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Morning Brief

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Global stocks are mixed to start the day with European stocks boosted by positive earnings results

Oct 18, 2018

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US Stocks

  • Global stocks are mixed this AM with European stocks boosted by strong earnings results from large-cap stocks while yesterday’s Fed minutes continue to plague US stocks 
  • US stocks index futures are pointing to a soft open in NY with the Dow Jones minis –0.30%, S&P500 minis –0.38% and Nasdaq 100 minis –0.49% 
  • The release of the most recent US Fed minutes is leaving little doubt with investors that the US Fed will continue to raise benchmark interest rates 
  • JP Morgan stocks strategists believe the systematic selling observed among US stocks should now be over and see attractive valuations and strong fundamentals continuing to drive the current bull market for US stocks 
  • In contrast to the bearish investor sentiment, the SPDR S&P 500 ETF (SPY) experienced inflows of USD$3.29bn yesterday, a +1.3% increase in total fund assets -- certainly a bullish contrarian signal
  • The VIX is little changed this morning and is currently at 17.82 after closing at 17.4 yesterday
  • SPY October 19 OTM Puts, Bank of America (BAC) October 19 OTM Calls, Macy’s (M) November 16 OTM Puts, and HYG November 16 OTM Puts are the most heavily traded options contracts in the US pre-market
  • US 10-Year Treasury Bonds are lower with yields up 0.2 basis points to 3.207%
  • The US Treasury 2s-10s Spread has narrowed 0.44 basis points to 0.31%
  • WTI Crude is currently down -3.02% to USD$69.75/bbl with the Brent-WTI spread up USD$1.42 to USD$9.39/bbl
  • Gold is currently little changed 0.1% to USD$1223.57/oz
     

Stocks Trending in the News

Click name for Q-Factor score and financial data.
 

