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Global Stocks advancing with news that China is considering a USD$1.2tn tax cut to jumpstart domestic economy

Oct 22, 2018

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US Stocks

  • Global stocks are advancing this morning following news that China is considering using fiscal policy to jumpstart economic growth  
  • US stocks index futures are pointing to a modestly positive open in NY with the Dow Jones minis +0.37%, S&P500 minis +0.35 and Nasdaq 100 minis +0.70% 
  • This is a busy week for the S&P 500 as 160 stocks in the US benchmark index are set to report earnings this week 
  • Bloomberg reports that October to date is the worst start for the month of October since CY2008 as price pressures are eroding profit margins at US industrials stocks according to their C3Q earnings releases 
  • Utilities stocks are the best performing stocks month to date, as we highlighted in our blog post, "What have been the top performing US ETFs in October?", up 3.6% following several years of underperformance
  • The VIX is little changed this morning and is currently at 19.33 after closing at 19.89 last week
  • XLF November 16 OTM Puts, KRE November 16 OTM Puts, EEM November 16 Puts and FXI December 2018 OTM Calls are the most heavily traded options contracts in the US pre-market
  • US 10-Year Treasury Bonds are lower with yields up 0.19 basis points to 3.194%
  • The US Treasury 2s-10s Spread has widened 0.17 basis points to 0.29%
  • WTI Crude is currently up 0.68% to USD$69.12/bbl with the Brent-WTI spread down USD$-1.44 to USD$10.39/bbl
  • Gold is currently little changed -0.21% to USD$1223.95/oz
  • Global oil prices are trading range-bound following news at that officials in Saudi Arabia dismissed the notion it will use its oil production as a political tool

Stocks Trending in the News

Click name for Q-Factor score and financial data.
 

  • CNOOC (883 HK) and Total (FP FP) have extended their LNG supply agreement.  CNOOC and Total increased the total amount of the contract to 1.5 million tons per annum, up from 1 million.  CNOOC  and Total extended the contract to 20 years.  CNOOC closed 3.3% higher at HKD$14.54, Total is trading flat at 52.76 euros.  CNOOC is rated ‘Top Buy’ in our China All-Cap Global Top Stock Ideas, Total is rated ‘Attractive’ in our European Large-Cap Global Top Stock Ideas.
  • Fiat Chrysler (FCAU) sold its car parts unit, Magnetti Marelli to Japan’s Calsonic Kansei, owned by KKR (KKR) in a USD$7.1 billion deal.  This is the first deal for Fiat Chrysler’s new CEO and will create a parts maker with USD$17 billion in sales.  Fiat Chrysler shares are trading 8% higher in pre-market trading at $16.26.  KKR is indicated flat in pre-market trading.  Fiat Chrysler is not rated in our Global Top Stock Ideas.  KKR is rated ‘Neutral’ in our US Large-Cap Global Top Stock Ideas.
  • Halliburton (HAL) reported 3Q results a touch above expectations.   Halliburton reported 3Q revenue of USD$6.17 billion with USD$6.11 expected.  Halliburton’s 3Q operating income came at USD$716mm while USD$696mm was expected.  Halliburton said while 3Q was decent, 2019 should be “better”.  Halliburton is rated ‘Neutral’ in our US Large-Cap Global Top Stock Ideas.
  • Hasbro (HAS) delivered 3Q results that missed even the lowest estimate.  Hasbro saw 3Q adjusted EPS come at USD$1.93 while consensus was for USD$2.24, non-adjusted EPS came at USD$2.06.  Hasbro revenue came well below at USD$1.57 billion, USD$1.7 billion was expected.  Hasbro saw franchise brands revenue fall 5% and partner brands fall 37%.  Hasbro is rated ‘Unattractive’ in our US Large-Cap Global Top Stock Ideas and ‘Neutral’ in our US Consumer Discretionary Global Top Stock Ideas.
  • Jacobs Engineering Group (JEC) has agreed to sell its chemicals and resource unit to WorleyParsons Ltd. (WOR AU) in a USD$3.3 billion deal.  Jacobs Engineering Group will receive USD$2.6 billion in cash and USD$700mn in shares valued at roughly 11% of WorleyParsons Ltd.  Jacobs Engineering Group is divesting the unit so it can focus on higher margin products.  WorleyParsons Ltd. Has seen its shares halted from trading given the news.  Jacobs Engineering Group is rated ‘Neutral’ in both our US Large-Cap Global Top Stock Ideas and US Industrials Global Top Stock Ideas.
  • Jet Airlines (JETIN IN) is reviewing its routes and planes used as part of its response to higher fuel prices.  Jet Airlines is replacing wide-body planes with five Boeing 737 Max planes.  Jet Airline is “right sizing’ ATR network to align capacity.   Jet Airlines expects 15% fuel savings with each new plane and it expects further network changes to come.  Jet Airlines fell 6.9% to close at 213.95 rupees.  Jet Airlines is not rated in our Global Top Stock Ideas
  • Philips NV (PHIA NA) is falling 6.1% to 32.60 euros after reporting weak 3Q results.  Philips NV said it will need to revamp its entire supply chain to limit the effects of a trade war and Brexit.  Philips NV will see 60 million euros shaved from earnings next year due to the trade war and Brexit.  Philips NV saw revenue grow 7% to 568 million euros while 584 million was expected.  Philips NV Hasbro is rated ‘Attractive’ in our European Large-Cap Global Top Stock Ideas.
  • Ryanair (RYA ID) shares are rising 3.9% to 11.96 euros after weak earnings were not worse than some had feared.  Ryanair did not issue any fresh profit warnings with the results and as AJ Bell wrote in a note “life does not seem to be getting worse…”  Ryanair delivered it first decline in first half earnings in 5 years.  Ryanair also suspended further buybacks until there is a clear Brexit resolution.   Ryanair is rated ‘Top Short’ in our US Large-Cap Global Top Stock Ideas.
     

