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Stocks dropping following disappointing results from Amazon and Alphabet

Oct 26, 2018

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US Stocks

 

  • Global stocks are dropping this morning following disappointing results from Amazon.com (AMZN) and Alphabet (GOOG.L) and negative earnings guidance from European large-cap stocks 
  • US stocks index futures are declining and are pointing to a sharp decline to the start of trading in US stocks with the Dow Jones minis –0.81%, S&P500 minis –1.03% and Nasdaq 100 minis –2.01% 
  • Global stocks have lost close to USD$6.7tn in market value since September as escalating trade tensions and higher interest rates have dampened investor sentiment
  • 3Q US GDP estimates will be released at 8:30am and will affect outlook for future interest rate increases
  • The VIX is moving up this morning and is currently at 27.18 after closing at 24.22 yesterday
  • HYG November 16 & January 2019 OTM Puits, VXX November 16 OTM Puts, SPY October 26 & November 16 OTM Puts, and GDX November 16 OTM Calls are the most heavily traded options contracts in US pre-market trading
  • US 10-Year Treasury Bonds are higher with yields down -3.56 basis points to 3.0811%
  • The US Treasury 2s-10s Spread has widened 0.08 basis points to 0.27%
  • WTI Crude is currently up 0.84% to USD$67.33/bbl with the Brent-WTI spread down USD$-1.54 to USD$8.28/bbl
  • Gold is currently up 0.36% to USD$1236.59/oz
  • European stocks are dropping this morning following disappointing earnings results from US large-cap tech stocks and negative FY guidance from large-cap European stocks 
  • European oil stocks are trading at their lowest level since April 2018 as global oil prices head for its third straight weekly decline
     

Stocks Trending in the News

Click name for Q-Factor breakdown, latest price details, more financial info and sentiment data.
 

