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Global stocks rebounding from worst 2-day skid for the S&P500 since February

Oct 12, 2018

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US Stocks

  • Global stocks appear to be taking a pause from their recent skid this AM with US stocks poised for the best day in more than 6-months as we enter the 3Q earnings season 
  • US stocks index futures are rising ahead of the open in NY with the Dow Jones minis +1.09%, S&P500 minis +1.14% and Nasdaq 100 minis 1.70%
  • The 2-day plunge in the S&P500 (-5.35%) is worst 2-day move since February 2018 
  • There are unsubstantiated rumors that the move in global stocks the past 2 days was caused by sector rebalancing at quantitative funds & selling by ETFs 
  • The VIX is  moving down this morning and is currently at 11.78 after closing at 24.98 last week
  • While the recent jump in VIX has grabbed headlines, we think it is more interesting to highlight that the VVIX, a measure of the volatility of the VIX, is at its lowest level relative to the VIX since April 2018 – that implies the cost of buying VIX options is relatively cheap 
  • The US Treasury staff has advised Secretary of the Treasury Steven Mnuchin that China is not manipulating its currency
  • The People’s Bank of China (PBOC) set the daily reference rate to 6.9501 -- the 9th straight session where the rate has been weakened and suggests the PBOC isn’t overly concerned with a depreciation in the Yuan
  • The Wall Street Journal is reporting that US President Donald Trump plans to meet with Chinese President Xi Jinping during the G-20 summit in Buenos Aires, Argentina in November
  • SPY October 19 & November 16OTM Puts, XLF November 16 & January 2019 OTM Puts, Petrobras (BOVESPA: PETR$; ADR: PBR) November 16 OTM Calls, and Bank of America (BAC) October 12 OTM Calls are the most heavily traded options contracts in the US pre-market
  • 10-Year Treasury Bonds are lower with yields up 1.9 basis points to 3.1688%
  • The US Treasury 2s-10s Spread has widened 0.22 basis points to 0.3%
  • The International Energy Agency (IEA) cut its forecasts for global oil demand in C4Q2018 and CY2019 on decelerating global growth but believes global oil prices will remain elevated on account of a drop in global oil supply – the IEA warns that higher oil prices could pose a real threat to global economic growth

Stocks Trending in the News

Click name for Q-Factor score and financial data.