European Stocks

  • European stocks are edging up this morning but are off earlier AM highs following news that the Italian coalition government is willing to negotiate with the EU 
  • The Stoxx Europe 600 continues to hover near oversold territory according to the 14-day RSI technical indicator
  • The Euro Stoxx 600 is currently up +0.38%, the FTSE 100 is higher by +0.68%, the DAX has advanced +0.6%, and the CAC 40 has risen +0.36%
  • As highlighted in this section last week, European auto stocks trading at 6-year lows
  • Investor sentiment for European stocks is positive with the advance/decline ratio for the Euro Stoxx 600 currently at 2.41x
  • Basic Resources (+1.14%), Insurance (+0.97%), and Automobiles & Parts (+0.86%) stocks are the top performers in the Euro Stoxx 600 today
  • Health Care (-0.35%), Real Estate (-0.2%), and Telecommunications (-0.18%) stocks are the worst performers in the Euro Stoxx 600 today
  • 21 stocks in the Euro Stoxx 600 are at 4-week highs while 193 stocks are at 4-week lows
  • 5 stocks in the Euro Stoxx 600 are overbought while 160 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 18.57 after closing at 18.78 yesterday
  • EUR€ is currently little changed against the USD$ at 1.1505
  • GBP£ is currently down -0.336% against the USD$ to 1.3032
  • CHF is currently little changed against the USD$ at 1.0026
  • German 10-Year Bunds are lower with yields up 0.5 basis points to 0.465%
  • UK 10-Year GILTs are higher with yields down -1.1 basis points to 1.565%

Asian Stocks

  • Asian stocks begin the week on a positive note, closing in the black overnight after Chinese stocks close up over 4%, the biggest one-day move in 2 years 
  • Officials in Beijing announced they are considering a potential tax cut which could be worth up to USD$1.2tn
  • The Nikkei 225 finished up +0.37%, the Hang Seng ended up +2.32%, the Hang Seng China Enterprise up +2.63%, and the CSI 300 was +4.32%
  • Investor sentiment for Japanese stocks finished positive with the advance/decline ratio for the Nikkei 225 closing at 1.65x
  • 0 stocks in the Nikkei 225 hit 4-week highs while 70 stocks reached 4-week lows
  • 0 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 24x
  • 0 stocks in the Hang Seng hit 4-week highs while 13 stocks reached 4-week lows
  • 0 stocks in the Hang Seng closed overbought while 5 stocks closed oversold according to the 16-day RSI Measure
  • Japan 10-Year Government Bonds are lower with yields up 0.5 basis points to 0.154%
  • JGBs 2s-10s Spread has widened 0.3 basis points to 0.27%

