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Global stocks are dropping as the hopes for an imminent end to the US-China trade conflict fades

Nov 16, 2018


Market data as of 7am

US Stocks

  • Global stocks are declining to start the morning as investor hopes for an imminent end to the US-China trade conflict fades following comments by US trade officials  
  • US stocks index futures are dropping this morning, pointing to a negative open in NY with front-month Dow Jones minis –0.47%, S&P500 minis –0.55% and Nasdaq 100 minis –1.15%
  • US Commerce Secretary Wilbur Ross cooled optimism for an imminent end to the US-China trade conflict, suggesting that at best, US President Donald Trump and Chinese President Xi Jinping will agree to a “framework” for further talks at the G20 Summit later this month in Argentina 
  • US Industrial Production and Capacity Utilization figures for October will be released at 9:15am today 
  • The ratio of the Nasdaq 100 to the S&P500 has dropped nearly 5% since late July, suggesting that large-cap tech stocks may lose their status as US stock market leaders -- concerns about future growth at FANG stocks Facebook (FB), Amazon.com (AMZN), Netflix (NFLX) and Alphabet (GOOG.L) has been a primary driver of tech stocks underperformance
  • The S&P500 US Consumer Discretionary stocks are on pace for the worst quarter since September 2011, down little more than 10% for 4Q
  • The VIX is little changed this morning and is currently at 20.61 after closing at 20.04 yesterday
  • SPY November 16 & December 31 OTM Puts, USO December 28 OTM Calls, BKLN April 2019 OTM Puts, EEM December 21 OTTM Puts and QQQ November 16 OTM Puts are the most actively traded options contracts in the US pre-market 
  • US 10-Year Treasury Bonds are lower with yields up 0.37 basis points to 3.114%
  • The US Treasury 2s-10s Spread has narrowed 0.44 basis points to 0.25%
  • WTI Crude is currently up 0.37% to USD$56.46/bbl with the Brent-WTI spread up USD$1.38 to USD$10.47/bbl
  • Gold is currently up 0.3% to USD$1217.05/oz
  • Global oil prices are rallying into week end, paring their weekly loss, as it is becoming increasingly clear that OPEC plans to go ahead with plans to cut total production by ~1.4 million barrels in CY2019
  • Metals stocks are headed for the first weekly gain in a while with both gold and copper posting their first weekly gains since October
     