  • Amazon (AMZN) reports C3Q EPS of USD$5.75 vs Street estimates of USD$3.11.  While earnings blew out estimates, revenues came in weaker than expected at USD$56.5bn vs. a forecast of USD$57.1bn.  Amazon is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Autoliv (ALV) reports interim C3Q sales slightly below market expectations.  Autoliv sees FY CY2018 operating margin at 10.5% vs. previous guidance of 11.0%.  Autoliv is not rated in our Global Top Stock Ideas.
  • BASF SE (DB:BAS) C3Q results which miss analyst expectations after a slowdown in global auto sales and higher raw material costs hit both top-line and profitability.  BASF is rated “Neutral” in our European Large-Cap Global Top Stock Ideas. 
  • Cabot Oil (COG) reports C3Q earnings which came in light vs. Consensus on weaker than expected revenues for the quarter.  Cabot Oil boosts its quarterly dividend 17%.  Cabot Oil is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • China Life (SEHK:2628) was downgraded at CICC after reportings worse than expected C3Q results.  CICC cut profit forecasts by 40% for CY2018 and CY2019 earnings and cut their price target for China Life to HKD$23.  China Life  is rated “Neutral” in our China All-Cap Global Top Stock Ideas. 
  • Colgate-Palmolive (CL) reports C3Q earnings which are in-line with Street estimates though revenues miss as management cites a difficult environment in 3Q.  Colgate-Palmolive continues to see a tough environment for “pricing” though volumes were flat Y/Y.  Colgate-Palmolive is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Staples Global Top Stock Ideas. 
  • Electrolux (OM: ELUX B) is tumbling this morning after reports C3Q results which miss Consensus expectations as higher raw materials costs continue to pinch operating profitability.  North American sales were further hit on market-share losses to private label brands following bankruptcy of Sears (SHLD).  Elextrolux is rated “Neutral” in our European Large-Cap Global Top Stock Ideas. 
  • Fujitsu Ltd (TSE:6702) reports F2Q earnings which miss market estimates.  Earnings for the quarter were negatively impaired by costs associated with restructuring following the sales of its PC business to Lenovo (SEHK:992).  Fujitsu management sees operating margin reach 10% by FY2022.  Fujitsu is rated “Neutral” in our Japan Large-Cap Global Top Stock Ideas.
  • Glencore (LSE: GLEN) C3Q results miss expectations with own-source Copper output coming in at 1.06 million tons.  Glencore is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas. 
  • Google (GOOG.L) reports C3Q EPS of USD$13.06 vs. Consensus of USD$10.40.  While earnings blew out estimates, Google’s revenues, ex TAC, came in slightly below expectations at USD$27.2bn.  Google average cost-per-click for C3Q dropped 28%.  Google is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Info Tech Global Top Stock Ideas.
  • Intel Corp (INTC) reports C3Q EPS that beat Street estimates as a surprise jump in PC demand boosted revenues for Intel chips.  Revenues from Intel’s PC-focused business grew 16% Y/Y.  Intel is the second large semiconductor maker in the world and its positive earnings should provide a boost to semiconductor stocks and the SOXX ETF.  Intel is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Info Tech Global Top Stock Ideas.
  • Microsoft (MSFT) reports F1Q results which top estimates, though capex came in 4.8% below expectations.  Microsoft’s beat was driven by its cloud computing unit as revenue from Azure cloud computing services jumped 76% Y/Y.  Microsoft is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Info Tech Global Top Stock Ideas. 
  • Moody’s Corp (MCO) reports C3Q EPS of USD$1.69, missing market forecasts of USD$1.78.  FY Adjusted CY2018 is brought down to USD$7.50-7.65, below Street estimates if YSD$7.71.  Moody’s management sees restructuring charges of SUD$30 million to 40 million in C4Q.  Moody’s is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Royal Bank of Scotland (LSE:RBS) reports its it has set aside USD$128 million to reflect uncertainty around Brexit during C3Q.  Royal Bank of Scotland CEO Ross McEwan suggests large companies are pausing investment plans as the BREXIT talks drag on.  For the quarter, Royal Bank of Scotland reports net profit that is ahead of Street estimates with net interest margin (NIM) coming in at 1.93%.  Royal Bank of Scotland is rated “Neutral” in our UK All-Cap Global Top Stock Ideas. 
  • SEB SA (ENXTPA:SK) cut its FY CY2018 profit growth outlook on continued impact from FX volatility and weak retail sales (on account of disruption from eCommerce boom).  SEB sees FY CY2018 sales growth of ~8%.  SEB is rated “Attractive” in our European SMID-Cap Global Top Stock Ideas.
  • Sunny Optical (SEHK:2382) was downgraded to “Hold” at Jefferies with a price target of HKD$65.  Sunny Optical is rated “Unattractive” in our China All-Cap Global Top Stock Ideas. 
  • Tencent (SEHK:700) has been summoned by Chinese authorities in regards to pornography content shares on some of its Wechat subscription accounts.  Tencent has been asked to steip up its management and verification of Wechat accounts.  Tencent is rated “Attractive” in our China All-Cap Global Top Stock Ideas,
  • Total SA (ENXTPA:FP) C3Q come in ahead of Consensus estimates though management suggests it will keep spending restrained.  Total remains committed to improving efficiency and profitability as its looks to maintain its ability to weather the next downturn in global oil prices.  Total is rated “Attractive” in our European Large-Cap Global Top Stock Ideas. 
  • Valeo (ENXTPA:FR) is plunging in early morning trading following C3Q results which miss market expectations.  A slowdown in the China market and new rules on emissions testing hit Valeo results harder than management expected.  Valeo cuts its target FY CY2018 guidance to 6.2%-6.5%.  Valeo is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Western Digital (WDC) reports FY1Q2018 EPS of $3.04, matching consensus EPS of $3.04. While top-line revenue was on par with consensus estimates, Western Digital’s top-line revenue fell short of expectations as management reported FY1Q2018 revenue of $5bn compared to consensus of $5.14bn. Highlighting the earnings release was Western Digital’s surveillance hard drive sales and embedded flash solution revenue, both of which grew more than 30% y/y. Western Digital is rated “Attractive” in our US Information Technology Global Top Stock Ideas and “Neutral” in our US Large-Cap Global Top Stock Ideas. 

 

 

European Stocks

  • European stocks are dropping this morning following the disappointing earnings results from US large-cap tech stocks and negative FY guidance from large-cap European stocks 
  • European oil stocks are trading at their lowest level since April 2018 as global oil prices head for its third straight weekly decline
  • The Euro Stoxx 600 is currently down -1.53%, the FTSE 100 has declined -1.64%, the DAX has fallen -2.05%, and the CAC 40 is lower by -2.34%
  • Investor sentiment for European stocks is negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.11x
  • Travel & Leisure (-0.36%), Food & Beverage (-0.48%), and Utilities (-0.84%) stocks are the top performers in the Euro Stoxx 600 today
  • Oil & Gas (-2.85%), Automobiles & Parts (-2.45%), and Technology (-2.33%) stocks are the worst performers in the Euro Stoxx 600 today
  • 9 stocks in the Euro Stoxx 600 are at 4-week highs while 272 stocks are at 4-week lows
  • 4 stocks in the Euro Stoxx 600 are overbought while 146 stocks are oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, is moving up this morning and is currently at 24.85 after closing at 20.76 yesterday