*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 1482 7 5 30 -0.03% 0.41%
Netflix Inc 1357 5.57 -3 -19 -0.93% -1.75%
Alphabet Inc 1311 7.71 -2 -1 1.71% -0.29%
Goldman Sachs Group Inc/The 1208 5.86 -2 24 3.55% 3.51%
International Business Machines Corp 1128 6 0 -3 0.41% 0.5%

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 512 8.57 4 26 0.23% 5.7%
Walt Disney Co/The 341 8.29 -3 -18 -0.87% 1.13%
Halliburton Co 43 8.29 -17 -27 -5.79% -27.46%
Merck & Co Inc 221 7.86 4 13 0.88% 3.68%
Alphabet Inc 1311 7.71 -2 -1 1.71% -0.29%

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 15.85 90.08% 15.38 89.68% 0.97 9.13% -1.5 21.43% 3.58 71.43%
QQQ 23.19 93.65% 20.46 91.67% 0.88 3.77% -1.61 24.6% 3.01 66.67%
IWM 19.86 96.03% 18.64 96.43% 0.94 6.15% 1.02 37.7% 4.46 84.13%
FEZ 18.66 91.67% 17.4 92.46% 0.93 12.1% 4 85.32% 1.67 59.92%
EEM 22.88 93.65% 21.64 93.45% 0.95 10.32% -0.3 43.25% 1.22 56.35%

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
AMERICAN EXPRESS CO AXP Financials Consumer Finance 3.71% 3.56% 9.01%
DISNEY (WALT) CO DIS Consumer Discretionary Media 2.31% 5.44% 6.96%
KELLOGG CO K Consumer Staples Food Products 2.29% 4.63% 7.01%
MCCORMICK & CO INC MKC Consumer Staples Food Products 2.29% 5.73% 34.2%
AMERICAN ELECTRIC POWER CO AEP Utilities Electric Utilities 2.18% 3.27% 3.94%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
LIGAND PHARMACEUTICAL INC LGND Health Care Biotechnology -4.96% -7.73% 30.21%
DARDEN RESTAURANTS INC DRI Consumer Discretionary Hotels, Restaurants & Leisure -3.08% -0.4% 12.62%
BLACKBAUD INC BLKB Information Technology Software -2.73% -3.35% -27.14%
CITRIX SYSTEMS INC CTXS Information Technology Software -2.67% -1.8% 12.7%
STERLING BANCORP STL Financials Banks -2.47% -4.24% -20.85%

Source: S&P Capital IQ, StockDio

Top Short Winners and Losers

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Winners Ticker Sector Industry 1D Return 5D Return YTD
PBF ENERGY INC PBF Energy Oil, Gas & Consumable Fuels -10.47% -16.02% 19.85%
ESPERION THERAPEUTICS INC ESPR Health Care Biotechnology -7.02% -2.72% -39.1%
REGENXBIO INC RGNX Health Care Biotechnology -6.68% -3.9% 51.86%
TANDEM DIABETES CARE INC TNDM Health Care Health Care Equipment & Supplies -6.61% -0.03% 265.47%
CARVANA CO CVNA Consumer Discretionary Specialty Retail -6.25% -15.49% 78.57%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
IMMUNOMEDICS INC IMMU Health Care Biotechnology 5.36% 11.49% 40.84%
GULFPORT ENERGY CORP GPOR Energy Oil, Gas & Consumable Fuels 4.42% 5.56% -17.87%
PENNEY (J C) CO JCP Consumer Discretionary Multiline Retail 1.99% -14.66% -83.41%
ALLAKOS INC ALLK Health Care Biotechnology 1.52% 24.83% 32.17%
HERTZ GLOBAL HOLDINGS INC HTZ Industrials Road & Rail 1.45% -2.52% -41.22%

