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Global stocks taking a breather this morning, edging down as Goldman Sachs warns about 3Q earnings risk for European auto manufacturers

Oct 17, 2018

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US Stocks

  • Global stocks are edging down this this AM as stock markets around the globe take a breather after yesterday’s sharp rally and ahead of the release of the minutes of the most recent US Fed meeting 
  • US stocks index futures are dropping ahead of the open in NY with the Dow Jones minis –0.30%, S&P500 minis –0.24% and Nasdaq 100 minis –0.24% 
  • Meeting minutes of the most recent US Fed meeting will be released at 2pm today
  • The VIX is little changed this morning and is currently at 17.85 after closing at 17.62 yesterday
  • HYG November 6 OTM Puts, SPY October 19 OTM Puts, EEM November 08 OTM Calls and Electronic Arts (EA) March 2019 OTM Puts are the most heavily traded options contracts in the US pre-market
  • US 10-Year Treasury Bonds are lower with yields up 0.76 basis points to 3.1709%
  • The US Treasury 2s-10s Spread has narrowed 0.09 basis points to 0.3%
  • WTI Crude is currently little changed 0.2% to USD$71.92/bbl with the Brent-WTI spread down USD$-0.78 to USD$9.28/bbl
  • Gold is currently little changed 0.08% to USD$1225.96/oz
  • Global oil prices are declining as traders make sense of contradicting reports about crude oil inventories in the United States -- American Petroleum Institute says inventories dropped 2.13mm barrels while a Bloomberg survey points to a 2.5mm barrels increase 
  • Oil traders will be closely following the Department of Energy report this morning which will give clarity into whether crude oil inventories actually increased for the week ending October 12 -- the report is expected this morning at 10:30am

Stocks Trending in the News

Click name for Q-Factor score and financial data.
 

  • ASML (ASML NA) reported 3Q results beating estimates and upping 4Q guidance above consensus.  ASML stock is trading 4.7% higher at 162.30 euros on the news.  ASML sees 4Q revenue at 3 billion euros, above 2.9 billion euros consensus.  ASML would deliver 11 billion euros in 2018 if the guidance comes to fruition, a record for ASML.  ASML 3Q sales of 2.78 billions euros came a touch above 2.75 billion euros.  ASML is rated ‘Neutral’ in our European Large-Cap Global Top Stock Ideas.
  • Danone (BN FP) reported the weakest 3Q growth in sales in more than 10 years and the stock is trading 3% at 63.07 euros.  Danone said Chinese baby food revenue fell 20% and, while there was solid growth in its yogurt unit, was not sufficient to offset Danone’s woes in Chinese baby formula business.  Danone saw only 1.4% growth in total revenue, down from 4% over the first half of the year.  Danone is rated ‘Neutral’ in our European Large-Cap Global Top Stock Ideas.
  • Fresenius (FME GR) reported an unexpected profit warning and the stock is trading 12.2% lower at 60.54 euros.  Fresenius said that both growth in both sales and net income will come at the low of the guidance range giving investors an indication of the weakness of its hospital unit and dialysis unit.  Fresenius’ weakness comes from emerging markets and North American weakness.  Fresenius is rated ‘Neutral’ in our European Large-Cap Global Top Stock Ideas.
  • IBM (IBM) misses 3Q estimates on revenue, reporting a 2.1% decline in revenue to USD$18.8 billion.  Estimates for IBM’s 3Q revenue were USD$19.1 billion.  Cloud revenue, a key growth engine for IBM, grew 10%, down from 20% in 2Q.  IBM saw revenue growth the past 3 quarters after 6 years of falling sales.  IBM is rated ‘Neutral’ in both our US Large-cap and US Information Technology Global Top Stock Ideas.
  • Infosys (INFO IN) reported quarterly sales and net income that beat expectations.  Infosys reported a 17% jump in revenue as its move into higher margin digital products starts to bear fruit, its fastest growth in over 2 years.  Infosys’ net income of 41.1 billion rupees was up from 40.5 billion rupees. Infosys is rated ‘Attractive’ in our India All-Cap Global Top Stock Ideas
  • M&T Bank (MTB) reported 3Q results above market consensus with 3Q EPS of USD$3.56 beating consensus of USD$3.35.  M&T Bank delivered USD$2.21 a year ago, evidencing strong growth over the past year -- M&T Bank 3Q revenue of USD$1.48 billion was USD$20mm below consensus.  M&T Bank is rated ‘Top Buy’ in our US Large-Cap Global Top Stock Ideas 
  •  Netflix (NFLX) beat expectations for subscriber additions by a long shot, adding 6.96mm new subscriber compared with 5.09mm expected.  Netflix earnings were also well above expected coming at 89 cents per share versus 68 cents consensus.  Most of the Netflix subscriber growth came from overseas as it launched a record amount of new programming in the quarter.  Bloomberg called its results “dazzling”, an apt description.  Netflix is trading 11% higher in pre-market trading to $380.  Netflix is rated ‘Neutral’ in our US Large-Cap Global Top Stock Ideas and ‘Neutral’ in our US Consumer Discretionary Global Top Stock
  • Roche (ROG SW) saw growth in China in its older drugs, helping it beat 3Q revenue estimates.  Roche’s 3 top selling drugs are now being reimbursed in China, helping to fuel growth of the 3, which are seeing waning sales in Europe.  Roche is facing competition to these from biosimilar drugs from other players, making the growth in China particularly important for Roche.  Despite the news, Roche is trading 1% lower at 238.10 francs.  Roche is rated ‘Attractive’ in our European Large-Cap Global Top Stock Ideas.
  • Tesla (TSLA) signed an agreement for land to open a factory in China, its first factory outside of the US.  The Tesla “Gigafactory” will be the first in China fully owned by a foreign player and is central to Tesla’s effort to gain a better foothold in Asia.  Tesla’s CEO Elon Musk also had his settlement with the SEC approved by a federal judge.  Tesla is trading 0.50% higher in premarket trading.  Tesla is rated ‘Neutral’ in both our US Large-cap and US Consumer Discretionary Global Top Stock Ideas.
  • US Bancorp (USB) reported 3Q results that beat estimates.  US Bancorp reported 3Q EPS of USD$1.06 versus USD$1.04 consensus.  US Bancorp delivered 3Q net interest margin of 3.15% matching consensus of the same.  Charge-offs came below expectations at USD$328mm while USD$343.8nm was expected.  US Bancorp is indicated 0.4% higher in pre-market trading.  US Bancorp is rated ‘Attractive’ in our US Large-Cap Global Top Stock Ideas.
  • Volkswagen’s (VOW GR) Audi Group is being fined 800mm euros by the Munich prosecutor related to “deviation from regulatory requirements” with some of its V6 and V8 diesels engines.  Volkswagen said the fine will “directly affect” 2018 financial guidance of the group.  Volkswagen is rated ‘Neural’ in our European Large-Cap Global Top Stock Ideas.