Stocks Trending in the News

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

  • Anadarko Petroleum (APC) cut its spending by 3% next year and will apply the spending cut to buybacks and payouts.  Anadarko Petroleum is targeting UD$4.5 billion in spending, USD$150mn less than initially expected.   Despite cutting spending, output is expected to grow 10% next year with its dividend growing at twice that rate.  Anadarko Petroleum is benefitting from additional shale wells increasing production.  Anadarko Petroleum is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Applied Materials (AMAT) provided guidance for 1Q revenue below consensus.  Applied Materials sees first quarter sales of USD$3.56-3.86 billion which is below present consensus of USD$3.96 billion.  Adjusted earnings per shares will be 75-83 cents while consensus is 92 cents.  Applied Materials’ CEO said “near-term” market headwinds remain”.  Applied Materials is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • BlackBerry (BB) confirmed its acquisition of Cylance Inc.  BlackBerry will pay USD$1.4 billion for the cybersecurity firm as it seeks to bolster its artificial intelligence capabilities.  This purchase is BlackBerry’ largest acquisition in 7 years.  BlackBerry is not rated in our Global Top Stock Ideas.
  • Boeing’s (BA) bulletin advising airlines about the sensor problem implicated in the Lion Air crashed has caused Chinese aviation authorities to order all airlines flying the 737 Max to update flight manuals.  Boeing advised how to deal with a potential malfunction of the sensor that can force the nose of the plane lower unexpectedly.  China is ordering airlines to address this immediately.  Boeing is rated “Attractive” in both our US Large-Cap and US Industrials Global Top Stock Ideas.
  • Huawei Technologies Co. (SZSE: 002502) aims to dethrone Apple (AAPL) as the number one global smartphone maker, as per CEO Richard Yu’s comments in a CNBC interview, where he said, “Next year, we will be very close to number one, maybe we will be on par with Samsung.” Yu went on to mention that the US-Sino trade war has created a barrier to the US for Huawei, allowing the technology company to focus on other global markets. Huawei is not rated in our Global Top Stock Ideas. Apple is rated “Attractive” in both our US Large-Cap Global Top Stock Ideas and US Information Technology Global Top Stock Ideas.
  • Microsoft (MSFT) is the current favorite tech giant among hedge funds after 3Q 13F filings revealed that money managers moved away from companies like Alphabet Inc. (GOOGL) and Amazon.com (AMZN) In favor of the old-school stalwart. As of 3Q, hedge funds invested USD$24.6bn of capital in Microsoft, followed closely by Alphabet with USD$24.5bn and Amazon trailing behind with USD$17.5bn.  Microsoft is rated “Neutral in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas. Alphabet is rated “Neutral in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas. 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.
  • Nintendo (7974 JP) had its price target cut to 54,200 yen from 55,200 at Daiwa Securities as the woes mount for the company.  Nintendo saw a weak debut of its most recent Pokemon game but has seen brisk sales of its Switch console.  Nintendo closed over 9% lower on the news.  Nintendo is not rated in our Global Top Stock Ideas.
  • Nvidia (NVDA) gave a disappointing forecast for the coming quarter with analysts commenting that there is evidence of a loss of demand in the guidance.  Nvidia sees USD$2.7 billion in revenue while the average estimate of analysts is USD$34 billion.  Nvidia said it expects sellers to lower prices to clear out excess inventory that grew to USD$1.42 billion, up from USD$1.09 billion last quarter.  Nvidia is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • PG&E (PCG) rallied in after-hours trading yesterday after California regulator said it can’t imagine letting PG&E go bankrupt.  The head of California’s Public Utility Commission said, in discussing PG&E, “They have to have stability and economic support to get the dollars they need right now” which caused the stock to rally up to 49% in post-market trading yesterday.  PG&E is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Taiwan Semiconductor Manufacturing (TSMC) shares are falling in pre-market trading after the world’s largest contract chipmaker announced that it suffered a NT$2.596bn (USD$84.28) loss from a virus that infected its computer system in August. Booked as an operating expense, the loss was offset by gains from foreign currency conversion. Following the announcement, Morgan Stanley downgraded TSMC’s recommendation from overweight to equal-weight while cutting the price target from NT$253/share to NT$239/share. TSMC is not rated in our Global Top Stock Ideas.
  • Viacom (VIAB) reports FY4Q2018 financials pre-market and delivers full-year consolidated income growth for the first time since 2014. In FY4Q2018, Viacom saw revenue increase 5% y/y to USD$3.49bn from USD$3.32bn a year ago. Driving the 5% y/y revenue increase was Viacom’s Paramount Pictures business, which saw double digit y/y bottom-line income growth to USD$241mm. Investors appear to be reacting positively to the financials release with Viacom trading higher pre-market. Viacom is rated “Unattractive’ in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Vivendi (VIV IM) said it is making progress with its sale of Universal Music Group, sending the stock over 10% higher.  Vivendi is speaking to 15 banks regarding the sale and will whittle the list down to between 5 and 7.  The sale of Universal Music Group could reap upwards of 20 billion euros according to analysts.  Vivendi expects to complete the sale over the next 12-18 months.  Vivendi is rated “Attractive” in our European Large-Cap Global Top Stock Ideas.
     

 

European Stocks

  • European stocks are declining this AM, well off their early morning highs following comments by US Commerce Secretary Wilbur Ross walk back optimism for a US-China trade deal at the G20 summit in Argentina 
  • The Euro Stoxx 600 is currently up +0.01%, the FTSE 100 has declined -0.31%, the DAX has advanced +0.08%, and the CAC 40 is lower by -0.11%
  • According to Bloomberg, stocks strategists still need to adjust priced targets for major benchmark stocks indices – the average CY2018 price target for the Euro Stoxx 50 implies an 8% rally into year-end; the average CY2018 price target for the DAX implied an 11% rally into year-end
  • Investor sentiment for European stocks is positive with the advance/decline ratio for the Euro Stoxx 600 currently at 1.27x
  • Industrial Goods & Services (+0.14%), Real Estate (-0.52%), and Health Care (+0.03%) stocks are the top performers in the Euro Stoxx 600 today
  • Retail (+0.05%), Telecommunications (+0.18%), and Construction & Materials (-0.25%) stocks are the worst performers in the Euro Stoxx 600 today
  • 56 stocks in the Euro Stoxx 600 are at 4-week highs while 68 stocks are at 4-week lows
  • 8 stocks in the Euro Stoxx 600 are overbought while 38 stocks are oversold according to the 16-day RSI Measure
  • EUR€ is currently little changed against the USD$ at 1.1332
  • GBP£ is currently up +0.384% against the USD$ to 1.2823
  • CHF is currently little changed against the USD$ at 0.9924
  • German 10-Year Bunds are lower with yields up 0.8 basis points to 0.368%
  • UK 10-Year GILTs are lower with yields up 3.6 basis points to 1.409%
     