Source: S&P Capital IQ, StockDio

Cryptos

  • Masayoshi Amamiya, Deputy Governor of the Bank of Japan, reiterated his stance towards a central bank-issued digital currency while speaking at a meeting in Nagoya, Japan. Amamiya stated that he does not believe central bank-issued digital currencies are likely to improve existing monetary systems while also stating that the Bank of Japan has no plans to issue a digital currency. Financial experts have recently claimed that a central bank-issued digital currency could provide a way for central banks to provide stimulation to their economy when interest rates fall to zero -- Amamiya questioned this theory, saying, “In order for central banks to overcome the zero lower bound on nominal interest rates, they would need to get rid of cash from society.” 
  • Monero (XMR) transaction fees have fallen more than 96% to an average of USD$0.021 per transaction after the privacy coin enacted the ‘bulletproofs’ software upgrade. Bulletproofs is built to make privacy features on privacy coins like Monero more scalable by changing the way confidential transactions are verified. The bulletproofs update also contained deterrents to prevent the development of specialized mining hardware for Monero.  
  • The Cyberspace Administration of China (CAC), China’s highest-level internet regulator, has published a new set of draft regulations for blockchain-based information service providers. Published on October 19th, 2018, the draft is open for public review and consultation until November 2nd, 2018. Containing 23 articles concerning blockchain-based information service regulation, the draft regulations would require all entities to register with the CAC within 10 days before launching their platform. Another effect of the draft regulations would require service providers to request users to register for services using their real names, phone numbers, and national ID card numbers. 

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
Hasbro, Inc. HAS 10/22/2018 Earnings Release Date US Large-Cap: D, US Consumer Discretionary: C
TCF Financial Corporation TCF 10/22/2018 Earnings Release Date US Large-Cap: C
Lennox International Inc. LII 10/22/2018 Earnings Release Date US Large-Cap: B, US Industrials: C
Cadence Bancorporation CADE 10/22/2018 Earnings Release Date US Large-Cap: C
Halliburton Company HAL 10/22/2018 Earnings Release Date US Large-Cap: C
TD Ameritrade Holding Corporation AMTD 10/22/2018 Earnings Release Date US Large-Cap: C
IQVIA Holdings Inc. IQV 10/22/2018 Earnings Release Date US Large-Cap: C
Kimberly-Clark Corporation KMB 10/22/2018 Earnings Release Date US Large-Cap: C, US Consumer Staples: B
Polaris Industries Inc. PII 10/22/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: C
Zions Bancorporation, National Association ZION 10/22/2018 Earnings Release Date US Large-Cap: B
Cadence Design Systems, Inc. CDNS 10/22/2018 Earnings Release Date US Large-Cap: C, US Information Technology: B
Equity LifeStyle Properties, Inc. ELS 10/22/2018 Earnings Release Date US Large-Cap: C
Beacon Roofing Supply, Inc. BECN 10/22/2018 Estimated Earnings Release Date US Large-Cap: C, US Industrials: A
Rockwell Collins, Inc. COL 10/22/2018 Estimated Earnings Release Date US Large-Cap: A, US Industrials: B
Highwoods Properties, Inc. HIW 10/22/2018 Earnings Release Date US Large-Cap: C
PACCAR Inc PCAR 10/22/2018 Estimated Earnings Release Date US Large-Cap: B, US Industrials: B
Starbucks Corporation SBUX 10/22/2018 Estimated Earnings Release Date US Large-Cap: B, US Consumer Discretionary: B
Verizon Communications Inc. VZ 10/22/2018 Earnings Release Date US Large-Cap: A
Waters Corporation WAT 10/22/2018 Estimated Earnings Release Date US Large-Cap: C
CoStar Group, Inc. CSGP 10/22/2018 Earnings Release Date US Large-Cap: B, US Industrials: C
NextEra Energy, Inc. NEE 10/22/2018 Earnings Release Date US Large-Cap: B
Huaneng Power International, Inc. SEHK:902 10/22/2018 Earnings Release Date China All-Cap: C
SUPERVALU INC. SVU 10/22/2018 Estimated Earnings Release Date US Large-Cap: D, US Consumer Staples: C
China Construction Bank Corporation SEHK:939 10/22/2018 Earnings Release Date China All-Cap: C

Source: S&P Capital IQ