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Morning Brief

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

Global stocks are mixed to start short week in US

Nov 19, 2018


Market day as of 7am
 

US Stocks

  • Global stocks are mixed this morning as the rally in European stocks is capped by negative news surrounding Renault (ENXTPA:RNO) while US stocks index futures are dropping on concerns that  US-China trade tensions could escalate
  • US stocks index futures are declining to start the holiday week in the US, pointing to a negative open in NY with front-month Dow Jones minis –0.34%, S&P500 minis –0.37% and Nasdaq 100 minis –0.36% 
  • US Vice President suggests that countries should avoid issuing debt that will leave them indebted to China and hints that the US isn’t in a rush to end the escalating rhetoric on trade with China 
  • Barclays stocks strategists are arguing that they don’t see any material reason that US stocks outperformance of European stocks will change in CY2-0018 though caution against the impact of a slowdown in US EPS growth and its impact on global stock valuations
  • RBC Capital Markets argues that hedge funds are becoming more cautious/defensive as their analysis of hedge funds holdings suggests managers are loading up on consumer staples stocks -- our blog post last week on utilities stocks, Have the Stars Aligned for Utility Stocks?, highlights that utility stocks continue to be a favorite holding of investors and traders
  • HYG December 21 & February 2019 OTM Puts, EEM December 21 & January 2019 OTM Calls and USO January 2018 OTM Calls are the most actively traded options contracts in the US pre-market
  • The VIX is little changed this morning and is currently at 19.07 after closing at 18.14 last week
  • US 10-Year Treasury Bonds are lower with yields up 2.19 basis points to 3.0847%
  • The US Treasury 2s-10s Spread has widened 0.13 basis points to 0.26%
  • WTI Crude is currently little changed at USD$56.46/bbl with the Brent-WTI spread little changed USD$-0.12 to USD$9.78/bbl
  • Gold is currently little changed -0.13% to USD$1221.82/oz
  • The Russian government is holding off from supporting OPEC suggestions for a production of 1.4 million barrels/day -- the Russian government argues that producers need to better understand current global conditions and the “winter outlook” before agreeing to supply cuts
     

