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Global stocks are sinking as the US Fed signals that it will continue to raise interest rates

Nov 09, 2018



 

US Stocks

  • Global stocks are sinking as traders digest the potential for more interest rate increase by the US Fed and the potential impact of decelerating economic growth in China 
  • US index stock futures are dropping to start the morning, pointing to a negative open in NY with front month Dow Jones minis –0.46%, S&P500 minis –0.52% and Nasdaq 100 minis –0.80% 
  • US PPI data for October is set to be released at 8:30am today while University of Michigan Sentiment Index for the first week of November will be released at 10:00am
  • In spite of the volatility in global stock markets this week, the S&P500 is on pace to finish the week +2.50% while the Nasdaq 100 is on track for +2.0% weekly return 
  • Yesterday, the US Fed singled that the growth of capital investment has moderated from its pace earlier in the year but that it remains committed to a gradual rise in interest rates 
  • US growth stocks, YTD, continue to outpace value stock stocks, evoking memories of the dot.com bull market of the 1990s: the Russell 1000 Growth index has outperformed the Russell 1000 Value Index by 8.1% for CY2018 to date after outperforming by 14.6% in CY2017
  • The VIX is  moving down this morning and is currently at 11.78 after closing at 16.72 yesterday
  • XOP February 2019 OTM Puts, Bank of America November (BAC) 09 OTM Calls, SPY November 09 OTM Calls & Puts, and EFA September 2019 OTM Puts are most actively traded options contracts in the US pre-market
  • US 10-Year Treasury Bonds are higher with yields down -2.96 basis points to 3.2077%
  • The US Treasury 2s-10s Spread has narrowed 1.55 basis points to 0.26%
  • WTI Crude is currently down -1.62% to USD$60.67/bbl with the Brent-WTI spread down USD$-0.68 to USD$7.84/bbl
  • Gold is currently down -0.44% to USD$1218.6/oz
  • WTI has formally entered a bear market after dropping 21% from its October peak
  • Brent is now trading close to its 6-month low 
  • OPEC is meeting over the weekend with traders speculating that the Oil Cartel will cut production targets for CY2019

Stocks Trending in the News


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

  • Activision (ATVI) provided a weaker outlook for 4Q than analysts are expecting, and the stock suffered as a result.  Activision expects 4Q EPS of USD$1.27, below present consensus of USD$1.31.  Activision’s 2019 outlook is in question, a year with limited product launches are expected, making the performance of recent launches particularly important, according to recent analyst comments.  Activision is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Disney (DIS) reported 4Q results that beat expectations, beating the highest estimates.  Disney reported adjusted EPS of USD$1.48 while estimates were for USD$1.34.  Disney’s total revenue of USD$14.31 billion well above the USD$13.74 billion estimate.  Disney CEO has presented a strategy with 3 online platforms-ESPN+, Hulu and Disney+, its new streaming service; all three are receiving significant investments near term.  Disney is rated “Top Buy” in both our US Large-Cap Global Top Stock Ideas and US Consumer Discretionary Global Top Stock Ideas.
  • EDP (EDP) said it is maintaining its guidance for 2018 net profit, according to a regulatory filing.  EDP said it is seeing “clear signals” that approvals are coming for the China Three Gorges bid.  EDP said it also expects approval for projects in Brazil soon from regulators there.  EDP is rated “Attractive” in our European SMID-Cap Global Top Picks.
  • Thyssenkrupp (TKA GR) issued a profit warning citing the effects of a German investigation into steel price fixing.  Thyssenkrupp said there could be “substantial adverse consequences” due the ongoing investigation as well as weakness in its elevator division.  Thyssenkrupp expects 2018 adjusted ebit of 1.6 billion euros, down from 1.8 billion euros previously guided.  Thyssenkrupp is rated “Top Short” in our European Large-Cap Global Top Stock Ideas.
  • Telecom Italia (TIT IM) has abandoned its debt-reduction target that it has previously announced.  Telecom Italia will write down the value of its assets by about 2 billion euros as the company copes with activist investors demanding improvements.  Telecom Italia is facing strong competition in both its mobile and fixed-line businesses.  Telecom Italia is rated “Top Short” in our European Large-Cap Global Top Stock Ideas.
  • TransCanada Corp (TRP CN) suffered a setback in its planned Keystone XL pipeline.  A federal judge in Montana ordered the project to be halted due to an environmental lawsuit against TransCanada.  The judge agreed with plaintiffs that TransCanada Corp failed to conduct a complete environmental review and ordered the project to stop.   TransCanada Corp is not rated in our Global Top Stock Ideas.
  • Yelp (YELP) suffered yesterday after warning that its slowdown from 3Q will continue into this quarter.  Yelp is seeing fewer new accounts being added and consequently less revenue growth.  Yelp forecast 4Q revenue of USD$239-243mn, a range below the lowest estimate presently.  Consensus for 4Q revenue for Yelp is USD$259.7mn.  Yelp is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
     