  • Bank of New York Mellon (BK) saw 3Q EPS of USD$1.06, beating the highest estimates in the market.  Bank of New York had a net interest margin of 1.27%, in line with 1.26% expected.  Bank of New York Mellon has USD$1.83 trillion in asset under management and USD$34.5 trillion in asset under administration.  Bank of New York Mellon is rated ‘Neutral’ in our US Large-Cap Global Top Stock Ideas.
  • BB&T (BBT) reported 3Q adjusted earnings above estimates, with EPS of USD$1.03 beating USD$1.00 estimate.   BB&T net interest margin came at 3.47% while 3.46% was expected.  Net charge-offs came at USD$127mn better than USD$131.8mn expected. BB&T’s 3Q earnings were a record for the company.  BB&T is rated ‘Attractive’ in our US Large-Cap Global Top Stock Ideas.
  • Carrefour (CA FP) reported 3Q sales better than expected and the stock is trading 8% higher at 16.82 euros.  Carrefour saw strength in French supermarket sales, an encouraging sign given recent weakness there.  Capex guidance for 2018 was lowered to 1.7 billion euros from 1.8 billion, analysts generally applauded the move.  Carrefour is rated ‘Neutral’ in our European Large-Cap Global Top Stock Ideas.
  • Danaher (DHR) forecast 4Q earnings that missed the mid-point of analyst estimates.  Danaher sees 4Q adjusted EPS of USD$1.25-1.28, while estimates are USD$1.24-1.32. 3Q sales came at USD$4.85 billion, above USD$4.8 billion expected.  Danaher is rated ‘Top Buy’ in our US Large-Cap Global Top Stock Ideas.
  • FedEx (FDX) may gain if the US drops out of the international postal agreement, as President Trump is threatening to do.  The US is complaining that foreign countries subsidize postal rates giving their domestic players an edge when competing with US shipping companies and the US Postal Service.  FedEx would better be able to compete internationally if there were no subsidies in place.  FedEx is rated ‘Neutral’ in our US Large-Cap Global Top Stock Ideas and ‘Top Buy’ in our US Industrials Global Top Stock Ideas.
  • Hon Hai Precision (TSEC:2317, ADR: HNHPF) was suspended from trading on the Taiwan Stock Exchange until Thursday, October 25.  Hon Hai Precision is in the process of a reducing its paid-in-capital by 20% (as previously announced by management).  Hon Hai Precision is not rated in our Global Top Stock Ideas.
  • KeyCorp (KEY) delivered 3Q earnings from continuing operations that matched expectations, coming at 45 cents per share.  KeyCorp sees 4Q noninterest income growth in the single digits.  KeyCorp expects charge-offs to stay stable in 4Q.  KeyCorp expects 4Q noninterest expenses to remain stable.  KeyCorp is rated ‘Attractive’ in our US Large-Cap Global Top Stock Ideas.
  • MOMO (MOMO) and YY (YY) are experiencing unusual spikes in social media postings over the past few hours.  YY reports earnings on November 8 and MOMO reports earnings on 11/20.  YY is rated “Neutral” and MOMO is rated “Top Buy” in our China All-Cap Global Top Stock Ideas. 
  • Novartis (NOVN LN) has agreed to buy Endocyte Inc (ECYT) in a USD$2.1 billion.  Novartis is acquiring Endocyte for its potential blockbuster prostate cancer drug as Novartis seeks to expand in that area.  Novartis is paying a 54% premium to Endocyte’s closing price of yesterday, offering USD$24 per share.  Novartis is trading 1.8% higher at 85.80 euros.  Endocyte is indicated 45% higher in pre-market trading.  Novartis is rated ‘Top Buy’ in our European Large-Cap Global Top Stock Ideas.  Endocyte is rated ‘Unattractive’ in our European Large-Cap Global Top Stock Ideas.
  • Publicis Group (ENXTPA:PUB) reports a 3Q sales outlook that appears to be boosting its full-year profit outlook.  Publicis is +5.87% to 55.40 euros.  Publicis is rated “Unattractive” in our Europe Large-Cap Global Top Stocks Ideas.
  • SAP (SAP SE) reported mixed 3Q results and the stock is falling 2.4% to 111.88 euros.  SAP 3Q missed estimates but SAP increased guidance for the rest of the year.  SAP sees building momentum in its cloud business going into year end.  SAP saw cloud booking rise 37%, a key indicator of future growth.  SAP is rated ‘Unattractive’ in our European Large-Cap Global Top Stock Ideas.
  • Sinopec (SEHK:386) reports earnings 3Q results which disappointed investor expectations.  Net income guidance fell 20% from 2Q, Sinopec closed down 4.27% to HKD6.50.  Sinopec is rated “Top Buy” in our China All-Cap Global Top Stock Ideas.
  • Snap-On (SNA) reports 3Q results which miss Street estimates with net revenues coming in below the lowest forecast.  Snap-On is not trading in pre-market.  Snap-On is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Industrials Global Top Stock Ideas.
  • Taiwan Semiconductor (2330 TT) gave a revenue outlook below estimates and the stock closed 0.84% at 236.50 Taiwan dollars. Taiwan Semiconductor expects revenue in the coming quarter of USD$9.35-9.45 billion while the market is expecting USD$9.5.  Taiwan Semiconductor is suffering from a slowdown in both crypto mining and mobile phone sales, both are weighing on the stock.  Taiwan Semiconductor is not rated in our Global Top Stock Ideas.
  • Textron (TXT) reports 3Q earnings which miss Consensus estimate.  Textron is dropping 7.4% to USD$60 in pre-market trading.  Textron is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.