Stocks Trending in the News

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

  • Amazon (AMZN) is planning to be your last minute savior at Thanksgiving this year, offering last minute delivery of groceries until 2pm.  Amazon is looking to gain an edge helping customers with last minute meal prep.  Amazon is experimenting with this service as it seeks to gain an edge.  It is trying build on its success in last minute delivery for Christmas last year.  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.
  • Charles Schwab (SCHW) was downgraded at UBS today.  UBS cut the stock to neutral from buy.  UBS also cut the price target of Charles Schwab to USD$51 from USD$57.  UBS comments that while Charles Schwab is growing faster than traditional asset managers UBS sees “compression on market sensitive revenues” going forward which contributed to the downgrade.  Charles Schwab is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • An article by the Financial Times questions whether USD$40bn of asset sales will be enough to sustain General Electric (GE), discussing a potential long-term bear case for the US-based conglomerate. The article cites a note published by JPMorgan analyst Stephen Tusa, which argues that a “real bear case” is longer-term, noting that General Electric has USD$100bn in liabilities and zero enterprise free cash flow despite cutting its quarterly dividend from USD$0.12/share to USD$0.01/share. In a CNBC interview, CEO Larry Culp said he has, “no higher priority right now,” than cutting GE’s debts by raising cash through the selling of assets. General Electric is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Industrials Global Top Stock Ideas.
  • JD.com (JD) shares are lower in pre-market trading after posting lower-than-expected revenue for FY3Q2018 and recording its first q/q drop in annual active users since initially listing. JD.com reported FY3Q2018 revenue of 104.8bn yuan while analysts’ consensus called for 105.7bn yuan.  Annual active users, meanwhile, grew 15% y/y to 305.2mm, although it fell 2.74% q/q from 313.8mm in FY2Q2018. JD.com is rated “Top Short” in our China All-Cap Global Top Stock Ideas.
  • The CEO of Renault-Nissan-Mitsubishi, Carlos Ghosn, has been arrested in Japan for financial improprieties, according to the Japanese press.  Nissan (7201 JP) confirmed he had underreported income “over many years” and he was taken into custody overnight.  Renault (RNO FP) and Mitsubishi (7011 JP) have yet to make a statement on the matter.  Nissan also said it will remove him as chairman.  Nissan is rated is rated “Attractive” in our Japan Large-Cap Global Top Stock Ideas.    Mitsubishi is rated “Top Buy” in our Japan Large-Cap Global Top Stock Ideas.  Renault is rated “neutral” in our European Large-Cap Global Top Stock Ideas.
  • Novo Nordisk (NOVOB DC) was upgraded to overweight from neutral by JP Morgan today.  Novo Nordisk has its price target hiked to 340 kroner from 290 kroner.  Novo Nordisk is entering “a new period of sustainable growth” well into 2019 and is expected to drive outperformance, according to JP Morgan’s report.    Novo Nordisk is rated “neutral” in our European Large-Cap Global Top Stock Ideas.
  • NVIDIA Corporation (NVDA) shares plummeted on Friday and are slightly negative in pre-market trading after the chip-maker gave a disappointing forecast for its current quarter and faced issues with its cryptocurrency mining business segment. A Wall Street Journal article discusses that NVIDIA’s decline will take time to recover, citing analyst forecasts the project NVIDIA’s revenue to fall over the next three quarters. Two-thirds of analysts, however, maintain a “Buy” rating on Nvidia. 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.
  • TD Ameritrade (AMTD) was upgraded at UBS today.  UBS hiked the TD Ameritrade rating on the stock to buy from neutral.  TD Ameritrade saw its price target raised to USD$60 from USD$58.  UBS said it believes there is “misperceptions about risk” with TD Ameritrade and the present level would be an attractive entry point.  TD Ameritrade is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Vallourec (VK FP) shares have fallen to the lowest level in a year after 2 downgrades to the stock.  Vallourec was downgraded at SocGen to sell from hold with its price target lowered to 2.28 euros.  Kepler Cheuvreux cut Vallourec to hold from buy while cutting the price target to 3.40 euros.  The downgrades come in the wake of Vallourec reporting cash outflows in 3Q, igniting concern among investors.  Vallourec is rated “neutral” in our European SMID-Cap Global Top Stock Ideas.
  • Xiaomi (1810 HK) reported a 49% jump in 3Q revenue, above expectations, on the strength of sales in emerging markets.  Xiaomi reported revenue of 50.85 billion yuan compared with 50.4 billion expected.  Xiaomi net income of 2.48 billion yuan compared with 1.45 billion expected.  Xiaomi is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
     

 

European Stocks

  • European stocks are advancing though gains for the benchmark regional indices are capped as Renault (ENXTPA:RNO) plunges following allegations of misconduct by its CEO  
  • Luigi Di Maio, the Deputy Premier of the Italian Coalition government, suggests the Italian government is open to dialog with the EU
  • The Euro Stoxx 600 is currently up +0.25%, the FTSE 100 is higher by +0.44%, the DAX has advanced +0.05%, and the CAC 40 has risen +0.18%
  • Investor sentiment for European stocks is positive with the advance/decline ratio for the Euro Stoxx 600 currently at 1.63x
  • Oil & Gas (-0.31%), Telecommunications (+0.67%), and Basic Resources (+0.45%) stocks are the top performers in the Euro Stoxx 600 today
  • Automobiles & Parts (+0.3%), Food & Beverage (+0.28%), and Utilities (+0.3%) stocks are the worst performers in the Euro Stoxx 600 today
  • 35 stocks in the Euro Stoxx 600 are at 4-week highs while 60 stocks are at 4-week lows
  • 11 stocks in the Euro Stoxx 600 are overbought while 39 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 17.7 after closing at 18.08 yesterday
  • EUR€ is currently little changed against the USD$ at 1.1427
  • GBP£ is currently little changed against the USD$ at 1.2847
  • CHF is currently up +0.36% against the USD$ to 1.0038
  • German 10-Year Bunds are lower with yields up 1.8 basis points to 0.385%
  • UK 10-Year GILTs are higher with yields down -1 basis points to 1.402%