European Stocks

  • European stocks are declining this morning, paring earlier gains following commentary from Goldman Sachs that the C3Q2018 will prove to have been a challenging quarter for the major auto manufacturers
  • The Euro Stoxx 600 is currently down -0.21%, the FTSE 100 is higher by +0.08%, the DAX has fallen -0.49%, and the CAC 40 is lower by -0.18%
  • Investor sentiment for European stocks is neutral with the advance/decline ratio for the Euro Stoxx 600 currently at 0.97x
  • Real Estate (+1.16%), Technology (+0.78%), and Basic Resources (+0.56%) stocks are the top performers in the Euro Stoxx 600 today
  • Automobiles & Parts (-1.72%), Travel & Leisure (-1.17%), and Food & Beverage (-1.07%) stocks are the worst performers in the Euro Stoxx 600 today
  • Goldman Sachs is cautioning investors about the potential for negative earnings revisions for auto suppliers after warning about 3Q earnings for European auto manufacturers  
  • European stocks are expected to report earnings growth of +13.6% for C3Q2018 according to Refinitiv (formerly Thomson Reuters)
  • 12 stocks in the Euro Stoxx 600 are at 4-week highs while 75 stocks are at 4-week lows
  • 4 stocks in the Euro Stoxx 600 are overbought while 83 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 16.58 after closing at 16.83 yesterday
  • EUR€ is currently little changed against the USD$ at 1.156
  • GBP£ is currently down -0.303% against the USD$ to 1.3141
  • CHF is currently down -0.178% against the USD$ to 1.0076
  • German 10-Year Bunds are higher with yields down -1.5 basis points to 0.476%
  • UK 10-Year GILTs are higher with yields down -1.5 basis points to 1.594%