European Stocks

  • European stocks are mixed this morning, shrugging off a negative trading session in Asia, with positive earnings results for Media and healthcare stocks offset by a drop in Spanish Bank stocks 
  • The Spanish Supreme Court rules that the Spanish banks must pay mortgage-documentation taxes
  • The Euro Stoxx 600 is currently up +0.32%, the FTSE 100 is higher by +0.05%, the DAX has advanced +0.39%, and the CAC 40 has risen +0.55%
  • Investor sentiment for European stocks is positive with the advance/decline ratio for the Euro Stoxx 600 currently at 2.28x
  • The Euro Stoxx 600 is off 6.53% for the year, on pace for its worst year since 2011 -- total return for the index is a more manageable –3.52%
  • Media (+1.66%), Health Care (+1.2%), and Automobiles & Parts (+1.18%) stocks are the top performers in the Euro Stoxx 600 today
  • Construction & Materials (-0.86%), Banks (-0.72%), and Personal & Household Goods (-0.42%) stocks are the worst performers in the Euro Stoxx 600 today
  • 21 stocks in the Euro Stoxx 600 are at 4-week highs while 44 stocks are at 4-week lows
  • 5 stocks in the Euro Stoxx 600 are overbought while 94 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 16.81 after closing at 17.02 yesterday
  • EUR€ is currently little changed against the USD$ at 1.1518
  • GBP£ is currently little changed against the USD$ at 1.3125
  • CHF is currently up +0.299% against the USD$ to 1.0077
  • German 10-Year Bunds are lower with yields up 1.1 basis points to 0.472%
  • UK 10-Year GILTs are lower with yields up 0.7 basis points to 1.582%

Asian Stocks

  • Asian stocks close in the red overnight with weakness in US stocks carrying over to Asia 
  • Japanese exports dropped for the month of September, the first decline since 2016 – Japan is the world’s third-largest economy 
  • Hong Kong stocks finished little changed with Chinese H-share stocks declining 
  • Chinese stocks dropped on rumors of a widespread margins calls with efforts by local governments to boost investor sentiment failing – the Shanghai Composite is now down almost 30% since hitting its high at the end of January 2018 
  • The Nikkei 225 finished down --0.8%, the Hang Seng ended down -0.03%, the Hang Seng China Enterprise declined -0.6%, and the CSI 300 was -2.37%
  • Investor sentiment for Japanese stocks finished negative with the advance/decline ratio for the Nikkei 225 closing at 0.52x
  • 4 stocks in the Nikkei 225 hit 4-week highs while 3 stocks reached 4-week lows
  • 2 stocks in the Nikkei 225 closed overbought while 5 stocks closed oversold according to the 16-day RSI Measure
  • Investor sentiment for Hong Kong stocks finished neutral with the advance/decline ratio for the Hang Seng closing at 1.17x
  • 1 stock in the Hang Seng hit 4-week highs while 14 stocks reached 4-week lows
  • 0 stocks in the Hang Seng closed overbought while 8 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 0.152%
  • JGBs 2s-10s Spread has widened 0.4 basis points to 0.27%
  • JPY¥ is currently little changed against the USD$ at 112.49

*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 1534 8 5 30 -0.13% 7.43%
Netflix Inc 1380 7.71 -3 -19 0.0% -1.38%
Alphabet Inc 1360 6.86 -2 -1 -0.45% 1.95%
Goldman Sachs Group Inc/The 1107 8.29 -2 24 3.39% 3.52%
Morgan Stanley 1014 7.14 -10 6 3.86% 4.07%

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 464 9.43 4 26 0.24% 5.72%
Lockheed Martin Corp 175 8.71 0 14 0.47% 10.99%
International Business Machines Corp 983 8.57 0 -3 0.95% 1.04%
BlackRock Inc 455 8.57 -3 -7 -3.11% -3.21%
Walt Disney Co/The 314 8.43 -3 -18 -0.98% 0.8%

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 14.3 84.92% 13.76 76.98% 0.96 6.55% -2.92 16.87% 2.18 50.99%
QQQ 21.2 90.48% 18.83 86.51% 0.89 4.96% -2.93 18.25% 1.49 41.27%
IWM 18.36 93.65% 17.24 91.27% 0.94 5.95% -0.28 22.62% 3.56 70.83%
FEZ 17 86.51% 16.36 84.13% 0.96 17.46% 1.47 54.76% 1.02 57.14%
EEM 22.46 92.06% 21.18 91.27% 0.94 7.14% 0.43 49.21% 1.08 53.77%