Asian Stocks

  • Asia stocks finished the last day of trading this week mixed with semiconductor stocks dropping USD$11.2 billion in market value following weak earnings guidance from Nividia (NVDA) and Applied Materials (AMAT) 
  • The Nikkei 225 finished down --0.57%, the Hang Seng ended up +0.31%, the Hang Seng China Enterprise up +0.27%, and the CSI 300 was +0.47%
  • In contrast to US and European markets, reports that US and Chinese trade officials are discussing a specific agenda for a meeting between US President Donald Trump and Chinese President Xi Jinping put a bid into Chinese and Hong Kong stock markets
  • Investor sentiment for Japanese stocks finished negative with the advance/decline ratio for the Nikkei 225 closing at 0.6x
  • 10 stocks in the Nikkei 225 hit 4-week highs while 29 stocks reached 4-week lows
  • 5 stocks in the Nikkei 225 closed overbought while 8 stocks closed oversold according to the 16-day RSI Measure
  • Investor sentiment for Hong Kong stocks finished neutral with the advance/decline ratio for the Hang Seng closing at 1.08x
  • 11 stocks in the Hang Seng hit 4-week highs while 0 stocks reached 4-week lows
  • 0 stocks in the Hang Seng closed overbought while 0 stocks closed oversold according to the 16-day RSI Measure
  • Japan 2-Year Government Bonds are higher with yields down -0.5 basis points to -0.139%
  • Japan 10-Year Government Bonds are higher with yields down -0.5 basis points to 0.104%
  • JGBs 2s-10s Spread has little changed 0 basis points to 0.24%
  • China RMB 2-Year Government Bonds are flat with yields little changed 0 basis points to 2.865%
  • China RMB 10-Year Government Bonds are higher with yields down -5 basis points to 3.362%
  • China Government RMB 2s-10s Spread has narrowed 5 basis points to 0.5%
  • JPY¥ is currently down -0.282% against the USD$ to 113.32

 

*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 1561 7.43 10 7 0.05% 2.25%
Microsoft Corp 1014 6.71 30 30 4.74% 4.81%
Goldman Sachs Group Inc/The 907 6 21 18 0.32% 2.94%
Morgan Stanley 781 6.57 8 3 0.89% 3.6%
Walmart Inc 780 6.86 -10 0 0.43% -2.22%

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 439 8.43 -11 -12 -0.03% 2.47%
Cisco Systems Inc 400 8.14 2 25 3.27% 3.48%
MetLife Inc 39 8 12 14 4.81% 4.38%
BlackRock Inc 374 8 2 4 -1.05% -3.58%
NVIDIA Corp 325 7.86 -6 4 3.38% 5.89%

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 17.63 92.86% 16.79 92.46% 0.95 7.34% -2.57 23.41% 0.76 38.89%
QQQ 24.14 90.48% 22.29 93.65% 0.92 15.28% -8.16 12.7% -2.42 25.79%
IWM 20.93 92.66% 19.53 92.86% 0.93 8.93% -3.01 16.27% 1.2 35.71%
FEZ 19.98 94.05% 16.33 76.59% 0.82 2.18% 2.1 67.66% 0.08 48.02%
EEM 24.61 95.24% 22.74 95.63% 0.92 5.95% -3.22 17.26% -1.26 32.14%

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
BERRY GLOBAL GROUP INC BERY Materials Containers & Packaging 9.17% 7.77% -16.63%
BROADCOM INC AVGO Information Technology Semiconductors & Semiconductor Equipment 4.39% -1.64% -9.38%
FLEETCOR TECHNOLOGIES INC FLT Information Technology IT Services 3.73% -3.16% 2.21%
SEI INVESTMENTS CO SEIC Financials Capital Markets 3.43% -1.2% -26.45%
NORFOLK SOUTHERN CORP NSC Industrials Road & Rail 3.22% 0.31% 18.17%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
PPL CORP PPL Utilities Electric Utilities -5.36% -3.1% 4.08%
PG&E CORP PCG Utilities Electric Utilities -36.64% -99.12% -91.94%
CONSOLIDATED EDISON INC ED Utilities Multi-Utilities -3.69% -1.21% -5.12%
DOMINO'S PIZZA INC DPZ Consumer Discretionary Hotels, Restaurants & Leisure -2.47% -5.08% 33.48%
DOLLAR GENERAL CORP DG Consumer Discretionary Multiline Retail -2.23% -5.02% 18.41%

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 -7.97% -36.72% 30.91%
MACERICH CO MAC Real Estate Equity Real Estate Investment Trusts (REITs) -5.11% -4.07% -26.18%
SOUTHWESTERN ENERGY CO SWN Energy Oil, Gas & Consumable Fuels -5.01% -4.66% -8.1%
SPARK THERAPEUTICS INC ONCE Health Care Biotechnology -4.54% -16.51% -31.26%
BLOOM ENERGY CORP-REDH BE Industrials Electrical Equipment -11.19% -15.71% -48.06%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
SANGAMO THERAPEUTICS INC SGMO Health Care Biotechnology 8.56% -27.36% -52.71%
ARRAY BIOPHARMA INC ARRY Health Care Biotechnology 7.81% -9.99% 14.79%
NEUROCRINE BIOSCIENCES INC NBIX Health Care Biotechnology 6.28% -16.64% 14.54%
ACADIA PHARMACEUTICALS INC ACAD Health Care Biotechnology 6.09% -3.27% -49.07%
PENNEY (J C) CO JCP Consumer Discretionary Multiline Retail 10.86% -6.41% -94.53%

