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Global stocks declining to start the week as rising tensions between US and Saudi Arabia spooking global markets

Oct 15, 2018

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US Stocks

  • Global stocks are declining to start the week after rising tensions between the United States and Saudi Arabia escalated over the weekend
  • US stocks index futures are dropping ahead of the open in NY with the Dow Jones minis –0.40%, S&P500 minis –0.50% and Nasdaq 100 minis –0.81% 
  • Tensions between Washington and Beijing continue to escalate following comments by US President Trump that the US may impose further tariffs while China ambassador to the US, Cui Tiankai, suggests China has no option but to respond US escalations 
  • US Treasury Secretary Steven Mnuchin is looking for a currency clause that prevents a competitive devaluation to be included in trade discussion with Japanese officials 
  • According to Consensus at the IMF World Economic Council, the global economy is hitting a plateau with CY2020 growth expected to be notably weaker
  • The VIX is little changed this morning and is currently at 22.24 after closing at 21.31 on Friday
  • SPY November 02 OTM Calls & October 18 OTM Puts, Bank of America (BAC) October 19 OTM Calls, EEM December 2018 OTM Puts and KRE November 16 OTM Puts are the most heavily traded options contracts in the US pre-market
  • US 10-Year Treasury Bonds are higher with yields down -1.31 basis points to 3.1482%
  • The US Treasury 2s-10s Spread has narrowed 0.08 basis points to 0.31%
  • WTI Crude is currently up 0.52% to USD$71.34/bbl with the Brent-WTI spread little changed USD$0.22 to USD$10.13/bbl
  • Gold is currently up 1.11% to USD$1230.61/oz
  • Global oil prices are surging following a response by Saudi Arabia that it would retaliate against punitive measures related to the disappearance of Saudi journalist and government critic Jamal Kashoggi

Stocks Trending in the News

Click name for Q-Factor score and financial data.

