOBAL BLOOD THERAPEUTICS GBT Health Care Biotechnology -5.12% -4.3% -21.03%
PUMA BIOTECHNOLOGY INC PBYI Health Care Biotechnology -4.29% -7.35% -75.86%
BLOOM ENERGY CORP-REDH BE Industrials Electrical Equipment -3.65% -14.66% 4.31%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
ALLAKOS INC ALLK Health Care Biotechnology 9.23% -18.03% 12.13%
ROWAN COMPANIES PLC RDC Energy Energy Equipment & Services 5.21% 9.52% 24.57%
CHESAPEAKE ENERGY CORP CHK Energy Oil, Gas & Consumable Fuels 4.19% 7.46% 17.21%
CNX RESOURCES CORPORATION CNX Energy Oil, Gas & Consumable Fuels 3.5% 3.64% -3.51%
RANGE RESOURCES CORP RRC Energy Oil, Gas & Consumable Fuels 3.13% 6.66% 3.47%

Source: S&P Capital IQ, StockDio

Cryptos

  • A study conducted by Juniper Research forecasts that the cryptocurrency market could “implode”, highlighting that transaction volumes are steadily decreasing. The report, “The Future of Cryptocurrency: Bitcoin & Altcoin Trends & Challenges 2018-2023", notes that Bitcoin daily transaction volumes have fallen from an average of roughly 360,000 transactions per day in the end of 2017 to about 230,000 in September 2018. Total transaction values have fallen as well, dropping from USD$3.7 billion in the end of 2017 to USD$670 million in September 2018. The report by Juniper highlights problems cryptocurrencies have faced in 2018, including regulator developments, exchange failures, hacker attacks, and blockchain forking.  
  • Binance, the world’s largest cryptocurrency exchange by daily trading volume, announced they would be delisting four tokens from their platform. The four tokens Binance is delisting are Bytecoin (BCN), ChatCoin (CHAT), Iconomi (ICN), and Triggers (TRIG). In a press release concerning the delisting, Binance detailed that these tokens were delisted in order to keep clients and users safe. The delisting by Binance sent all four of these coins’ prices crashing, with Chatcoin falling 30%, Bytecoin dropping 22%, Triggers tanking 49%, and Iconomi dropping 9%.  
  • Singapore’s central bank, the Monetary Authority of Singapore (MAS), has revealed that they are working with domestic banks to ensure cryptocurrency startups receive domestic banking services. Ravi Menon, Managing Director of the MAS, detailed in an interview with Bloomberg that this is part of an effort to boost fintech development in the country. Domestic Singapore-based banks have been reluctant to open bank accounts and provide services for cryptocurrency startups because some of the aspects of the industry appear, “obscure and dangerous”.  
  • Tiberius Group AG, the Swiss-based commodities asset manager who was set to launch a precious metals-backed cryptocurrency, has delayed the launch of the cryptocurrency due to high fees from credit card companies. Dubbed, Tiberius Coin, the metal-backed cryptocurrency’s price would be tied to metals like copper, aluminum, nickel, cobalt, tin, gold, and platinum. The mix of metals that have purposes for stability, technology, or electricity, was meant to make the metal-backed coin more diversified and stable. Tiberius Group stressed in a press release that all clients who took part in the pre-sale of Tiberius Coin in September would have their money refunded in 30 days. 

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
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
Texhong Textile Group Limited SEHK:2678 10/14/2018 Estimated Earnings Release Date China All-Cap: C
The Charles Schwab Corporation SCHW 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
Bank of America Corporation BAC 10/15/2018 Earnings Release Date US Large-Cap: C
Altaba Inc. AABA 10/15/2018 Estimated Earnings Release Date US Large-Cap: A, US Information Technology: D
Beacon Roofing Supply, Inc. BECN 10/15/2018 Estimated Earnings Release Date US Large-Cap: C, US Industrials: A
Cree, Inc. CREE 10/15/2018 Estimated Earnings Release Date US Large-Cap: D, US Information Technology: B
J.B. Hunt Transport Services, Inc. JBHT 10/15/2018 Earnings Release Date US Large-Cap: B, US Industrials: A
Lam Research Corporation LRCX 10/15/2018 Estimated Earnings Release Date US Large-Cap: C, US Information Technology: A
Netflix, Inc. NFLX 10/15/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: C
Omnicom Group Inc. OMC 10/15/2018 Estimated Earnings Release Date US Large-Cap: C, US Consumer Discretionary: B
China National Building Material Company Limited SEHK:3323 10/15/2018 Estimated Earnings Release Date China All-Cap: C
China Agri-Industries Holdings Limited SEHK:606 10/15/2018 Estimated Earnings Release Date China All-Cap: C

Source: S&P Capital IQ