Source: S&P Capital IQ, StockDio

Cryptos

  • A joint report by the Bank of England, the Bank of Canada, and the Monetary Authority of Singapore identifies central bank digital currencies as one of the potential solutions to challenges faced when making cross-border payments. As per the report, central bank digital currencies offer strategic advantages like 24-hour availability, anonymity, and the elimination of counterparty credit risk. The report outlines three models of wholesale-central bank digital currencies that could potentially be implemented based on geographical reach or acceptability.  
  • As per a report by the Wall Street Journal, the United States Securities and Exchange Commission (US SEC) has opened a probe into cryptocurrency loans company Salt Lending Holdings, a venture once associated with crypto industry leader Erik Voorhees. According to the report, the US SEC’s probe concerns Salt Lending’s 2017 USD$50 million token sale -- specifically, the probe will assess whether or not the token sale complied with US securities laws, how the tokens were used, and through what system Salt Lending employees received tokens. Founded in 2016, Slat Lending leverages clients’ cryptocurrency holdings as collateral against fiat currency loans.  
  • Maksim Zaslavskiy, the suspect at the center of the United States’ first initial coin offering (CIO) fraud case, is pleading guilty and sending the case to its final stages. As pe a Bloomberg report yesterday, Zaslavskiy could face up to 37 months in prison after defrauding investors who injected capital into two different ICOs last year. Zaslavskiy’s charges concern ICOs REcoin and Diamond Reserve Coin, two tokens that claimed to be backed by real estate and diamonds, respectively. “I, along with others, made these false statements to obtain money from investors,” said Zaslavkiy, adding, “We had not yet purchased any real estate, we had not purchased any diamonds.” 
  • The Central Bank of Azerbaijan (CBA) ruled out the possibility of the monetary authority issuing a central bank digital currency. While speaking to reporters in Baku, CBA first Chairman Alim Guliyev said that the CBA believes cryptocurrencies, digital currencies, and similar financial instruments, “come with great risks.” Specifically, Guliyev cited concerns of money laundering as the major reason for the CBA’s aversion to the possibility of a central bank digital currency. 
     

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
Viacom, Inc. VIAB 11/16/2018 Earnings Release Date US Large-Cap: D, US Consumer Discretionary: B
Helmerich & Payne, Inc. HP 11/16/2018 Earnings Release Date US Large-Cap: D
Li Ning Company Limited SEHK:2331 11/16/2018 Estimated Earnings Release Date China All-Cap: B
Orient Overseas (International) Limited SEHK:316 11/16/2018 Estimated Earnings Release Date China All-Cap: F
Sun Art Retail Group Limited SEHK:6808 11/16/2018 Estimated Earnings Release Date China All-Cap: B
China Youzan Limited SEHK:8083 11/16/2018 Estimated Earnings Release Date China All-Cap: D
Zhongsheng Group Holdings Limited SEHK:881 11/16/2018 Estimated Earnings Release Date China All-Cap: C
China Aoyuan Property Group Limited SEHK:3883 11/16/2018 Estimated Earnings Release Date China All-Cap: D
SOHO China Limited SEHK:410 11/16/2018 Estimated Earnings Release Date China All-Cap: C
SuperRobotics Limited SEHK:8176 11/17/2018 Estimated Earnings Release Date China All-Cap: C
Uni-President China Holdings Ltd SEHK:220 11/17/2018 Estimated Earnings Release Date China All-Cap: B
Legend Holdings Corporation SEHK:3396 11/17/2018 Estimated Earnings Release Date China All-Cap: C
Chinasoft International Limited SEHK:354 11/18/2018 Estimated Earnings Release Date China All-Cap: C
Grace Wine Holdings Limited SEHK:8146 11/18/2018 Estimated Earnings Release Date China All-Cap: F
Alibaba Health Information Technology Limited SEHK:241 11/18/2018 Earnings Release Date China All-Cap: C
Urban Outfitters, Inc. URBN 11/18/2018 Earnings Release Date US Large-Cap: A, US Consumer Discretionary: B
CSPC Pharmaceutical Group Limited SEHK:1093 11/18/2018 Earnings Release Date China All-Cap: A
X Financial XYF 11/18/2018 Earnings Release Date China All-Cap: D
JD.com, Inc. JD 11/18/2018 Earnings Release Date China All-Cap: F

Source: S&P Capital IQ