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Morning Brief

Wake up to the Morning Quant Ride, your global markets update every morning!

Global stocks are dropping following economic contraction in two of the world’s largest economies

Nov 14, 2018



 

Market data as of 7am EST

US Stocks

  • Global stocks are mixed this morning with European stocks dropping on weak German GDP and US stocks little changed
  • US stocks index futures are little changed this morning, pointing to a flat open in NY with Dow Jones minis +0.02%, S&P500 minis +0.02%, and Nasdaq 100 minis –0.16%
  • Bloomberg reports that the US will hold off from imposing new tariffs on auto imports, putting a bid into international auto stocks today 
  • Larry Kudlow, the Director of the US National Economic Council for US President Trump, confirms that the US and China have restarted their discussion on trade at “all levels”
  • US Fed Chairman Jerome Powell is set to give a speech today at the Dallas Federal Reserve – traders are expecting Fed Chair Powell to give some clarity into the trajectory of interest rate increases going forward
  • The VIX is little changed this morning and is currently at 20.59 after closing at 20.02 yesterday
  • General Electric (GE) December 21 OTM Calls, USO December 21 & January 2019 OTM Puts, EWZ November 16 OTM Puts and EEM November 16 OTM Calls are the most actively traded options contracts in the US pre-market
  • US 10-Year Treasury Bonds are higher with yields down -0.37 basis points to 3.136%
  • The US Treasury 2s-10s Spread has narrowed 0.37 basis points to 0.24%
  • WTI Crude is currently flat at USD$55.69/bbl 
  • Gold is currently little changed -0.18% to USD$1200.06/oz
  • Global oil prices appear to be dismissing US President Trump’s pushback against Saudi Arabia’s suggestion to cut production by 1 million barrels a day as Reuters reports that OPEC is now considering a cut of 1.4 million barrels

Stocks Trending in the News

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

  • Amazon (AMZN) will see the first protest in New York City today over its new campus planned for Long Island City in Queens.   Some local politicians want guarantees from Amazon that it will do all it can to benefit the citizens of Queens and plan to demand that today.  They complain that the area cannot handle 25,000 new people, especially given the state of the subways, saying Amazon is building a helipad while residents are stuck with overcrowded trains.  Amazon is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Apple (AAPL) was downgraded at Guggenheim today to neutral from buy.  The note cites supply chain cuts and the lower deliveries of phones it implies.  Apple was also had its price target lowered at UBS to USD$225, also citing supply chain concerns.  Apple is rated “Attractive” in both our US Large-Cap and US Information Technology Global Top Stock Ideas.
  • Caterpillar (CAT) was maintained as a buy at Credit Suisse in a note to clients.  Caterpillar’s price target was updated to USD$183 as well.  Caterpillar saw October machines sales rise 18%, this follows a 21% rise in September.  Caterpillar is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Industrials Global Top Stock Ideas.
  • Bloomindale's, a unit of Macy's (M), is adding high end appliances to its store in New York City.  Bloomingdale's is following other retailers in adding appliances to its offerings.  The Macy's unit will offer USD$7,000 refrigerators from LG and washing machines that automatically figure out how much soap is needed.  Bloomindale's hopes to spark sales by adding the new products.  Macy's is rated "Neutral" in both our US Large-Cap and US Consumer Discretionary Global Top Stock Ideas. 
  • Merck (MRK GR) cut its full year adjusted ebitda forecast while raising its net sales guidance.  Merck expects full year adjusted ebitda 3.7-3.9 billion euros, down from 3.75-4 billion euros.  Merck now expects organic net sales to grow 4-6%, up from 3-5%.  Merck said adverse forex effects will lower adjusted ebitda by 8-10%.  Merck is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Tata Motors (TTMT IN) had its outlook cut to negative from stable at Moody’s Investors Service.  Tata Motors saw the cut due to weakness expected at its Jaguar Land Rover Automotive Plc over the next 12-18 months.  Tata Motors had its rating reaffirmed at Baa2.  Tata Motors is not rated in our Global Top Stock Ideas.
  • Tencent (700 HK, TCEHY) reported 3Q net income that beat the highest estimates.  Tencent reported net income of 23.33 billion yuan while 18.39 billion as consensus.  Tencent 3Q revenue of 8.6 billion yuan was in line with 80.41 billion yuan expected.   Tencent saw 3Q online gaming revenue of 25.8 billion yuan, online advertising revenue of 16.2 billion and smart phone gaming revenue of 19.5 billion yuan.  Tencent is rated “Attractive” in our China All-Cap Global Top Picks.
  • Wirecard (WDI GR) shares are sliding despite raising guidance.  Wirecard raised its operating profit forecast and investors have not been impressed.  Morgan Stanley noted the increased guidance “a minor positive” given that most estimates were already above that.  Wirecard entered the DAX in September.  Wirecard is rated “Attractive” in our European Large-Cap Global top Stock Idea.
     