Asian Stocks

  • Asian stocks dropped in overnight trading following disappointing results from US Tech behemoths Amazon.com (AMZN) and Alphabet (GOOG.L) 
  • YTD, Chinese stocks have lost closed to USD$3tn in market value and are on pace for the worst annual performance since CY2008 as the Chinese government’s focus on deleveraging combined with rising global trade tensions to spook investor sentiment
  • The Nikkei 225 finished down --0.4%, the Hang Seng ended down -1.11%, the Hang Seng China Enterprise declined -1.16%, and the CSI 300 was -0.65%
  • Investor sentiment for Japanese stocks finished negative with the advance/decline ratio for the Nikkei 225 closing at 0.79x
  • 0 stocks in the Nikkei 225 hit 4-week highs while 187 stocks reached 4-week lows
  • 0 stocks in the Nikkei 225 closed overbought while 70 stocks closed oversold according to the 16-day RSI Measure
  • Investor sentiment for Hong Kong stocks finished negative with the advance/decline ratio for the Hang Seng closing at 0.47x
  • 0 stocks in the Hang Seng hit 4-week highs while 24 stocks reached 4-week lows
  • 0 stocks in the Hang Seng closed overbought while 6 stocks closed oversold according to the 16-day RSI Measure
  • Japan 10-Year Government Bonds are higher with yields down -0.4 basis points to 0.113%
  • JGBs 2s-10s Spread has narrowed 0.8 basis points to 0.23%
  • JPY¥ is currently down -0.463% against the USD$ to 111.9

 

*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 1434 6.57 6 31 4.7% 5.06%
Alphabet Inc 1408 7.29 -3 3 -0.48% -0.06%
Netflix Inc 1066 4.71 -8 -9 -1.28% -2.09%
Morgan Stanley 822 5 6 5 4.16% 3.65%
Goldman Sachs Group Inc/The 803 4.43 17 17 3.57% 3.26%

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 524 8.57 2 21 4.66% 4.76%
Colgate-Palmolive Co 71 8.29 -13 -18 -2.09% -3.37%
Walt Disney Co/The 340 8.29 -4 -18 -2.95% -0.66%
United Parcel Service Inc 107 8 -2 0 0.5% 0.52%
Apple Inc 314 7.86 6 36 0.84% 7.01%

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 18.72 97.22% 16.68 94.84% 0.89 2.98% -2.39 19.44% 2.95 56.94%
QQQ 25.09 96.83% 21.78 95.63% 0.87 3.57% -6.64 11.9% 1.15 37.7%
IWM 22.9 98.02% 20.7 99.21% 0.9 3.57% -0.88 18.45% 4.53 82.94%
FEZ 19.75 95.24% 18.04 94.44% 0.91 8.93% 1.76 57.94% 1.1 57.94%
EEM 25.6 98.41% 23.5 98.81% 0.92 3.77% -1.03 34.13% 1.6 61.51%

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 5.9% 1.02% 35.3%
COMCAST CORP CMCSA Consumer Discretionary Media 4.92% -0.28% -11.95%
DUNKIN' BRANDS GROUP INC DNKN Consumer Discretionary Hotels, Restaurants & Leisure 4.67% 0.15% 13.3%
VISA INC V Information Technology IT Services 4.56% 0.88% 20.95%
COPART INC CPRT Industrials Commercial Services & Supplies 4.39% -2.75% 10.46%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
NORTHROP GRUMMAN CORP NOC Industrials Aerospace & Defense -5.72% -13.24% -11.19%
SHERWIN-WILLIAMS CO SHW Materials Chemicals -5.27% -10.03% -11.07%
HERSHEY CO HSY Consumer Staples Food Products -5.05% -1.68% -6.52%
RAYMOND JAMES FINANCIAL CORP RJF Financials Capital Markets -3.79% -13.89% -15.28%
WASTE MANAGEMENT INC WM Industrials Commercial Services & Supplies -2.77% -6.03% 0.13%

Source: S&P Capital IQ, StockDio

Top Short Winners and Losers

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Winners Ticker Sector Industry 1D Return 5D Return YTD
ESPERION THERAPEUTICS INC ESPR Health Care Biotechnology -9.83% -26.57% -58.66%
OCEANEERING INTERNATIONAL OII Energy Energy Equipment & Services -9.5% -21.21% -11.84%
GENERAL ELECTRIC CO GE Industrials Industrial Conglomerates -3.09% -4.8% -39.47%
BLOOM ENERGY CORP-REDH BE Industrials Electrical Equipment -2.03% -8.7% -6.44%
INSULET CORP PODD Health Care Health Care Equipment & Supplies -2.03% -8.41% 18.27%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
ACADIA PHARMACEUTICALS INC ACAD Health Care Biotechnology 10.03% -6.64% -35.81%
FOSSIL GROUP INC FOSL Consumer Discretionary Textiles, Apparel & Luxury Goods 9.6% 11.25% 90.68%
AGIOS PHARMACEUTICALS AGIO Health Care Biotechnology 9.51% -7.57% 3.48%
REGENXBIO INC RGNX Health Care Biotechnology 11.66% -4.57% 53.96%
MADRIGAL PHARMACEUTICALS INC MDGL Health Care Biotechnology 10.2% -5.52% 65.9%

