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Morning Brief

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Global stocks dropping as global rout in tech stocks continues

Nov 20, 2018

 

Market data as of 7am EST

 

US Stocks

  • Global stocks are dropping for the second straight day as the global rout in tech stocks appears poised to continue 
  • US stocks index futures are declining sharply, pointing to another day in the red for US stocks with front-month Dow Jones minis –0.70%, S&P500 minis –0.77% and Nasdaq 100 minins –1.13% 
  • Goldman Sachs is arguing investors should increase their allocation to cash while maintaining their current allocation to stocks with a bigger focus on defensive stocks like utilities
  • US Stocks shares of the MSCI World Index has risen close to 62.0%, the highest level since the mid-1990s with US stocks set to take even more market-share as US earnings expected to grow faster than international peers
  • The VIX is higher this morning and is currently at 21.12 after closing at 20.10 yesterday
  • General Electric (GE) December 21 OTM Puts, HYG December 21 OTM Puts, TLT January 2019 OTM Calls, SPY January 2019 OTM Calls and EEM November 23 & December 21 OTM Calls are some of the most actively traded options contracts in the US pre-market
  • US 10-Year Treasury Bonds are higher with yields down -1.28 basis points to 3.05%
  • The US Treasury 2s-5s Spread has narrowed 0.85 basis points to 0.07%
  • The US Treasury 2s-10s Spread has narrowed 1.27 basis points to 0.26%
  • WTI Crude is currently up 0.53% to USD$56.76/bbl with the Brent-WTI spread down USD$-1.36 to USD$9.01/bbl
  • Gold is currently little changed 0.01% to USD$1224.34/oz
  • US State Department officials are hoping an oversupplied US oil market will help compensate for a cut in Iranian production and help keep oil prices relatively subdued
     

Stocks Trending in the News

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

 

  • Apple (AAPL) stock continues to suffer as stories of production cuts from Apple suppliers keep swirling in the market.  Many suppliers are lowering outlooks in the wake of Apple’s cuts.  Apple itself has fallen almost 20% since October 3rd, almost entering bear market territory.  Analysts expect Apple focus on charging higher prices per phone to make up for slower growth expected going forward.  Apple is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • BASF (BAS GR) is targeting a boost to profit of USD$2.3 billion as a goal of its reorganization.  BASF will simplify its structure to 6 units as it seeks to challenge smaller competitors.  BASF is targeting 3-5% growth in ebitda over the coming years as part of its plans.  BASF expects the profit boost from 2021 and beyond.  BASF is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • Best Buy (BBY) shares are slightly lower in pre-market trading despite boosting full-year adjusted EPS forecasts and beating analyst estimates for FY3Q2018. Best Buy generated adjusted EPS of USD$0.93/share in FY3Q2018 while analysts’ consensus called for USD$0.85/share. Best Buy also raised its full-year adjusted EPS guidance from between USD$4.95/share and USD$5.10/share to between USD$5.09/share and USD$5.19/share. Likely driving shares to trade lower is Best Buy’s FY3Q2018 international comparable sales growth of 3.7%, which missed consensus estimates of 3.9%. Best Buy is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Boston Scientific (BSX) agreed to buy its competitor BTG Corp (BTG LN) in an effort to expand its medical devices offerings.  Boston Scientific, the maker of stents for blood vessels, will be adding medical technology products with the acquisition of BTG Corp.  The deal will be financed with cash and debt as Boston Scientific offers a 50% premium over the 90-day average price of BTG.  Boston Scientific is rated “Neutral” in our US Large-Cap Global top Stock Ideas.  BTG Corp is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Campbell Soup (CPB) shares are higher in pre-market trading after reporting FY1Q2018 adjusted EPS that beat the highest analyst estimate. Campbell reported FY1Q2018 adjusted EPS of USD$0.79 while analyst estimates ranged between USD$0.65 and USD$0.76. Campbell also reported FY1Q2018 net sales of USD$2.69bn while analyst estimates ranged between USD$2.52bn and USD$2.76bn. Campbell is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Staples Global Top Stock Ideas.
  • Compass Group PLC (LSE: CPG) shares are trading higher after reporting full-year operating profit in-line with analyst consensus. Compass Group generated adjusted operating profit of 1.74bn pounds while analyst consensus called for 1.74bn pounds. Compass Group also reported FY2018 EPS that beat consensus by 1% while announcing a dividend of 0.377 pounds/share. Compass Group is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Inogen (INGN) was upgraded to strong buy from buy at Needham.  Inogen’s price target of USD$280 was reiterated.  Needham said Inogen can deliver “meaningful upside to consensus” as it enters a new product cycle with its new G5 portable oxygen generator.  Inogen should see accelerating sales in 2019 with easy comps for sales.   Inogen is rated “Attractive” in our US Large-Cap Global top Stock Ideas
  • Intuit (INTU) reported FY2Q guidance for adjusted EPS that beat consensus.  Intuit sees FY2Q adjusted EPS of 85-88 cents while consensus is 79 cents.  Intuit sees FY2Q revenue of USD$1.47-1.49 billion.  Intuit sees full year EPS of USD$6.40-6.50.  Intuit reported FY1Q adjusted EPS of 29 cents, well above consensus of 11 cents.  Intuit is rated “Neutral” in our US Large-Cap Global top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Jacobs Engineering (JEC) shares are flat in pre-market trading after announcing financial results for FY4Q2018. Jacobs Engineering reports FY4Q2018 y/y revenue growth of 56% to USD$4.1bn while analyst consensus called for USD$4.3bn. Jacobs Engineering’s adjusted EPS, however, beat consensus analyst estimates of USD$1.239, reporting FY4Q2018 EPS of USD$1.310. Jacobs Engineering is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Staples Global Top Stock Ideas.
  • L Brands (LB) provided guidance that beat average consensus.  L Brands sees CY4Q EPS of USD$1.90-2.10 while it sees full year EPS of USD$2.60-2.80, up from USD$2.45-2.70.  L Brands sees direct and comparable sales growth of 4%.  L Brands is rated is rated “Neutral” in our US Large-Cap Global top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Lowes Corp (LOW) announced it will be exiting retail operations in Mexico.  Lowes also announced it will be exiting Alacrity Renovation Services and Iris Smart Home.  Lowes sees full year EPS of USD$4.08-4.24 with comparable sales growing ~2.5% and total sales growing 4%.  CY3Q adjusted EPS came at USD$1.04, above 98 cents consensus.  Lowes is rated is rated “Attractive” in our US Large-Cap Global top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Target (TGT) reported 3Q comparable sales growth of 5.1%, missing the 5.2% consensus.  Target 3Q adjusted EPS of USD$1.09 came below USD$1.12 consensus.  Target 3Q sales came at USD$17.82 billion.  Target sees full year adjusted EPS of USD$5.30-5.50.  Target is rated is rated “Top Buy” in our US Large-Cap Global top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Wirecard AG (XTRA: WDI) shares are trading lower after reporting FY2019 guidance. Wirecard sees FY2019 EBITDA of between 740mm euros and 800mm euros while analyst consensus called for 766mm euros.  Wirecard is trading lower primarily due to the global rout in technology stocks. Meanwhile, HSBC analyst Antonin Baudry reiterated a “Buy” recommendation for Wirecard with a price target of 240 euros. Wirecard is rated “Top Buy” in our European Large-Cap Global Top Stock Ideas.