 

European Stocks

  • European stocks are declining to start the morning, though they are bouncing off their early AM lows  
  • The Euro Stoxx 600 is currently down -0.53%, the FTSE 100 is higher by +0.04%, the DAX has fallen -0.46%, and the CAC 40 is lower by -0.52%
  • GDP for Germany contracted 0.2% Q/Q in 3Q, the first contraction since early CY2015 as the impact of new emissions tests disrupted auto production 
  • UK Prime Minister Theresa May is struggling to convince members of the UK Parliament to support her BREXIT deal
  • GDP for the Eurozone grew +0.2% Q/Q in 3Q, in-line with market forecasts and at the same pace as 2Q  
  • Italian stocks (and bonds!) are dropping this morning following news that the “populist” Italian government is refusing to budge on their CY2019 budget amidst rising pressure from EU officials
  • Investor sentiment for European stocks is negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.71x
  • Oil & Gas (-1.31%), Telecommunications (+0.37%), and Basic Resources (-2.45%) stocks are the top performers in the Euro Stoxx 600 today
  • Automobiles & Parts (+1.14%), Food & Beverage (-0.24%), and Utilities (+0.7%) stocks are the worst performers in the Euro Stoxx 600 today
  • 56 stocks in the Euro Stoxx 600 are at 4-week highs while 53 stocks are at 4-week lows
  • 16 stocks in the Euro Stoxx 600 are overbought while 27 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 17.81 after closing at 17.03 yesterday
  • EUR€ is currently down -0.186% against the USD$ to 1.1269
  • GBP£ is currently down -0.408% against the USD$ to 1.2924
  • CHF is currently down -0.282% against the USD$ to 0.9902
  • German 10-Year Bunds are higher with yields down -1.8 basis points to 0.391%
  • UK 10-Year GILTs are higher with yields down -4.6 basis points to 1.475%

Asian Stocks

  • Asia stocks traded in a tight range, closing in the red as investors awaited Tencent (SEHK:700, ADR: TCEHY) earnings after the market close in Hong Kong 
  • The Nikkei 225 finished up +0.16%, the Hang Seng ended down -0.54%, the Hang Seng China Enterprise declined -0.7%, and the CSI 300 was -1%
  • Japanese GDP contracted 1.2% in 3Q, worse than the 1% contraction expected by market forecasters as the impact of the September earthquake in Hokkaido was a drag on productivity this quarter – GDP is expected to rebound in 4Q
  • Volume in Hong Kong was weaker than normal with total turnover little more than 40% below the rolling 20-day average for volume traded on the Hong Kong Stock Exchange 
  • China retail sales grew +8.6% in October 2018, a deceleration from the +9.2% pace in September 2018 and below market expectations for +9.2%
  • Investor sentiment for Japanese stocks finished positive with the advance/decline ratio for the Nikkei 225 closing at 1.59x
  • 4 stocks in the Nikkei 225 hit 4-week highs while 35 stocks reached 4-week lows
  • 3 stocks in the Nikkei 225 closed overbought while 13 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 0.72x
  • 2 stocks in the Hang Seng hit 4-week highs while 4 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 -0.1 basis points to -0.139%
  • Japan 10-Year Government Bonds are higher with yields down -0.3 basis points to 0.111%
  • JGBs 2s-10s Spread has narrowed 0.2 basis points to 0.25%
  • JPY¥ is currently little changed against the USD$ at 113.9