  • Amazon (AMZN) could enter the Brazilian drug store market as a next move, according to a report by Morgan Stanley.  In the wake of Amazon’s acquisition of online pharmacy, PillPack, Morgan Stanley thinks its next move in the space could be into Brazil to take on local player Raia Drogasil SA (RADL3 BZ).  Any move by Amazon would not threaten Raia Drogasil near term where the barriers to entry are higher than in the US.  Amazon is rated ‘Neutral’ in our US Large-Cap Global Top Picks and ‘Top Buy’ in our US Consumer Discretionary Global Top Picks, Raia Drogasil is rated ‘Attractive’ in our Brazil All-Cap Global Top Picks
  • BlackRock (BLK) won a mandate to manage 30 billion pounds (USD$40bn) of the 109 billion up for grabs from Lloyds, a statement from Lloyds Banking Group (LLOY LN) informed.  Lloyds went on to say that it expects to have greater collaboration with BlackRock going forward.  Lloyds Banking Group is trading up 1.8% at 58.93 pence.  Lloyds Banking Group is rated ‘Neutral’ in our United Kingdom All-Cap Global Top Picks, BlackRock is rated ‘Top Buy’ in our US Large-Cap Global Top Picks
  • Brilliance Automotive (1114 HK) plunged 27% to close at HKD$7.90 after agreeing to give control to BMW (BMW GR) of its JV with them.  Brilliance Automotive will limit its exposure to the growth in the Chinese market by giving BMW control, dimming the prospects for the stock, according to analyst comments.  BMW is trading 1.1% higher at 74.88 euros.  Brilliance Automotive is rated ‘Unattractive’ in our China All-Cap Global Top Picks and BMW is rated ‘Unattractive’ in our European Large-Cap Global Top Picks
  • Intel’s (INTC) stake in ASML (ASML NA) has dropped to 2.99%, below the threshold for reporting, according to Dutch regulator AFM.   In the filing from last year, Intel reported holding 4.96% of ASML.  In 2012, Intel committed to taking a 15% stake in ASML saying it would invest USD$4.1bn.  Intel said at the time the investment in ASML had the goal of shaving 2 years off the time it takes to develop new production techniques.  ASML is trading 0.43% higher at 150.54 euros on the news, Intel is bid 1% higher in pre-market trading.  ASML is rated ‘Neutral’ in our European Large-Cap Global Top Picks and Intel is rated ’Neutral’ in our US Large-Cap Global Top Picks and ‘Top Buy’ in our US Information Technology Global Top Picks
  • JP Morgan (JPM) reported 3Q EPS of USD$2.34 above consensus of USD$2.25.  JP Morgan report equities sales & trading revenue above expectations, coming at USD$1.6bn versus USD$1.42bn expected while fixed income sales and trading came below at USD$2.84bn versus USD$2.96bn expected.  JP Morgan’s investment banking revenue of USD$1.73bn was below USD$1.84bn expected.  JP Morgan is bid slightly higher in pre-market action.  JP Morgan is rated ‘Neutral’ in our US Large-Cap Global Top Picks 
  • Newmont Mining (NEM) saw trading in its options contracts yesterday that was three times the average volume of the last 20 days.  Newmont Mining saw 21,617 contracts change hands compared with 6,623 average for the last 20 trading sessions.  Newmont Mining releases earnings on October 25th.  Newmont Mining is rated ‘Unattractive’ in our US Large-Cap Global Top Picks
  • Pandora (PNDORA DC) is trading 5.6% higher at 412 krona amid speculation it may have hired an advisor to help it field potential buyers.  Pandora also benefitted from a note from broker Carnegie after its dealer survey showed the best feedback from dealers in the US in 3 years.  The news has sent Pandora higher for the second day with short sellers appearing to get squeezed.  Pandora is rated ‘Unattractive’ in our European Large-Cap Global Top Picks
  • Softbank (9984 JP) has chosen Nomura (8604 JP) and Goldman Sachs (GS) as global coordinators of the IPO of its Japanese wireless business, according to a report in Bloomberg.  Softbank is seeking to sell USD$27bn worth of stock and would be the largest IPO ever if completed.  Softbank will start marketing next month with the IPO set to price on December 19th.  Softbank closed 4.6% higher at 9976 yen, Nomura closed flat at 538.10 yen and Goldman Sachs is bid slightly higher in pre-market trading.  Softbank is rated ‘Attractive’ in our Japan Large-Cap Global Top Picks, Nomura is rated ‘Attractive’ in our Japan Large-Cap Global Top Picks and Goldman Sachs is rated ‘Neutral’ in our US Large-Cap Global Top Picks
  • Standard Life Aberdeen (SLA LN) CEO Martin Gilbert said, “if investors want to buy Tencent (700 HK), now is the time to buy Tencent”.  He noted “it’s great to see this type of correction” to allow for the purchase of high-quality stocks like Tencent that recently were valued much higher.  Tencent closed 8% higher at HKD$288.40.  Tencent is rated ‘Attractive’ in our China All-Cap Global Top Picks
  • Sunny Optical (2382 HK) closed 10.7% higher at HKD$78.95 after reporting handset lens shipments grew 11% m/m, 61% y/y.  Sunny Optical report that monthly handset deliveries have reached 100,000 units with market share gains in China and Korea.  Sunny Optical is rated is rated ‘Unattractive’ in our China All-Cap Global Top Picks