 

European Stocks

  • European  stocks are dropping for a second straight day as the global rout in tech stocks appears set to continue for a second straight day 
  • The Euro Stoxx 600 is currently down -0.47%, the FTSE 100 has declined -0.12%, the DAX has fallen -0.72%, and the CAC 40 is lower by -0.66%
  • The Stoxx Europe 600 is at its lowest level in more than 3 weeks 
  • The ratio of Value to Growth stocks continues to move in a sideways fashion as tech stocks drop with the Italian and BREXIT overhang capping the potential for bank stocks (which overwhelmingly make up MSCI Europe Value).
  • Investor sentiment for European stocks is negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.31x
  • Industrial Goods & Services (-0.71%), Real Estate (-0.62%), and Health Care (+0.37%) stocks are the top performers in the Euro Stoxx 600 today
  • Retail (-0.67%), Telecommunications (-0.65%), and Construction & Materials (-0.61%) stocks are the worst performers in the Euro Stoxx 600 today
  • 36 stocks in the Euro Stoxx 600 are at 4-week highs while 76 stocks are at 4-week lows
  • 12 stocks in the Euro Stoxx 600 are overbought while 62 stocks are oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, is higher this morning and is currently at 18.83 after closing at 18.03 yesterday
  • EUR€ is currently down -0.175% against the USD$ to 1.1434
  • GBP£ is currently little changed against the USD$ at 1.2854
  • CHF is currently little changed against the USD$ at 1.0075
  • German 10-Year Bunds are higher with yields down -1.2 basis points to 0.361%
  • UK 10-Year GILTs are lower with yields up 1.4 basis points to 1.39