Asian Stocks

  • Asia stocks  started the week positive on light volume, shrugging off aggressive talk by US Vice President towards China 
  • The Nikkei 225 finished up +0.65%, the Hang Seng ended up +0.72%, the Hang Seng China Enterprise up +0.45%, and the CSI 300 was +1.13%
  • Volume traded in Hong Kong and Tokyo were well below their 20-day average: turnover on the Hong Kong Stock Exchange was 15.5% below its 20-day average while volume traded in the Tokyo Stock Exchange was 18.0% below its 20-day average
  • Investor sentiment for Japanese stocks finished neutral with the advance/decline ratio for the Nikkei 225 closing at 1.16x
  • 21 stocks in the Nikkei 225 hit 4-week highs while 22 stocks reached 4-week lows
  • 4 stocks in the Nikkei 225 closed overbought while 12 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 4x
  • 8 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 10-Year Government Bonds are higher with yields down -0.7 basis points to 0.097%
  • JGBs 2s-10s Spread has narrowed 0.2 basis points to 0.24%

 

*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 1409 6.57 10 7 0.0% 2.2%
Microsoft Corp 973 6.29 30 30 4.67% 4.81%
Goldman Sachs Group Inc/The 918 5 21 18 -0.2% 2.94%
Walmart Inc 883 5.71 -10 0 1.06% -3.95%
Morgan Stanley 715 6.86 8 3 0.0% 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
MetLife Inc 67 9.71 12 14 4.81% 4.0%
BlackRock Inc 397 8.86 2 4 -0.05% -3.62%
Medtronic PLC 191 8.43 1 4 -0.06% 1.92%
Emerson Electric Co 43 8.29 -11 -10 3.61% 3.26%
Exelon Corp 10 8.14 10 14 4.5% 4.27%

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 15.31 82.54% 15.7 85.32% 1.03 27.18% -4.92 15.08% -0.34 36.9%
QQQ 22.43 86.11% 21.4 90.87% 0.95 20.44% -9.87 10.71% -3.31 23.02%
IWM 20.16 90.08% 19.56 92.86% 0.97 18.65% -3.55 13.89% 1.21 36.11%
FEZ 18.37 88.1% 16.29 76.19% 0.89 7.94% 0.74 53.77% 0.08 48.21%
EEM 24.98 95.63% 22.01 89.68% 0.88 1.59% -2.72 19.44% -1.79 25.79%

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
PG&E CORP PCG Utilities Electric Utilities 31.88% -49.23% -60.07%
DUNKIN' BRANDS GROUP INC DNKN Consumer Discretionary Hotels, Restaurants & Leisure 2.38% -1.75% 12.65%
FIRSTCASH INC FCFS Financials Consumer Finance 2.37% 5.56% 25.98%
UNITEDHEALTH GROUP INC UNH Health Care Health Care Providers & Services 2.3% -1.99% 21.38%
CME GROUP INC CME Financials Capital Markets 2.09% 3.05% 31.31%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
NEXSTAR MEDIA GROUP NXST Consumer Discretionary Media -2.08% -2.07% 4.6%
TJX COMPANIES INC TJX Consumer Discretionary Specialty Retail -1.89% -7.37% 31.09%
EAGLE MATERIALS INC EXP Materials Construction Materials -1.82% -4.03% -47.63%
KELLOGG CO K Consumer Staples Food Products -1.27% -5.18% -7.22%
VISA INC V Information Technology IT Services -1.18% -2.47% 20.88%