Asian Stocks

  • Asian stocks finished positive overnight as the rally in US markets boosted sentiment in Asia
  • The Nikkei 225 finished up +1.29% and the CSI 300 was +0.56%
  • Hong Kong markets were closed for the Chung Yeung Festival holiday
  • Investor sentiment for Japanese stocks finished positive with the advance/decline ratio for the Nikkei 225 closing at 5.25x
  • 0 stocks in the Nikkei 225 hit 4-week highs while 69 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
  • Japan 10-Year Government Bonds are flat with yields little changed 0 basis points to 0.148%
  • JGBs 2s-10s Spread has widened 0.1 basis points to 0.26%
  • JPY¥ is currently little changed against the USD$ at 112.23
     

*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
Microsoft Corp 1452 8 5 30 -0.13% 7.43%
Alphabet Inc 1325 6.29 -2 -1 -0.39% 2.01%
Netflix Inc 1056 7.43 -3 -19 10.3% 8.78%
Morgan Stanley 894 7.14 -10 6 2.65% 8.27%
Goldman Sachs Group Inc/The 869 8 -2 24 2.61% 4.2%

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
Lockheed Martin Corp 180 9.43 0 14 0.47% 10.99%
Visa Inc 420 9.14 4 26 0.05% 5.27%
UnitedHealth Group Inc 56 8.29 0 18 4.44% 4.3%
Goldman Sachs Group Inc/The 869 8 -2 24 2.61% 4.2%
Bank of America Corp 609 8 -13 14 1.77% 2.16%

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 14.32 85.32% 13.86 78.57% 0.97 8.33% -2.92 16.67% 2.23 53.17%
QQQ 20.86 90.48% 18.6 85.32% 0.89 4.76% -3.26 16.67% 1.24 38.1%
IWM 17.35 90.87% 16.05 84.13% 0.93 4.17% -1.28 16.27% 2.24 44.25%
FEZ 16.98 86.51% 16.41 84.92% 0.97 20.04% 1.63 55.95% 1.15 57.54%
EEM 21.72 90.08% 20.4 87.3% 0.94 6.94% -0.7 38.89% 0.17 42.06%

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
ADOBE SYSTEMS INC ADBE Information Technology Software 9.09% 2.53% 38.32%
LIGAND PHARMACEUTICAL INC LGND Health Care Biotechnology 5.26% -10.91% 41.95%
UNITEDHEALTH GROUP INC UNH Health Care Health Care Providers & Services 4.63% 0.91% 21.92%
COSTAR GROUP INC CSGP Industrials Professional Services 4.29% 3.46% 29.16%
EPAM SYSTEMS INC EPAM Information Technology IT Services 4.23% -4.32% 13.03%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
DOMINO'S PIZZA INC DPZ Consumer Discretionary Hotels, Restaurants & Leisure -5.0% -9.04% 33.49%
BLACKROCK INC BLK Financials Capital Markets -4.54% -11.93% -20.41%
SYNOVUS FINANCIAL CORP SNV Financials Banks -0.56% -6.35% -10.62%
M & T BANK CORP MTB Financials Banks -0.18% -6.46% -6.14%
SUNTRUST BANKS INC STI Financials Banks -0.03% -7.68% -3.05%

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 -7.41% -6.81% -80.81%
DIAMOND OFFSHRE DRILLING INC DO Energy Energy Equipment & Services -2.87% -9.58% -2.15%
SNAP INC SNAP Information Technology Software -2.05% 3.51% -72.37%
PORTOLA PHARMACEUTICALS INC PTLA Health Care Biotechnology -1.64% -5.09% -75.19%
RANGE RESOURCES CORP RRC Energy Oil, Gas & Consumable Fuels -0.63% -5.22% -1.75%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
ARRAY BIOPHARMA INC ARRY Health Care Biotechnology 11.26% 13.69% 12.8%
ESPERION THERAPEUTICS INC ESPR Health Care Biotechnology 10.49% 9.27% -28.7%
ALLAKOS INC ALLK Health Care Biotechnology 9.97% 5.84% 17.97%
GLOBAL BLOOD THERAPEUTICS GBT Health Care Biotechnology 8.44% 5.0% -16.03%
MADRIGAL PHARMACEUTICALS INC MDGL Health Care Biotechnology 7.93% 4.98% 74.3%