  • Apple (AAPL) shipped new phones with battery life problems, according to a report in Forbes.  The article highlights a raft of problems that were shipped with the newest iPhones, most of which have since been fixed, but not the battery performance.  Apple’s newest iPhones were tested in a controlled environment and its batteries performed terribly in the Forbes tests.  Apple is rated is rated ‘Top Buy’ in our US Large-Cap Global Top Stock Ideas and ‘Neutral’ in our US Industrials Global Top Stock Ideas.
  • Bank of America (BAC) reported 3Q earnings of 66 cents per share with FICC ex-DVA trading coming at USD$2.1bn versus USD$2.08bn expected.  Bank of America is flat in pre-market trading after reporting total revenue of USD$22.93bn versus USD$22.67bn expected.  Bank of America is rated 'Neutral' in our US Large-Cap Global Top Stock Ideas.
  • Deutsche Boerse (DB1 GR) suffered technical glitches today and saw its market open with a 1-hour delay.  Deutsche Boerse had technical problems with its Xetra T7 protocol, this is the second time this year Deutsche Boerse has had technical problems with its exchange.  Deutsche Boerse is trading 0.50% lower at 109.80.  Deutsche Boerse is rated ‘Attractive’ in our European Large-Cap Global Top Stock Ideas.
  • Harris Corp (HRS) and L3 Technologies (LLL) have combined to create the sixth largest defense contractor in the US.  The combined company will be focused on defense communication and technology, both Harris and L3 presently get two-thirds of its revenue from the US Government.  The new company’s scale will allow it to better compete.  Harris is rated ‘Attractive’ in our US Large-Cap Global Top Stock Ideas and ‘Neutral’ in our US Industrials Global Top Stock Ideas, L3 is rated ‘Attractive’ in our US Large-cap Global Top Stock Ideas and ‘Unattractive’ in our US Industrials Global Top Stock Ideas.
  • JP Morgan (JPM) CEO Jamie Dimon is the latest CEO to cancel his appearance at Saudi Arabia’s “Davos in the Desert” conference.  The JP Morgan CEO canceled in the wake of questions surrounding the murder of Turkish journalist Jamal Khashoggi.  While JP Moran has canceled its appearance, the US Treasury Secretary Steve Mnuchin has yet to cancel.  JP Morgan is rated ‘Neutral’ in our US Large-cap Global Top Stock Ideas.
  • Sears (SHLD) has formally filed for bankruptcy in court in White Plains, NY.  Sears’ bankruptcy is the end of long drama that saw Sears shrink in size and scope.  Sears’ largest shareholder ESL Investments has offered to buy a large portion of its stores.  Sears is 125 years old and was once the dominant retailer in the US.  Sears is rated ‘Unattractive’ in our US Large-Cap Global Top Stock Ideas and ‘Top Short’ in our US Consumer Discretionary Global Top Stock Ideas.
  • Softbank (9984 JP) shares fell 7.3% to close at 9251 yen in the wake of the polemic situation in Saudi Arabia.  Softbank has the kingdom of Saudi Arabia as the biggest outside investor in its USD$100bn Vision Fund which has backed many a well-known start-up.   Softbank was pledged USD$45bn for the existing Vision Fund and the same amount for the next, making Softbank particularly dependent of Saudi Arabia.  Softbank is rated ‘Attractive’ in our Japan Large-cap Global Top Stock Ideas.
  • Tencent (700 HK) is pausing its plans for an IPO for its Tencent Music unit, according to a report in the Wall Street Journal today.  The global sell-off in tech shares has given Tencent pause, the story notes.  Tencent will wait until at least November to reconsider.  Tencent closed 2% lower at HKD$282.80.  Tencent is rated ‘Attractive’ in our China All-Cap Global Top Stock Ideas.
  • Tesco (TSCO LN) is planning to sell euro-denominated bonds in the near future after returning to investment grade recently.  Tesco has its rating upped by Fitch and will likely soon be upgraded by Moody’s.  News reports say that Tesco will sell 5-years Eurobonds to be used to retire existing euro- and sterling-denominated debt.  Tesco is rated ‘Neutral’ in our United Kingdom All-Cap Global Top Stock Ideas.
  • Tesla (TSLA) opened a large charging stating in Hong Kong for its cars after a cut in tax breaks caused a fall in sales.  Tesla opened a 50-spot destination charging facility where drivers can charge up in a few hours.   Tesla believes more charging stations are the key to increased sales.  Tesla is rated ‘Unattractive’ in both our US Large-Cap and US Consumer Discretionary Global Top Stocks Ideas.

European Stocks

  • European stocks are mixed this morning, off intra-day lows after the Euro Stoxx 600 dropped to levels not seen December 2016 (a 22-month low)
  • The Euro Stoxx 600 is currently down -0.27%, the FTSE 100 has declined -0.07%, the DAX has advanced +0.19%, and the CAC 40 is lower by -0.28%
  • Investor sentiment for European stocks is negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.45x
  • Telecommunications (+1%), Oil & Gas (+0.41%), and Health Care (+0.07%) stocks are the top performers in the Euro Stoxx 600 today
  • Industrial Goods & Services (-1.01%), Financial Services (-0.9%), and Technology (-0.84%) stocks are the worst performers in the Euro Stoxx 600 today
  • 5 stocks in the Euro Stoxx 600 are at 4-week highs while 153 stocks are at 4-week lows
  • 1 stock in the Euro Stoxx 600 is overbought while 253 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 19.97 after closing at 20.21 on Monday
  • EUR€ is currently up +0.329% against the USD$ to 1.1598
  • GBP£ is currently little changed against the USD$ at 1.3159
  • CHF is currently up +0.734% against the USD$ to 1.015
  • Generic Euro 10-Year Bonds are higher with yields down -0.5 basis points to 0.493%
  • German 10-Year Bunds are higher with yields down -0.5 basis points to 0.493%
  • UK 10-Year GILTs are higher with yields down -3 basis points to 1.603%