Source: S&P Capital IQ, StockDio

Top Short Winners and Losers

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Winners Ticker Sector Industry 1D Return 5D Return YTD
PENNEY (J C) CO JCP Consumer Discretionary Multiline Retail -5.28% -3.8% -99.81%
SNAP INC SNAP Information Technology Software -4.96% -4.52% -83.44%
AMBARELLA INC AMBA Information Technology Semiconductors & Semiconductor Equipment -4.21% -5.07% -62.78%
HERON THERAPEUTICS INC HRTX Health Care Biotechnology -4.18% -5.96% 36.73%
CHESAPEAKE ENERGY CORP CHK Energy Oil, Gas & Consumable Fuels -4.1% -1.39% -13.56%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
SANGAMO THERAPEUTICS INC SGMO Health Care Biotechnology 7.89% 0.45% -44.82%
TENABLE HOLDINGS INC TENB Information Technology Software 6.18% 4.49% 0.99%
SEATTLE GENETICS INC SGEN Health Care Biotechnology 5.44% -1.09% 2.29%
ALLAKOS INC ALLK Health Care Biotechnology 5.34% 10.39% 63.53%
ESPERION THERAPEUTICS INC ESPR Health Care Biotechnology 4.21% -11.71% -31.63%

Source: S&P Capital IQ, StockDio

Cryptos

  • Kraken, a US-based cryptocurrency exchange, is warning its users of the potential risks in trading the Bitcoin SV (BCH SV) token, the underlying token behind one of two of Bitcoin Cash’s new networks. In a Sunday blog post, Kraken said that the new BCH SV token, “does not meet Kraken’s usual listing requirements,” and, “should be seen as an extremely high risk investment.” Kraken goes on to cite risks associated with the investment, including that no wallets have yet supported replay protection for the BCH SV network, which is a way to prevent transactions from occurring on both BCH networks simultaneously. Kraken also discusses that BCH SV’s future may be “mutually exclusive” with other blockchains, due to developer leaders who have been “threatening” and “openly hostile” towards other blockchain networks.  
  • RIF Labs, the thinktank behind off-chain infrastructure solution RIF OS, has announced the acquisition of RSK Labs, the company behind Bitcoin-based smart contract protocol Rootstock (RSK). According to two separate blog posts published by each company, the deal will see RSK protocol developed to be integrated in both the Bitcoin and Ethereum network while supporting peer-to-peer transaction capabilities. RIF Labs’ blog post explains the acquisition further, saying, “The three principal components to the RIF OS announcement include the integration of RIF Labs and RSK Labs, the publications of RIF OS Protocols, and the launch of the first implementation of the RIF Directory Protocol (the Name Services component of RIS OF).” 
  • SIX Swiss Exchange, Switzerland’s most notable stock exchange, has announced the launch of the world’s first multi-crypto based exchange-traded product (ETP), set to roll out this week. As per a report by the Financial Times, Swiss startup Amun AG will list the world’s first multi-crypto ETP under the index ticker HODL while tracking five major cryptocurrencies: Bitcoin (BTC), Ripple (XRP), Ethereum (ETH), Bitcoin Cash (BCH), and Litecoin (LTC). Each cryptocurrency will maintain a specified weight in the ETP, with BTC accounting for roughly half of the ETP’s assets, XRP responsible for 25.4%, ETH responsible for 16.7%, and BCH and LTC representing 5.2% and 3.0%, respectively. The ETP will serve as a well-regulated tool for both institutional and retail investors to gain exposure to cryptocurrencies.  
  • The Chelan County Public Utility District, a county utility in the state of Washington, is proposing a new electricity pricing structure that would effectively increase the cost of electricity for cryptocurrency miners, according to Central Washington radio station KPQ. Citing Lindsey Mohns, the Customer Utilities Rate Adviser with Chelan County, the article reads, “What this new rate structure (Schedule 36) does is brings into a market consideration on the energy price because we will have to purchase power on the market to serve the variable load associated with cryptocurrency.” In the articles, KQP goes on to state that many members of the cryptocurrency community in Chelan County, Washington have expressed their displeasure for the new price structure.
     