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
DOMINO'S PIZZA INC DPZ Consumer Discretionary Hotels, Restaurants & Leisure 3.06% -2.67% 36.54%
M & T BANK CORP MTB Financials Banks 1.98% -2.39% -4.16%
CME GROUP INC CME Financials Capital Markets 1.81% 0.59% 23.72%
MOODY'S CORP MCO Financials Capital Markets 1.33% 3.64% 10.97%
COMMERCE BANCSHARES INC CBSH Financials Banks 1.31% -2.38% 13.83%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
VULCAN MATERIALS CO VMC Materials Construction Materials -4.74% -8.96% -30.82%
HOME DEPOT INC HD Consumer Discretionary Specialty Retail -4.44% -4.5% 0.1%
LIGAND PHARMACEUTICAL INC LGND Health Care Biotechnology -3.8% -5.27% 38.14%
EAGLE MATERIALS INC EXP Materials Construction Materials -3.62% -4.73% -41.57%
MARTIN MARIETTA MATERIALS MLM Materials Construction Materials -3.32% -5.78% -29.69%

Source: S&P Capital IQ, StockDio

Top Short Winners and Losers

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Winners Ticker Sector Industry 1D Return 5D Return YTD
PIVOTAL SOFTWARE INC PVTL Information Technology Software -5.04% 5.87% 18.57%
CALIFORNIA RESOURCES CORP CRC Energy Oil, Gas & Consumable Fuels -4.81% -6.93% 62.94%
ROKU INC ROKU Consumer Discretionary Household Durables -4.53% 7.49% 15.57%
FOSSIL GROUP INC FOSL Consumer Discretionary Textiles, Apparel & Luxury Goods -4.0% 4.87% 87.88%
CARRIZO OIL & GAS INC CRZO Energy Oil, Gas & Consumable Fuels -3.89% -4.94% -5.91%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
CAESARS ENTERTAINMENT CORP CZR Consumer Discretionary Hotels, Restaurants & Leisure 11.52% 11.41% -19.93%
ALLAKOS INC ALLK Health Care Biotechnology 6.97% 16.3% 24.94%
CREE INC CREE Information Technology Semiconductors & Semiconductor Equipment 4.99% 13.03% 3.4%
IMMUNOMEDICS INC IMMU Health Care Biotechnology 4.58% 12.32% 33.93%
PUMA BIOTECHNOLOGY INC PBYI Health Care Biotechnology 3.76% 5.82% -74.76%

Source: S&P Capital IQ, StockDio

Cryptos

  • As the Reserve Bank of India is defending its ban on cryptocurrencies amidst a supreme court case to decide the ban’s legality, cryptocurrency industry members in India have been forced to find creative ways to survive. Unocoin, a cryptocurrency exchange startup in India, has turned to cryptocurrency ATMs in order to receive fiat deposits from customers. Most recently, Unocoin established an ATM at a mall in Bangalore, which allows customers to deposit fiat currency into their account without the use of a bank or credit card. Unocoin is currently investigating how they can scale their cryptocurrency ATM solution.  
  • Huboi is reporting increased trading volume in trades between Tether (USDT) and a newer stablecoin, TrueUSD (TUSD), in its US affiliate cryptocurrency exchange, HBUS. This news comes after USDT lost its peg to the US Dollar earlier in the week when it fell below USD$0.90 on some exchanges. HBUS reported that both deposits and withdrawals of USDT, “have increased by over 10x over the last two days.” Over the same time, TUSD trading volume on HBUS increased 30%.  
  • MoneyMatch, a startup based in Malaysia for international money transfers, has successfully completed its first international payment using RippleNet, which also happens to be the first ever payment made from Malaysia to Spain using RippleNet. Recently, Ripple launched an expansion strategy in Asia and the Middle East that has seen the company partner with the Malaysia startup, MoneyMatch. Currently, MoneyMatch is the only fintech company in Malaysia operating with Know-You-Customer functionality, a process required by many regulators across the globe.  
  • The TRON foundation confirmed rumors of a partnership between TRON (TRX) and Baidu after it tweeted an official announcement on Wednesday. The partnership between TRX, a decentralized internet project, and Baidu, China’s largest search engine, will see the formation a Baidu-TRON corporation with a focus on cloud computing resources and making blockchain solutions more accessible for individual users and small businesses. 