Asian Stocks

  • Asian stocks resumed their downward trend to begin the week, with major stock markets across the region falling
  • The Nikkei 225 finished down --1.87%, the Hang Seng ended down -1.38%, the Hang Seng China Enterprise declined -1.5%, and the CSI 300 was -1.4%
  • Consumer stocks dragged down indices in Hong Kong and Shanghai following an economic report that showed a dropped in purchases of passenger vehicles and online appliances in September 
  • The Shanghai Composite is now at its lowest level since November 2014
  • Investor sentiment for Japanese stocks finished negative with the advance/decline ratio for the Nikkei 225 closing at 0.09x
  • 0 stocks in the Nikkei 225 hit 4-week highs while 100 stocks reached 4-week lows
  • 0 stocks in the Nikkei 225 closed overbought while 7 stocks closed oversold according to the 16-day RSI Measure
  • Investor sentiment for Hong Kong stocks finished negative with the advance/decline ratio for the Hang Seng closing at 0.25x
  • 2 stocks in the Hang Seng hit 4-week highs while 18 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
  • Japan 10-Year Government Bonds are higher with yields down -0.6 basis points to 0.144%
  • JGBs 2s-10s Spread has narrowed 0.4 basis points to 0.26%
  • JPY¥ is currently down -0.392% against the USD$ to 111.77

 

*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 1593 6.57 -2 2 -0.22% -0.18%
Microsoft Corp 1422 7.57 4 30 -0.13% 7.28%
Netflix Inc 1016 7.57 0 -19 -2.11% -0.14%
Goldman Sachs Group Inc/The 765 7.43 -5 24 -1.22% 5.5%
Citigroup Inc 755 6 -3 10 4.36% 4.83%

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
Visa Inc 447 9.14 2 26 0.07% 5.39%
Lockheed Martin Corp 164 9 1 14 -0.0% 10.48%
Walt Disney Co/The 281 8.29 -1 -17 -0.05% 1.56%
Bank of America Corp 448 8 -10 4 -1.43% 4.84%
Medtronic PLC 190 8 2 2 0.02% 1.99%

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 17.96 96.43% 16.04 92.46% 0.89 2.78% 2.75 76.79% 5.37 96.43%
QQQ 22.74 94.44% 20.24 92.46% 0.89 4.17% 0.84 46.03% 4.12 87.7%
IWM 20.86 97.62% 18.73 96.83% 0.9 2.78% 6.29 98.02% 6.41 98.41%
FEZ 19.89 96.43% 17.83 94.84% 0.9 7.34% 5.84 94.44% 3.02 69.84%
EEM 23.81 96.03% 22.2 96.43% 0.93 4.37% 3.18 80.75% 2.5 68.65%

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
VISA INC V Information Technology IT Services 4.47% -3.71% 20.62%
MASTERCARD INC MA Information Technology IT Services 4.45% -4.33% 30.14%
ADOBE SYSTEMS INC ADBE Information Technology Software 4.22% -5.61% 33.68%
GLOBAL PAYMENTS INC GPN Information Technology IT Services 3.76% -3.71% 16.47%
TOTAL SYSTEM SERVICES INC TSS Information Technology IT Services 3.72% -2.02% 18.4%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
STERLING BANCORP STL Financials Banks -3.12% -7.88% -16.61%
CULLEN/FROST BANKERS INC CFR Financials Banks -2.65% -5.82% 5.97%
SYNOVUS FINANCIAL CORP SNV Financials Banks -2.4% -6.48% -10.32%
SUNTRUST BANKS INC STI Financials Banks -2.28% -6.81% -2.17%
M & T BANK CORP MTB Financials Banks -1.98% -5.99% -6.27%