Asian Stocks

  • Asia stocks dropped in overnight trading with the rout in US tech stocks yesterday stretching over to Asian stock markets 
  • The Nikkei 225 finished down --1.09%, the Hang Seng ended down -2.02%, the Hang Seng China Enterprise declined -1.56%, and the CSI 300 was -2.31%
  • Volume traded remains weak in Hong Kong and Tokyo with total turnover on the Hong Kong Stock exchange 22.0% below its 20-day average and total turnover on the Tokyo Stock Exchange 10.0% below its 20-day average 
  • Investor sentiment for Japanese stocks finished negative with the advance/decline ratio for the Nikkei 225 closing at 0.77x
  • 19 stocks in the Nikkei 225 hit 4-week highs while 37 stocks reached 4-week lows
  • 4 stocks in the Nikkei 225 closed overbought while 15 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 0.02x
  • 18 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 lower with yields up 0.5 basis points to 0.102%
  • JGBs 2s-10s Spread has widened 0.1 basis points to 0.24%
  • JPY¥ is currently little changed against the USD$ at 112.49
     

 

*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 1602 6.57 12 7 0.0% 1.96%
Microsoft Corp 877 6 30 30 4.67% 4.81%
Walmart Inc 846 4.71 13 -2 1.03% -2.59%
Goldman Sachs Group Inc/The 836 4.57 12 18 -0.2% 2.94%
Morgan Stanley 680 6.86 3 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 65 9.43 15 15 4.87% 4.01%
BlackRock Inc 384 8.86 4 5 -0.05% -3.62%
Medtronic PLC 180 8.43 -1 2 -0.06% 1.92%
Emerson Electric Co 44 8.29 -11 -12 3.52% 3.17%
Exelon Corp 11 8.14 10 12 4.03% 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 17.76 92.86% 17.89 96.43% 1.01 21.23% -3.23 20.24% 1.57 46.03%
QQQ 25.88 96.03% 23.9 98.81% 0.92 15.48% -8.04 13.49% -1.52 30.95%
IWM 21.4 94.05% 19.9 94.84% 0.93 9.13% -3.29 15.87% 1.24 36.9%
FEZ 18.65 88.1% 17.31 88.89% 0.93 15.28% 0.99 55.75% 1.2 63.89%
EEM 27.11 99.21% 22.5 94.25% 0.83 0.4% -0.85 42.46% -1.11 33.33%

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
PPL CORP PPL Utilities Electric Utilities 1.96% -0.32% 7.12%
DARDEN RESTAURANTS INC DRI Consumer Discretionary Hotels, Restaurants & Leisure 1.42% 0.95% 19.11%
CMS ENERGY CORP CMS Utilities Multi-Utilities 1.25% 1.88% 12.61%
REPUBLIC SERVICES INC RSG Industrials Commercial Services & Supplies 1.14% 2.42% 15.45%
DUKE ENERGY CORP DUK Utilities Electric Utilities 1.1% 3.06% 9.71%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
BLACK KNIGHT INC BKI Information Technology IT Services -9.03% -6.49% -0.79%
ADOBE SYSTEMS INC ADBE Information Technology Software -8.38% -7.44% 21.21%
FORTINET INC FTNT Information Technology Software -8.03% -8.43% 42.42%
NEXSTAR MEDIA GROUP NXST Consumer Discretionary Media -7.04% -8.39% -2.44%
BLACKBAUD INC BLKB Information Technology Software -5.55% -2.09% -32.14%

Source: S&P Capital IQ, StockDio

Top Short Winners and Losers

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Winners Ticker Sector Industry 1D Return 5D Return YTD
TANDEM DIABETES CARE INC TNDM Health Care Health Care Equipment & Supplies -10.87% -8.52% 247.04%
HERON THERAPEUTICS INC HRTX Health Care Biotechnology -10.53% -13.63% 26.19%
TENABLE HOLDINGS INC TENB Information Technology Software -10.48% -3.43% -9.49%
PENUMBRA INC PEN Health Care Health Care Equipment & Supplies -10.18% -10.97% 31.13%
BLOOM ENERGY CORP-REDH BE Industrials Electrical Equipment -10.09% -30.65% -54.47%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
FOSSIL GROUP INC FOSL Consumer Discretionary Textiles, Apparel & Luxury Goods 3.99% 0.25% 82.36%
ROWAN COMPANIES PLC RDC Energy Energy Equipment & Services 1.74% 0.2% -7.17%
MACERICH CO MAC Real Estate Equity Real Estate Investment Trusts (REITs) 1.29% -2.26% -23.72%
INTERCEPT PHARMA INC ICPT Health Care Biotechnology 1.09% 2.99% 61.12%
MURPHY OIL CORP MUR Energy Oil, Gas & Consumable Fuels 1.05% 3.73% 1.82%