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
The Travelers Companies, Inc. TRV 10/18/2018 Earnings Release Date US Large-Cap: B
Textron Inc. TXT 10/18/2018 Earnings Release Date US Large-Cap: B, US Industrials: C
Dover Corporation DOV 10/18/2018 Earnings Release Date US Large-Cap: D, US Industrials: D
Webster Financial Corporation WBS 10/18/2018 Earnings Release Date US Large-Cap: C
BB&T Corporation BBT 10/18/2018 Earnings Release Date US Large-Cap: B
The Bank of New York Mellon Corporation BK 10/18/2018 Earnings Release Date US Large-Cap: C
Danaher Corporation DHR 10/18/2018 Earnings Release Date US Large-Cap: A
Medidata Solutions, Inc. MDSO 10/18/2018 Earnings Release Date US Large-Cap: D
The Blackstone Group L.P. BX 10/18/2018 Earnings Release Date US Large-Cap: D
KeyCorp KEY 10/18/2018 Earnings Release Date US Large-Cap: B
Philip Morris International Inc. PM 10/18/2018 Earnings Release Date US Large-Cap: C, US Consumer Staples: B
PPG Industries, Inc. PPG 10/18/2018 Earnings Release Date US Large-Cap: C
Snap-on Incorporated SNA 10/18/2018 Earnings Release Date US Large-Cap: A, US Industrials: B
Signature Bank SBNY 10/18/2018 Earnings Release Date US Large-Cap: C
Genuine Parts Company GPC 10/18/2018 Earnings Release Date US Large-Cap: A, US Consumer Discretionary: B
Nucor Corporation NUE 10/18/2018 Earnings Release Date US Large-Cap: B
People's United Financial, Inc. PBCT 10/18/2018 Earnings Release Date US Large-Cap: C
Skechers U.S.A., Inc. SKX 10/18/2018 Earnings Release Date US Large-Cap: D, US Consumer Discretionary: F
Celanese Corporation CE 10/18/2018 Earnings Release Date US Large-Cap: A
Associated Banc-Corp ASB 10/18/2018 Earnings Release Date US Large-Cap: C
Bank OZK OZK 10/18/2018 Earnings Release Date US Large-Cap: C
Western Alliance Bancorporation WAL 10/18/2018 Earnings Release Date US Large-Cap: B
Werner Enterprises, Inc. WERN 10/18/2018 Earnings Release Date US Large-Cap: C, US Industrials: A
E*TRADE Financial Corporation ETFC 10/18/2018 Earnings Release Date US Large-Cap: C
Maanshan Iron & Steel Company Limited SEHK:323 10/18/2018 Earnings Release Date China All-Cap: A
Equifax Inc. EFX 10/18/2018 Estimated Earnings Release Date US Large-Cap: C, US Industrials: B
NVR, Inc. NVR 10/18/2018 Estimated Earnings Release Date US Large-Cap: B, US Consumer Discretionary: C
The Procter & Gamble Company PG 10/18/2018 Estimated Earnings Release Date US Large-Cap: C, US Consumer Staples: B
Hisense Home Appliances Group Co., Ltd. SEHK:921 10/18/2018 Estimated Earnings Release Date China All-Cap: C
China Resources Cement Holdings Limited SEHK:1313 10/18/2018 Earnings Release Date China All-Cap: A
Zhaojin Mining Industry Company Limited SEHK:1818 10/18/2018 Earnings Release Date China All-Cap: B

Source: S&P Capital IQ