European Stocks

  • European stocks are advancing this morning, off their session highs
  • The Euro Stoxx 600 is currently up +0.44%, the FTSE 100 is higher by +0.61%, the DAX has advanced +0.38%, and the CAC 40 has risen +0.47%
  • European stocks are on track for their worst week since February 2018
  • Investor sentiment for European stocks is positive with the advance/decline ratio for the Euro Stoxx 600 currently at 2.43x
  • Basic Resources (+1.63%), Retail (+1.15%), and Automobiles & Parts (+1.08%) stocks are the top performers in the Euro Stoxx 600 today
  • Utilities (-0.66%), Real Estate (-0.62%), and Chemicals (-0.39%) stocks are the worst performers in the Euro Stoxx 600 today
  • 6 stocks in the Euro Stoxx 600 are at 4-week highs while 460 stocks are at 4-week lows
  • 1 stock in the Euro Stoxx 600 is overbought while 290 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 21.24 yesterday
  • EUR€ is currently little changed against the USD$ at 1.1581
  • GBP£ is currently little changed against the USD$ at 1.3222
  • CHF is currently down -0.218% against the USD$ to 1.0085
  • German 10-Year Bunds are lower with yields up 0.8 basis points to 0.526%
  • UK 10-Year GILTs are higher with yields down -1.5 basis points to 1.659%

Asian Stocks

  • Asian stocks rebounded overnight, following the previous 2-day drop across stock markets in the region
  • The Nikkei 225 finished up +0.46%, the Hang Seng ended up +2.12%, the Hang Seng China Enterprise up +2.05%, and the CSI 300 was +1.49%
  • Hong Kong stocks closed the week down for the third straight week as worries about US-China trade relations and decelerating global economic growth is dampening investor enthusiasm in the region
  • Investor sentiment for Japanese stocks finished negative with the advance/decline ratio for the Nikkei 225 closing at 0.92x
  • 0 stocks in the Nikkei 225 hit 4-week highs while 110 stocks reached 4-week lows
  • 3 stocks in the Nikkei 225 closed overbought while 11 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 2.57x
  • 0 stocks in the Hang Seng hit 4-week highs while 39 stocks reached 4-week lows
  • 0 stocks in the Hang Seng closed overbought while 15 stocks closed oversold according to the 16-day RSI Measure
  • Japan 10-Year Government Bonds are lower with yields up 0.4 basis points to 0.15%
  • JGBs 2s-10s Spread has little changed 0 basis points to 0.26%
  • JPY¥ is currently little changed against the USD$ at 112.29

*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 1719 7.57 -2 3 0.37% 0.25%
Microsoft Corp 1341 8.86 4 30 -0.13% 7.32%
Netflix Inc 877 9.14 0 -19 -2.05% -0.2%
Goldman Sachs Group Inc/The 800 8.29 -5 24 -1.25% 5.5%
International Business Machines Corp 693 7.86 1 -4 0.06% 0.65%

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
Colgate-Palmolive Co 42 9.14 -2 -18 -1.11% -3.76%
Netflix Inc 877 9.14 0 -19 -2.05% -0.2%
Merck & Co Inc 227 9 1 13 0.98% 4.19%
Lockheed Martin Corp 144 8.86 1 14 -0.0% 10.48%
Medtronic PLC 187 8.86 2 2 0.01% 1.98%

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 20.61 98.41% 16.6 95.24% 0.81 1.39% 6.57 99.6% 6.31 99.6%
QQQ 25.34 97.62% 21.12 95.24% 0.83 0.79% 6.44 95.63% 6.07 96.43%
IWM 22.45 98.41% 18.51 96.83% 0.82 0.79% 7.62 99.6% 6.07 97.82%
FEZ 20.55 96.83% 17.95 95.63% 0.87 4.96% 6.53 95.24% 3.12 70.63%
EEM 25.91 99.6% 22.58 98.02% 0.87 0.6% 8.7 100.0% 3.8 84.72%