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 -4.45% 8.29% -68.74%
GENERAL ELECTRIC CO GE Industrials Industrial Conglomerates -3.51% -6.75% -35.15%
ALLAKOS INC ALLK Health Care Biotechnology -1.89% 0.84% 7.34%
FOCUS FINANCL PRTNR LLC-REDH FOCS Financials Capital Markets -1.69% -11.07% 7.71%
LAREDO PETROLEUM INC LPI Energy Oil, Gas & Consumable Fuels -1.68% -11.37% -53.64%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
ROKU INC ROKU Consumer Discretionary Household Durables 7.44% -10.26% 14.86%
SNAP INC SNAP Information Technology Software 6.92% -7.9% -73.34%
SAREPTA THERAPEUTICS INC SRPT Health Care Biotechnology 6.73% -3.41% 80.66%
PIVOTAL SOFTWARE INC PVTL Information Technology Software 6.4% -5.05% 16.44%
AVALARA INC AVLR Information Technology Software 6.1% 3.46% -23.25%

Source: S&P Capital IQ, StockDio

Cryptos

  • According to Hong Kong newspaper, the South China Morning Post, the Hong Kong Securities and Futures Commission (SFC) is planning to introduce cryptocurrency regulation to protect investors. While speaking in an interview, Chairman Carlson Ton Ka-shing said that the regulating body is not considering an outright ban, as they do not believe it is “necessarily the right approach”. Tong Ka-shing added that crypto regulation framework is absolutely necessary and that the SFC will be careful to approach these technologies as “new technologies”, instead of classifying and treating them as securities. Chairman Carlson Ton Ka-shing is set to pass his position in the SFC on to Tim Lui Tim-leung on October 19th, 2018.   
  • Mastercard and Visa are set to classify cryptocurrencies and initial coin offerings (ICOs) into a new “high risk” category, according to a report by financial trading news site, Finance Magnates. The new classification of these “high-risk securities merchants” will be subject to additional monitoring by the payment giants, which began on October 12th, 2018. The new classification also enables chargebacks to be executed up to 540 days after the actual transaction date, according to Finance Magnates. The new grouping seems to target businesses that operate without a license and industries that do not require them.  
  • Sources familiar with the matter are reporting that the planned hard fork of Ethereum, Constantinople, is undergoing “consensus issues” and has caused the Ethereum testnet to be “not usable.” The Ethereum testnet reportedly went live with Constantinople at block 5,230,000 on October 13th, 2018, however, a “consensus issue” reportedly occurred and caused Ethereum developer, Afri Schoedon, to state in a threat of tweets that there would be “no Constantinople in 2018.” Schoedon added that the next scheduled call concerning Constantinople between Ethereum developers is scheduled for October 19th, 2018. 

 

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
Bank of America Corporation BAC 10/15/2018 Earnings Release Date US Large-Cap: C
J.B. Hunt Transport Services, Inc. JBHT 10/15/2018 Earnings Release Date US Large-Cap: B, US Industrials: A
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
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
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
Johnson & Johnson JNJ 10/16/2018 Earnings Release Date US Large-Cap: B
Morgan Stanley MS 10/16/2018 Earnings Release Date US Large-Cap: D
Prologis, Inc. PLD 10/16/2018 Earnings Release Date US Large-Cap: D
Comerica Incorporated CMA 10/16/2018 Earnings Release Date US Large-Cap: B
W.W. Grainger, Inc. GWW 10/16/2018 Earnings Release Date US Large-Cap: C, US Industrials: C
Omnicom Group Inc. OMC 10/16/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: B
BlackRock, Inc. BLK 10/16/2018 Earnings Release Date US Large-Cap: A
UnitedHealth Group Incorporated UNH 10/16/2018 Earnings Release Date US Large-Cap: A
First Horizon National Corporation FHN 10/16/2018 Earnings Release Date US Large-Cap: C
The Goldman Sachs Group, Inc. GS 10/16/2018 Earnings Release Date US Large-Cap: C

Source: S&P Capital IQ