 

 

European Stocks

  • European stocks are sliding in the last day of trading for the week amid growing concerns about a slowdown in Chinese economic growth and a hawkish US Fed
  • The Euro Stoxx 600 is currently down -0.85%, the FTSE 100 has declined -0.94%, the DAX has fallen -0.87%, and the CAC 40 is lower by -1.11%
  • Negative earnings revisions continue to plague European stocks with 7 straight weeks of negative earnings changes putting a ceiling on European stocks – according to EPFR, European stocks funds have experienced USD$56 billion in outflows for the year and USD$2.6 billion in outflows for the week ending November 7
  • Investor sentiment for European stocks is negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.39x
  • Food & Beverage (+0.61%), Real Estate (+0.18%), and Health Care (+0.03%) stocks are the top performers in the Euro Stoxx 600 today
  • Basic Resources (-3.43%), Automobiles & Parts (-2.45%), and Banks (-2.06%) stocks are the worst performers in the Euro Stoxx 600 today
  • 138 stocks in the Euro Stoxx 600 are at 4-week highs while 8 stocks are at 4-week lows
  • 22 stocks in the Euro Stoxx 600 are overbought while 11 stocks are oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, is  moving down this morning and is currently at 14.23 after closing at 15.88 yesterday
  • EUR€ is currently little changed against the USD$ at 1.1352
  • GBP£ is currently down -0.314% against the USD$ to 1.3021
  • CHF is currently little changed against the USD$ at 0.9943
  • German 10-Year Bunds are higher with yields down -2.8 basis points to 0.429%
  • UK 10-Year GILTs are higher with yields down -3.3 basis points to 1.532%

Asian Stocks

  • Asia stocks finished the week in the red, closing down in overnight trading as the US Fed signals a gradual rise in interest rates 
  • China PPI Y/Y decelerated to +3.3% for the month of October vs. +3.6% for September, spooking investors with the specter of a worse-than-expected deceleration in the Chinese economy (the actual PPI was in-line with market expectations!)
  • The Nikkei 225 finished down --1.05%, the Hang Seng ended down -2.39%, the Hang Seng China Enterprise declined -2.54%, and the CSI 300 was -1.41%
  • Hong Kong stocks were weighed down by tech stocks as the sector sold off on deteriorating investor sentiment  
  • There remains lingering concerns among local traders about the decelerating in earnings at major Chinese tech stocks like Tencent (SEHK:700, ADR:TCHEY)
  • Investor sentiment for Japanese stocks finished negative with the advance/decline ratio for the Nikkei 225 closing at 0.8x
  • 49 stocks in the Nikkei 225 hit 4-week highs while 6 stocks reached 4-week lows
  • 6 stocks in the Nikkei 225 closed overbought while 8 stocks closed oversold according to the 16-day RSI Measure
  • 17 stocks in the Hang Seng hit 4-week highs while 0 stocks reached 4-week lows
  • 0 stocks in the Hang Seng closed overbought while 1 stocks closed oversold according to the 16-day RSI Measure
  • Japan 2-Year Government Bonds are higher with yields down -0.2 basis points to -0.135%
  • Japan 10-Year Government Bonds are lower with yields up 0.1 basis points to 0.123%
  • JPY¥ is currently down -0.202% against the USD$ to 113.84

 

*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 1379 7.43 10 7 2.84% 2.39%
Microsoft Corp 989 6.57 30 30 4.61% 4.81%
Boeing Co/The 804 5.86 17 18 10.02% 10.33%
Goldman Sachs Group Inc/The 786 6.57 21 18 4.02% 2.94%
Netflix Inc 743 6.43 -8 -12 -1.12% -2.07%

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 401 9.29 3 7 4.56% 4.67%
BlackRock Inc 389 8.71 4 4 -2.6% -3.63%
Lockheed Martin Corp 143 8.57 15 14 3.91% 3.95%
Walt Disney Co/The 328 8.43 0 -15 -0.12% -0.26%
QUALCOMM Inc 375 8.29 3 8 4.9% 4.13%