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
VAIL RESORTS INC MTN Consumer Discretionary Hotels, Restaurants & Leisure 0.74% -4.79% 15.16%
HILL-ROM HOLDINGS INC HRC Health Care Health Care Equipment & Supplies 0.72% -3.48% 4.06%
COSTAR GROUP INC CSGP Industrials Professional Services 0.47% -6.48% 23.39%
WEX INC WEX Information Technology IT Services 0.35% -8.92% 22.85%
KAR AUCTION SERVICES INC KAR Industrials Commercial Services & Supplies 0.3% -2.06% 11.9%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
FIRST AMERICAN FINANCIAL CP FAF Financials Insurance -9.37% -10.5% -16.16%
JEFFERIES FINANCIAL GRP INC JEF Financials Diversified Financial Services -6.27% -9.37% -23.5%
VULCAN MATERIALS CO VMC Materials Construction Materials -5.72% -11.49% -27.57%
MARTIN MARIETTA MATERIALS MLM Materials Construction Materials -4.33% -9.86% -28.24%
NEXSTAR MEDIA GROUP NXST Consumer Discretionary Media -3.99% -9.79% -2.5%

Source: S&P Capital IQ, StockDio

Top Short Winners and Losers

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Winners Ticker Sector Industry 1D Return 5D Return YTD
FLUOR CORP FLR Industrials Construction & Engineering -18.53% -23.54% -10.19%
TENABLE HOLDINGS INC TENB Information Technology Software -9.31% -31.29% -10.04%
GULFPORT ENERGY CORP GPOR Energy Oil, Gas & Consumable Fuels -5.77% -4.68% -24.01%
CHESAPEAKE ENERGY CORP CHK Energy Oil, Gas & Consumable Fuels -5.35% -4.91% 6.38%
CARRIZO OIL & GAS INC CRZO Energy Oil, Gas & Consumable Fuels -4.76% -12.36% -5.72%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
MURPHY OIL CORP MUR Energy Oil, Gas & Consumable Fuels 10.93% 5.33% 12.29%
L BRANDS INC LB Consumer Discretionary Specialty Retail 5.99% 4.8% -63.12%
TANDEM DIABETES CARE INC TNDM Health Care Health Care Equipment & Supplies 4.65% -1.99% 260.41%
IMMUNOMEDICS INC IMMU Health Care Biotechnology 4.21% 1.37% 25.82%
ACADIA PHARMACEUTICALS INC ACAD Health Care Biotechnology 3.64% -2.26% -37.14%

Source: S&P Capital IQ, StockDio

Cryptos

  • A recent joint investigation between Yahoo Finance and Decrypt Media reveals that the United States Securities and Exchange Commission (SEC) is expanding its crackdown on initial coin offerings (ICOs), reportedly putting hundreds of projects at risk. Yahoo Finance and Decrypt Media held conversations with more than 15 industry sources, many of which include crypto-related startups subpoenaed by the SEC. According to an anonymous source subpoenaed by the SEC, “everybody’s holding their breath” while waiting for the new SEC rules, however, the SEC still applies the, “same laws, the same statues, the same rules, to stocks and bonds and everything else.” 
  • Large South Korean cryptocurrency exchange, Bithumb, has been sold to a Singapore entity for 400 million won (USD$353 million). The purchaser, BK Global Consortium, has previously held a minority stake in Bithumb as the fifth largest shareholder. According to Korean news outlet, Naver, BK Global Consortium plans to develop and release new services and stablecoins. The News Asia also reported that Bithumb received an USD$880 million valuation in February, raising questions about the lower valuation in today’s acquisition.   
  • While speaking at the joint annual meeting between the World Bank and the International Monetary Fund (IMF), World Bank president, Jim Yong Kim, discussed the, “huge potential” of blockchain. These comments come after President Kim oversaw the creation and launch of the world’s first blockchain bond in August of this year. President Kim also discussed the importance of, “embracing technology” while admitting that, “We at the World Bank Group have had to admit that we’re not keeping up with the latest developments and we’re not doing it in a way that would help our clients take advantage of the great things that are coming out.”

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
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
SUPERVALU INC. SVU 10/15/2018 Estimated Earnings Release Date US Large-Cap: D, US Consumer Staples: 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
The Progressive Corporation PGR 10/15/2018 Earnings Release Date US Large-Cap: A

Source: S&P Capital IQ