 

*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
Alphabet Inc 1614 8 10 7 0.05% 2.25%
Microsoft Corp 1016 6.86 30 30 4.56% 4.81%
Goldman Sachs Group Inc/The 896 6.86 21 18 4.29% 2.94%
Netflix Inc 832 7.43 -10 -10 0.94% -1.44%
Morgan Stanley 816 7.29 8 3 6.34% 3.6%

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
Wells Fargo & Co 454 8.43 -11 -12 -1.08% 2.47%
Bank of New York Mellon Corp/The 135 8.14 8 3 1.02% 0.53%
PepsiCo Inc 121 8 0 -20 -0.06% 0.54%
BlackRock Inc 401 8 2 4 -2.6% -3.63%
Alphabet Inc 1614 8 10 7 0.05% 2.25%

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 16.85 90.08% 16.48 91.27% 0.98 15.48% -3.41 18.85% 0.65 38.1%
QQQ 25.02 94.84% 22.4 95.24% 0.9 10.91% -7.35 13.89% -2.02 26.59%
IWM 21.66 95.24% 19.86 94.84% 0.92 6.75% -2.3 17.46% 1.63 39.68%
FEZ 17.21 81.35% 16.38 78.37% 0.95 19.05% -1.96 24.6% -0.17 42.06%
EEM 24.42 94.84% 22.47 94.05% 0.92 5.36% -4.21 13.89% -1.25 31.75%

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
BLACKBAUD INC BLKB Information Technology Software 2.5% -0.96% -27.55%
SHERWIN-WILLIAMS CO SHW Materials Chemicals 1.87% 2.85% 1.37%
WESTERN UNION CO WU Information Technology IT Services 1.76% 2.19% 1.87%
STERLING BANCORP STL Financials Banks 1.68% 1.3% -26.08%
OGE ENERGY CORP OGE Utilities Electric Utilities 1.54% 5.11% 22.12%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
TYSON FOODS INC  -CL A TSN Consumer Staples Food Products -5.75% -6.41% -31.31%
LIGAND PHARMACEUTICAL INC LGND Health Care Biotechnology -4.63% -7.49% 6.83%
WEX INC WEX Information Technology IT Services -2.07% -3.69% 12.9%
HENRY (JACK) & ASSOCIATES JKHY Information Technology IT Services -1.86% -8.32% 18.57%
DOMINO'S PIZZA INC DPZ Consumer Discretionary Hotels, Restaurants & Leisure -1.64% 0.44% 35.42%

Source: S&P Capital IQ, StockDio

Top Short Winners and Losers

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Winners Ticker Sector Industry 1D Return 5D Return YTD
MADRIGAL PHARMACEUTICALS INC MDGL Health Care Biotechnology -24.33% -35.42% 40.61%
FOCUS FINANCL PRTNR LLC-REDH FOCS Financials Capital Markets -12.72% -18.52% -16.03%
CARRIZO OIL & GAS INC CRZO Energy Oil, Gas & Consumable Fuels -9.19% -11.42% -30.67%
WHITING PETROLEUM CORP WLL Energy Oil, Gas & Consumable Fuels -9.12% -12.46% 13.8%
IMMUNOMEDICS INC IMMU Health Care Biotechnology -8.4% -23.14% 16.73%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
SANGAMO THERAPEUTICS INC SGMO Health Care Biotechnology 7.6% -24.8% -48.55%
GENERAL ELECTRIC CO GE Industrials Industrial Conglomerates 7.47% -8.99% -70.98%
CIRRUS LOGIC INC CRUS Information Technology Semiconductors & Semiconductor Equipment 5.19% -10.17% -34.92%
CREE INC CREE Information Technology Semiconductors & Semiconductor Equipment 5.07% 7.78% 13.56%
FINISAR CORP FNSR Information Technology Communications Equipment 4.62% 25.24% 3.39%