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
Noah Holdings Limited NOAH 11/19/2018 Earnings Release Date China All-Cap: C
Spectrum Brands Holdings, Inc. SPB 11/19/2018 Earnings Release Date US Large-Cap: C, US Consumer Staples: F
Agilent Technologies, Inc. A 11/19/2018 Earnings Release Date US Large-Cap: C
Intuit Inc. INTU 11/19/2018 Earnings Release Date US Large-Cap: B, US Information Technology: C
Beacon Roofing Supply, Inc. BECN 11/19/2018 Earnings Release Date US Large-Cap: C, US Industrials: B
Nuance Communications, Inc. NUAN 11/19/2018 Earnings Release Date US Large-Cap: D, US Information Technology: D
Pure Storage, Inc. PSTG 11/19/2018 Earnings Release Date US Large-Cap: F, US Information Technology: C
L Brands, Inc. LB 11/19/2018 Earnings Release Date US Large-Cap: D, US Consumer Discretionary: D
Jack in the Box Inc. JACK 11/19/2018 Earnings Release Date US Large-Cap: D, US Consumer Discretionary: C
Lifestyle International Holdings Limited SEHK:1212 11/19/2018 Estimated Earnings Release Date China All-Cap: A
Yuexiu Property Company Limited SEHK:123 11/19/2018 Estimated Earnings Release Date China All-Cap: C
China Lilang Limited SEHK:1234 11/19/2018 Estimated Earnings Release Date China All-Cap: B
China Cinda Asset Management Co., Ltd. SEHK:1359 11/19/2018 Estimated Earnings Release Date China All-Cap: D
Sunny Optical Technology (Group) Company Limited SEHK:2382 11/19/2018 Estimated Earnings Release Date China All-Cap: D
China Everbright International Limited SEHK:257 11/19/2018 Estimated Earnings Release Date China All-Cap: C
SmarTone Telecommunications Holdings Limited SEHK:315 11/19/2018 Estimated Earnings Release Date China All-Cap: A
Honma Golf Limited SEHK:6858 11/19/2018 Estimated Earnings Release Date China All-Cap: C
Autodesk, Inc. ADSK 11/19/2018 Estimated Earnings Release Date US Large-Cap: D, US Information Technology: C
Best Buy Co., Inc. BBY 11/19/2018 Estimated Earnings Release Date US Large-Cap: B, US Consumer Discretionary: C
Hormel Foods Corporation HRL 11/19/2018 Estimated Earnings Release Date US Large-Cap: C, US Consumer Staples: B
Lowe's Companies, Inc. LOW 11/19/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: B
Target Corporation TGT 11/19/2018 Estimated Earnings Release Date US Large-Cap: A, US Consumer Discretionary: A
MMG Limited SEHK:1208 11/19/2018 Estimated Earnings Release Date China All-Cap: D
3SBio Inc. SEHK:1530 11/19/2018 Estimated Earnings Release Date China All-Cap: C
Yadea Group Holdings Ltd. SEHK:1585 11/19/2018 Estimated Earnings Release Date China All-Cap: B
Haitian International Holdings Limited SEHK:1882 11/19/2018 Estimated Earnings Release Date China All-Cap: C
WuXi Biologics (Cayman) Inc. SEHK:2269 11/19/2018 Estimated Earnings Release Date China All-Cap: C
BJ's Wholesale Club Holdings, Inc. BJ 11/19/2018 Earnings Release Date US Large-Cap: F, US Consumer Staples: D
Aurora Mobile Limited JG 11/19/2018 Earnings Release Date China All-Cap: F
Pinduoduo Inc. PDD 11/19/2018 Earnings Release Date China All-Cap: F
PPDAI Group Inc. PPDF 11/19/2018 Earnings Release Date China All-Cap: D
Uxin Limited UXIN 11/19/2018 Earnings Release Date China All-Cap: F

Source: S&P Capital IQ