Source: S&P Capital IQ, StockDio

Cryptos

  • A new upgrade, expected to be activated on the Zcash (ZEC) blockchain on October 29th, 2018, adds significant usability to Zcash’s protocol by reducing the size of private transactions. The upgrade, called Sapling, is a hardfork that has been in development since Zcash launched in 2016. Speaking about Sapling, Nathan Wilcox, CTO of the Zcash Company, said, “The Sapling protocol will allow shielded transfers to be completed with about 100 times less memory and probably six or more times faster.” Currently, shielded transactions on Zcash are only possible for users that run a full node -- the Sapling upgrade should enable shielded transactions for anyone using Zcash.  
  • Bloomberg reports that Bitfury, a large European cryptocurrency miner manufacturer, is considering an initial public offering (IPO) as one of a few different options to raise funding -- Bitfury is also considering raising debt or selling a minority stake in the company, according to Bloomberg. Bloomberg’s sources detail that Bitfury could IPO with a valuation between USD$3 billion and USD$5 billion, however, the report specifies that these valuations are, “early estimates and could change depending on markets and the industry.” The firm is reportedly considering listing its IPO on exchanges in Amsterdam, London, or Hong Kong.  
  • Mastercard, the US multinational financial services corporation, believes that cryptocurrencies could benefit from applying some principles of fractional reserve banking, according to a new patent application made public on Thursday. The patent application, submitted through the US Patent & Trademark Office (USPTO), outlines plans to allow merchants to interact with “blockchain currencies” through a new method of simultaneous cryptocurrency and fiat-currency storage. The patent details, “The use of traditional payment networks and payment systems technologies in combination with blockchain currencies may provide consumers and merchants the benefits of the decentralized blockchain while maintaining security of account information and provide a strong defense against fraud and theft.” 
  • The Shenzen Court of International Arbitration published a case analysis on Thursday that contains a ruling involving a recent dispute related to the possession and transfer of cryptocurrency assets. Despite China’s ban on cryptocurrency trading, the arbitration body found that Bitcoin should still be legally protected as property with economic values. The case with the ruling involved a plaintiff who signed an agreement for the defendant to manage a pool of cryptocurrencies on behalf of the plaintiff until a certain period in time -- upon reaching that period in time, the defendant refused to return the cryptocurrency assets. The cryptocurrencies in question were 20 Bitcoin (BTC), 50 Bitcoin Cash (BCH), and 13 Bitcoin Diamond (BCD), worth a combined USD$493,158. 

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
Zimmer Biomet Holdings, Inc. ZBH 10/26/2018 Earnings Release Date US Large-Cap: B
Charter Communications, Inc. CHTR 10/26/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: C
Roper Technologies, Inc. ROP 10/26/2018 Earnings Release Date US Large-Cap: A, US Industrials: B
The Goodyear Tire & Rubber Company GT 10/26/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: D
Ventas, Inc. VTR 10/26/2018 Earnings Release Date US Large-Cap: C
Moody's Corporation MCO 10/26/2018 Earnings Release Date US Large-Cap: B
Cabot Oil & Gas Corporation COG 10/26/2018 Earnings Release Date US Large-Cap: C
Weyerhaeuser Company WY 10/26/2018 Earnings Release Date US Large-Cap: B
Colgate-Palmolive Company CL 10/26/2018 Earnings Release Date US Large-Cap: C, US Consumer Staples: B
Ryder System, Inc. R 10/26/2018 Earnings Release Date US Large-Cap: C, US Industrials: C
Phillips 66 PSX 10/26/2018 Earnings Release Date US Large-Cap: B
Jiangsu Expressway Company Limited SEHK:177 10/26/2018 Earnings Release Date China All-Cap: B
Great Wall Motor Company Limited SEHK:2333 10/26/2018 Earnings Release Date China All-Cap: C
Pacific Basin Shipping Limited SEHK:2343 10/26/2018 Estimated Earnings Release Date China All-Cap: C
Beijing Tong Ren Tang Chinese Medicine Company Limited SEHK:3613 10/26/2018 Estimated Earnings Release Date China All-Cap: B
China Conch Venture Holdings Limited SEHK:586 10/26/2018 Estimated Earnings Release Date China All-Cap: B
Sinotrans Limited SEHK:598 10/26/2018 Estimated Earnings Release Date China All-Cap: D

Source: S&P Capital IQ