Source: S&P Capital IQ, StockDio

Cryptos

  • A judge has ruled in favor of the Canadian Imperial Bank of Commerce (CIBC) in a dispute concerning a USD$19.6 million sum with Canada’s largest cryptocurrency exchange, QuadrigaCX. In October, the CIBC froze five accounts belonging to QuadrigaCX’s payment processor, Custodian Inc., and its owner, Jose Reyes, because it reportedly could not identify the funds’ owners. While QuadrigaCX argued to have the funds unfrozen, claiming they were the undisputed owner of large part of the funds, Judge Glenn Hainey ruled in favor of the CIBC, agreeing that the owner of the funds were not clearly established.  
  • Christine Lagarde, managing director and head of the International Monetary Fund (IMF) said in a speech at the Singapore Fintech Festival today that the international community should consider endorsing central bank issued digital currencies. In her speech, Lagarde said, “I believe we should consider the possibility to issue digital currency. There may be a role for the state to supply money to the digital economy.” Lagarde’s speech comes just one day after the IMF published a report examining the pros and cons of central bank issued digital currencies, which notes that central bank issued digital currencies could satisfy public safety goals, facilitate financial inclusion, add security and consumer protections, and create privacy in payments.  
  • The Lightning Network, a second layer solution implemented on the Bitcoin mainnet, has surpassed 4,000 total nodes for the first time, setting an all-time high record for network capacity. As of the time of this writing, 4,036 total nodes exist on the Lightning Network, creating a network capacity of 122.97 BTC (USD$775,286.79). On Monday, Alex Bosworth, Lightning Network infrastructure lead at developer Lightning, revealed that the community has agreed on improvements to implement in the Lightning Network, as a result of meetings at a September summit in Australia. Meanwhile, Stellar (XLM) has pledged to add Lightning Network capabilities before the end of 2018.  
  • The Thai Securities and Exchange Commission (Thai SEC) has told cryptocurrency exchange Q Exchange to cease advertising while warning citizens not to use the cryptocurrency due to legal uncertainty. Q Exchange, a joint Thai and South Korean crypto exchange venture, has not officially been endorsed by the Thai SEC as it may not fall within the framework of the country’s new cryptocurrency laws. As per a Thai royal decree issued in May this year, cryptocurrency exchanges and businesses must seek permission from and register with Thai authorities beginning operations in the country. 
     