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 13.64 77.78% 14.24 79.37% 1.04 26.59% -7.36 10.32% -1.14 34.13%
QQQ 19.56 80.95% 19.51 82.54% 1 32.74% -14.11 1.19% -3.92 20.63%
IWM 16.65 81.35% 17.21 84.92% 1.03 33.93% -7.85 2.78% -0.46 26.19%
FEZ 15.76 70.04% 16.21 76.19% 1.03 45.44% -2.82 18.25% 0.11 47.22%
EEM 22.15 85.71% 21.44 87.7% 0.97 20.83% -8.38 6.35% -1.88 24.01%

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
LIGAND PHARMACEUTICAL INC LGND Health Care Biotechnology 4.91% -0.05% 21.1%
WESTERN UNION CO WU Information Technology IT Services 2.56% 4.86% 2.29%
BROADCOM INC AVGO Information Technology Semiconductors & Semiconductor Equipment 2.47% 4.41% -7.73%
INTERCONTINENTAL EXCHANGE ICE Financials Capital Markets 1.77% 5.25% 14.45%
STERLING BANCORP STL Financials Banks 1.5% 4.23% -24.63%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
MARRIOTT VACATIONS WORLDWIDE VAC Consumer Discretionary Hotels, Restaurants & Leisure -4.84% -10.55% -43.52%
HUMANA INC HUM Health Care Health Care Providers & Services -4.15% 5.67% 30.48%
CDK GLOBAL INC CDK Information Technology Software -3.69% -11.92% -31.85%
FIRSTCASH INC FCFS Financials Consumer Finance -3.58% 3.35% 21.15%
CHURCH & DWIGHT INC CHD Consumer Staples Household Products -2.57% -0.68% 27.81%

Source: S&P Capital IQ, StockDio

Top Short Winners and Losers

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Winners Ticker Sector Industry 1D Return 5D Return YTD
ROKU INC ROKU Consumer Discretionary Household Durables -25.22% -23.45% -12.96%
IMMUNOMEDICS INC IMMU Health Care Biotechnology -9.61% -8.74% 32.44%
MADRIGAL PHARMACEUTICALS INC MDGL Health Care Biotechnology -9.34% -4.96% 67.63%
CALIFORNIA RESOURCES CORP CRC Energy Oil, Gas & Consumable Fuels -8.46% -15.34% 29.91%
SAREPTA THERAPEUTICS INC SRPT Health Care Biotechnology -7.99% -6.54% 82.56%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
PORTOLA PHARMACEUTICALS INC PTLA Health Care Biotechnology 19.4% 10.66% -74.53%
CARVANA CO CVNA Consumer Discretionary Specialty Retail 10.87% 14.8% 103.36%
FLOWSERVE CORP FLS Industrials Machinery 7.54% 12.85% 23.79%
L BRANDS INC LB Consumer Discretionary Specialty Retail 5.88% 9.95% -43.18%
FOSSIL GROUP INC FOSL Consumer Discretionary Textiles, Apparel & Luxury Goods 5.6% -6.08% 92.66%

Source: S&P Capital IQ, StockDio

Cryptos

  • Binance, the world’s largest cryptocurrency exchange, is launching a new division, Binance Research, to produce, “institutional-grade,” research reports. As detailed in a press release published on Thursday, Binance Research aims to increase transparency and improve the quality of information in the cryptocurrency industry. So far, Binance Research has published two research reports on its website; one that discusses Loom, a layer-2 scaling solution for Ethereum, and another that analyzes Gochain, a scalable decentralized blockchain that supports smart contracts and distributed applications. 
  • Kaleido, a blockchain startup launched by ConsenSys, and Amazon Web Services (AWS) officially launched their full-stack platform geared at helping enterprises build and implement blockchain solution, as per a press release on Thursday. Dubbed Kaleido Marketplace, the platform, “eliminates 80% of the custom code,” typically required to build a blockchain platform by providing enterprises with an array of tools and protocol meant to, “plug-and-play." Kaleido is reportedly already working with trade and finance network Komgo, who works alongside global financial institutions like Citi, ING, and Societe Generale. 
  • The Thai Securities and Exchange Commission (SEC), the country’s top securities regulator, will approve, “at least one,” initial coin offering (ICO) portal for legal operation in the country, according to a report by the Bangkok Post. Secretary General of the Thai SEC, Rapee Sucharitakul, told the local news outlet that he could see ICOs themselves begin to be approved as soon as December of this year. This step by the Thai SEC is one of the final steps in a push to regulate the country’s cryptocurrency market that began in May with the issuance of a royal decree. 
  • Venezuela will present the country’s state and oil-backed cryptocurrency, the Petro, to the Organization of the Petroleum Exporting Coutnries (OPEC) for its use as the digital currency for oil transactions worldwide. Venezuela will wait to present the Petro to OPEC until the first quarter of 2019, according to a tweet from the President of the country’s state-owned oil company PDVSA, Manuel Quevedo. Quevedo hopes that global adoption of the Petro in oil markets will drive economic growth and prosperity in Venezuela. 
     