Source: S&P Capital IQ, StockDio

Cryptos

  • Coinbase Pro listed its first Ethereum-based token, 0x (ZRX), earlier this week and savvy cryptocurrency traders were able to cash out on a 35% pay day as a result. After listing the token on Coinbase Pro, ZRX’s price spiked nearly 40%, a situation known as the, “Coinbase Effect”. Coinbase is by far the largest cryptocurrency exchange in the United States and is valued at USD$8 billion with millions of users -- a common side effect of listing a new token on its exchange is a double-digit price move that shortly follows. Several individuals, however, took positions just before Coinbase listed ZRX on its exchange, raising concerns of insider trading, a charge Coinbase has denied in the past.  
  • BTCC, China’s first ever Bitcoin exchange, is planning to launch trading services in South Korea. According to South Korean news outlet, The Investor, BTCC is set to launch beta services for cryptocurrency trading in South Korea later in October while planning to make its official debut this November. BTCC will offer South Koreans a trading platform, cryptocurrency wallet services, a mining pool, and a service enabling peer-to-peer customer payments. Founded in 2011, BTCC was once a top three cryptocurrency exchange in China before facing pressure from regulators prior to the cryptocurrency ban in China in September 2017.  
  • Speaking at an event in Dubai on Tuesday, Brian Quintenz, a commissioner of the US Commodity and Futures Trading Commission (CFTC), said that smart contract coders could be held liable if they knowingly create functions using blockchain technology that are predictive and deemed as “event contracts”. While at the event in Dubai, Quintenz said, “Essentially, these contracts would allow individuals to bet on the outcome of future events, like sporting events or elections, using digital currency. If your prediction is right, the contract automatically pays you the winnings.” Quintenz went on to encourage smart contract developers to reach out and engage with CFTC staff to see if their products fall within the CFTC’s legal guidelines.  
  • While speaking to Bloomberg on Tuesday, Joey Krug, co-CIO of Pantera Capital, said that he believes that cryptocurrency markets could increase tenfold by 2020. While speaking to Bloomberg, Krug highlighted the need for scalability in cryptocurrency markets, saying, “These are all markets, and so if you don’t have scalability, you don’t have market markers.” Krug spoke in the interview amidst the announcement of Fidelity launching Fidelity Digital Asset Services, however, he was not surprised the announcement had little effect on crypto prices -- instead, Krug believes the breakout in cryptocurrency prices will be tied to cryptocurrency adoption in our current climate, which would require transaction capacity increases.

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
MGIC Investment Corporation MTG 10/17/2018 Earnings Release Date US Large-Cap: C
Abbott Laboratories ABT 10/17/2018 Earnings Release Date US Large-Cap: B
M&T Bank Corporation MTB 10/17/2018 Earnings Release Date US Large-Cap: A
U.S. Bancorp USB 10/17/2018 Earnings Release Date US Large-Cap: B
Northern Trust Corporation NTRS 10/17/2018 Earnings Release Date US Large-Cap: B
Texas Capital Bancshares, Inc. TCBI 10/17/2018 Earnings Release Date US Large-Cap: D
Wintrust Financial Corporation WTFC 10/17/2018 Earnings Release Date US Large-Cap: C
Alcoa Corporation AA 10/17/2018 Earnings Release Date US Large-Cap: C
SL Green Realty Corp. SLG 10/17/2018 Earnings Release Date US Large-Cap: D
Umpqua Holdings Corporation UMPQ 10/17/2018 Earnings Release Date US Large-Cap: C
Crown Castle International Corp. (REIT) CCI 10/17/2018 Earnings Release Date US Large-Cap: C
Crown Holdings, Inc. CCK 10/17/2018 Earnings Release Date US Large-Cap: D
United Rentals, Inc. URI 10/17/2018 Earnings Release Date US Large-Cap: B, US Industrials: A
Steel Dynamics, Inc. STLD 10/17/2018 Earnings Release Date US Large-Cap: A
Alliance Data Systems Corporation ADS 10/17/2018 Estimated Earnings Release Date US Large-Cap: B, US Information Technology: A
East West Bancorp, Inc. EWBC 10/17/2018 Earnings Release Date US Large-Cap: C
Intuitive Surgical, Inc. ISRG 10/17/2018 Estimated Earnings Release Date US Large-Cap: C
CGN Power Co., Ltd. SEHK:1816 10/17/2018 Estimated Earnings Release Date China All-Cap: C
PayPal Holdings, Inc. PYPL 10/17/2018 Estimated Earnings Release Date US Large-Cap: D, US Information Technology: B
China Tower Corporation Limited SEHK:788 10/17/2018 Earnings Release Date China All-Cap: C

Source: S&P Capital IQ