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
ZTO Express (Cayman) Inc. ZTO 11/14/2018 Earnings Release Date China All-Cap: C
Vipshop Holdings Limited VIPS 11/14/2018 Earnings Release Date China All-Cap: D
The Progressive Corporation PGR 11/14/2018 Earnings Release Date US Large-Cap: A
Macy's, Inc. M 11/14/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: C
NetApp, Inc. NTAP 11/14/2018 Earnings Release Date US Large-Cap: C, US Information Technology: A
Esterline Technologies Corporation ESL 11/14/2018 Estimated Earnings Release Date US Large-Cap: C, US Industrials: D
IGG Inc SEHK:799 11/14/2018 Estimated Earnings Release Date China All-Cap: C
Zheng Li Holdings Limited SEHK:8283 11/14/2018 Estimated Earnings Release Date China All-Cap: D
Applied Materials, Inc. AMAT 11/14/2018 Estimated Earnings Release Date US Large-Cap: C, US Information Technology: B
Nordstrom, Inc. JWN 11/14/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: B
NVIDIA Corporation NVDA 11/14/2018 Earnings Release Date US Large-Cap: B, US Information Technology: A
Sonos, Inc. SONO 11/14/2018 Earnings Release Date US Large-Cap: F
Future Land Development Holdings Limited SEHK:1030 11/14/2018 Estimated Earnings Release Date China All-Cap: C
Jinchuan Group International Resources Co. Ltd SEHK:2362 11/14/2018 Estimated Earnings Release Date China All-Cap: C
China Grand Pharmaceutical and Healthcare Holdings Limited SEHK:512 11/14/2018 Estimated Earnings Release Date China All-Cap: B
China Investment Fund International Holdings Limited SEHK:612 11/14/2018 Estimated Earnings Release Date China All-Cap: C
CAR Inc. SEHK:699 11/14/2018 Estimated Earnings Release Date China All-Cap: C
Truly International Holdings Limited SEHK:732 11/14/2018 Estimated Earnings Release Date China All-Cap: D
Tiangong International Company Limited SEHK:826 11/14/2018 Estimated Earnings Release Date China All-Cap: C
Cathay Pacific Airways Limited SEHK:293 11/14/2018 Estimated Earnings Release Date China All-Cap: C
NetEase, Inc. NTES 11/14/2018 Earnings Release Date China All-Cap: C
Huazhu Group Limited HTHT 11/15/2018 Earnings Release Date China All-Cap: D
RISE Education Cayman Ltd REDU 11/15/2018 Earnings Release Date China All-Cap: B
Walmart Inc. WMT 11/15/2018 Earnings Release Date US Large-Cap: B, US Consumer Staples: A
58.com Inc. WUBA 11/15/2018 Earnings Release Date China All-Cap: C
J. C. Penney Company, Inc. JCP 11/15/2018 Earnings Release Date US Consumer Discretionary: F
Berry Global Group, Inc. BERY 11/15/2018 Earnings Release Date US Large-Cap: C
Energizer Holdings, Inc. ENR 11/15/2018 Earnings Release Date US Large-Cap: C, US Consumer Staples: C
Post Holdings, Inc. POST 11/15/2018 Earnings Release Date US Large-Cap: B, US Consumer Staples: A
Williams-Sonoma, Inc. WSM 11/15/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: C
CK Hutchison Holdings Limited SEHK:1 11/15/2018 Estimated Earnings Release Date China All-Cap: B
Yuexiu Transport Infrastructure Limited SEHK:1052 11/15/2018 Estimated Earnings Release Date China All-Cap: A
Kingboard Holdings Limited SEHK:148 11/15/2018 Estimated Earnings Release Date China All-Cap: D
Swire Pacific Limited SEHK:19 11/15/2018 Estimated Earnings Release Date China All-Cap: C
Melco International Development Limited SEHK:200 11/15/2018 Estimated Earnings Release Date China All-Cap: D
Sinotrans Shipping Limited SEHK:368 11/15/2018 Estimated Earnings Release Date China All-Cap: C
Yuexiu Real Estate Investment Trust SEHK:405 11/15/2018 Estimated Earnings Release Date China All-Cap: B
Landing International Development Limited SEHK:582 11/15/2018 Estimated Earnings Release Date China All-Cap: D
MTR Corporation Limited SEHK:66 11/15/2018 Estimated Earnings Release Date China All-Cap: B
Shandong Weigao Group Medical Polymer Company Limited SEHK:1066 11/15/2018 Estimated Earnings Release Date China All-Cap: B
Dillard's, Inc. DDS 11/15/2018 Estimated Earnings Release Date US Large-Cap: C, US Consumer Discretionary: D
Towngas China Company Limited SEHK:1083 11/15/2018 Estimated Earnings Release Date China All-Cap: C
Ping An Healthcare and Technology Company Limited SEHK:1833 11/15/2018 Estimated Earnings Release Date China All-Cap: F
CITIC Telecom International Holdings Limited SEHK:1883 11/15/2018 Estimated Earnings Release Date China All-Cap: A
Man Wah Holdings Limited SEHK:1999 11/15/2018 Estimated Earnings Release Date China All-Cap: C
Champion Real Estate Investment Trust SEHK:2778 11/15/2018 Estimated Earnings Release Date China All-Cap: B
Momo Inc. MOMO 11/15/2018 Estimated Earnings Release Date China All-Cap: B
Secoo Holding Limited SECO 11/15/2018 Estimated Earnings Release Date China All-Cap: D

Source: S&P Capital IQ