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
Ubiquiti Networks, Inc. UBNT 11/9/2018 Earnings Release Date US Large-Cap: C, US Information Technology: C
Starwood Property Trust, Inc. STWD 11/9/2018 Earnings Release Date US Large-Cap: C
Li Ning Company Limited SEHK:2331 11/9/2018 Estimated Earnings Release Date China All-Cap: B
Pacific Basin Shipping Limited SEHK:2343 11/9/2018 Estimated Earnings Release Date China All-Cap: C
Orient Overseas (International) Limited SEHK:316 11/9/2018 Estimated Earnings Release Date China All-Cap: F
Beijing Tong Ren Tang Chinese Medicine Company Limited SEHK:3613 11/9/2018 Estimated Earnings Release Date China All-Cap: A
China Conch Venture Holdings Limited SEHK:586 11/9/2018 Estimated Earnings Release Date China All-Cap: B
Sinotrans Limited SEHK:598 11/9/2018 Estimated Earnings Release Date China All-Cap: B
Sun Art Retail Group Limited SEHK:6808 11/9/2018 Estimated Earnings Release Date China All-Cap: B
China Youzan Limited SEHK:8083 11/9/2018 Estimated Earnings Release Date China All-Cap: D
Zhongsheng Group Holdings Limited SEHK:881 11/9/2018 Estimated Earnings Release Date China All-Cap: C
Brilliance China Automotive Holdings Limited SEHK:1114 11/10/2018 Estimated Earnings Release Date China All-Cap: F
China Reinsurance (Group) Corporation SEHK:1508 11/10/2018 Estimated Earnings Release Date China All-Cap: C
Uni-President China Holdings Ltd SEHK:220 11/10/2018 Estimated Earnings Release Date China All-Cap: B
Genertec Universal Medical Group Company Limited SEHK:2666 11/10/2018 Estimated Earnings Release Date China All-Cap: D
United Company RUSAL Plc SEHK:486 11/10/2018 Estimated Earnings Release Date China All-Cap: C
Dongfeng Motor Group Company Limited SEHK:489 11/10/2018 Estimated Earnings Release Date China All-Cap: C
SuperRobotics Limited SEHK:8176 11/10/2018 Estimated Earnings Release Date China All-Cap: C
Eventbrite, Inc. EB 11/11/2018 Earnings Release Date US Large-Cap: D
Sino Biopharmaceutical Limited SEHK:1177 11/11/2018 Estimated Earnings Release Date China All-Cap: B
Dongyue Group Limited SEHK:189 11/11/2018 Estimated Earnings Release Date China All-Cap: C
Vtech Holdings Limited SEHK:303 11/11/2018 Earnings Release Date China All-Cap: B
Chinasoft International Limited SEHK:354 11/11/2018 Estimated Earnings Release Date China All-Cap: C
Kingsoft Corporation Limited SEHK:3888 11/11/2018 Estimated Earnings Release Date China All-Cap: F
Grace Wine Holdings Limited SEHK:8146 11/11/2018 Estimated Earnings Release Date China All-Cap: F
Qutoutiao Inc. QTT 11/11/2018 Earnings Release Date China All-Cap: F
Yirendai Ltd. YRD 11/11/2018 Estimated Earnings Release Date China All-Cap: D
China Zhongwang Holdings Limited SEHK:1333 11/11/2018 Estimated Earnings Release Date China All-Cap: C
Shanghai Jin Jiang International Hotels (Group) Company Limited SEHK:2006 11/11/2018 Estimated Earnings Release Date China All-Cap: C
SITC International Holdings Company Limited SEHK:1308 11/11/2018 Estimated Earnings Release Date China All-Cap: C
PICC Property and Casualty Company Limited SEHK:2328 11/11/2018 Estimated Earnings Release Date China All-Cap: C
Autohome Inc. ATHM 11/11/2018 Earnings Release Date China All-Cap: B

Source: S&P Capital IQ