Source: S&P Capital IQ, StockDio

Cryptos

  • Cryptocurrency markets are in a panic that has sent the price of Bitcoin (BTC) down 16.47% in the last 24 hours to USD$4,444.20. Amid harsh sell-offs, USD$77bn has been wiped out from total cryptocurrency market capitalization in the last 7 days sending crypto market capitalization to USD$144.3bn, its lowest total since October 2017. Historically, November has been a strong month for cryptocurrencies -- since first launching in 2010, BTC has generated monthly gains in November 7 times. Additionally, BTC’s relative strength index (RSI) fell to a record low 9.5, deep into oversold territory, although this has not helped to stimulate a price recovery.  
  • After years of uncertainty, the government of India is likely set to reveal draft regulations for the country’s cryptocurrency sector before the end of 2018. According to a report by news outlet Quartz, a counter-affidavit filed by India’s ruling government in a Supreme Court case involving the country’s domestic cryptocurrency exchange industry challenging a banking ban by the central bank indicates that the country will reveal draft regulation by 2018’s end. An excerpt from the counter-affidavit states, “Serious efforts are going on for preparation of the draft report and the draft bill on virtual currencies, use of distributed ledger technology if the financial system, and framework for digital currency in India.” 
  • OKEx, currently the world’s second largest cryptocurrency exchange by trading volume, is responding to accusations that it “manipulated markets” by modifying Bitcoin Cash (BCH) futures settlements. After deciding to deliver early BCH futures trading ahead of the coin’s controversial hard fork, OKEx received a flurry of negative publicity with individuals complaining that OKEx had overstepped its bounds in deciding when and how futures contracts would be settled.  OKEx responded to the criticism in a post sent to users, specifically addressing a Medium post by Amber Al, saying,  “In the absence of evidence, Amber Al alleged us for trading against our own customers and manipulating markets,” and adding, “These are completely false allegations and the defamatory statements have caused serious damages to OKEx’s reputation.” 
  • The Monetary Authority of Singapore (MAS) is expanding its regulatory framework to include payment providers in order to bring certain cryptocurrencies under its jurisdiction, as per a report by local news outlet The Straits Times. Members of the central bank’s board submitted the new Payment Services Bill (PSB) to parliament and it is set to replace two pre-existing pieces of legislation -- the Payment Systems (Oversight) Act and the Money-Changing and Remittance Business Act. The new bill will allow tokens like Bitcoin (BTC) and Ethereum (ETH) to fall under the central bank’s jurisdiction. 
     

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
Bilibili Inc. BILI 11/20/2018 Earnings Release Date China All-Cap: F
21Vianet Group, Inc. VNET 11/20/2018 Earnings Release Date China All-Cap: D
Fanhua Inc. FANH 11/20/2018 Earnings Release Date China All-Cap: C
Analog Devices, Inc. ADI 11/20/2018 Earnings Release Date US Large-Cap: B, US Information Technology: A
Ross Stores, Inc. ROST 11/20/2018 Earnings Release Date US Large-Cap: A, US Consumer Discretionary: A
Hormel Foods Corporation HRL 11/20/2018 Earnings Release Date US Large-Cap: C, US Consumer Staples: B
Dycom Industries, Inc. DY 11/20/2018 Earnings Release Date US Large-Cap: D, US Industrials: D
The TJX Companies, Inc. TJX 11/20/2018 Earnings Release Date US Large-Cap: A, US Consumer Discretionary: A
Jacobs Engineering Group Inc. JEC 11/20/2018 Earnings Release Date US Large-Cap: C, US Industrials: C
Kohl's Corporation KSS 11/20/2018 Earnings Release Date US Large-Cap: A, US Consumer Discretionary: A
Campbell Soup Company CPB 11/20/2018 Earnings Release Date US Large-Cap: C, US Consumer Staples: C
Esterline Technologies Corporation ESL 11/20/2018 Earnings Release Date US Large-Cap: C, US Industrials: D
The Gap, Inc. GPS 11/20/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: C
Keysight Technologies, Inc. KEYS 11/20/2018 Earnings Release Date US Large-Cap: B, US Information Technology: A
Foot Locker, Inc. FL 11/20/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: C
Copart, Inc. CPRT 11/20/2018 Earnings Release Date US Large-Cap: B, US Industrials: C
Madrigal Pharmaceuticals, Inc. MDGL 11/20/2018 Estimated Earnings Release Date US Large-Cap: F
Hysan Development Company Limited SEHK:14 11/20/2018 Estimated Earnings Release Date China All-Cap: B
Hong Kong Aircraft Engineering Company Limited SEHK:44 11/20/2018 Estimated Earnings Release Date China All-Cap: B
PCCW Limited SEHK:8 11/20/2018 Estimated Earnings Release Date China All-Cap: C
Ausnutria Dairy Corporation Ltd SEHK:1717 11/20/2018 Estimated Earnings Release Date China All-Cap: B
Wheelock and Company Limited SEHK:20 11/20/2018 Estimated Earnings Release Date China All-Cap: C
Value Partners Group Limited SEHK:806 11/20/2018 Estimated Earnings Release Date China All-Cap: C
Jupai Holdings Limited JP 11/20/2018 Estimated Earnings Release Date China All-Cap: D
Hewlett Packard Enterprise Company HPE 11/20/2018 Estimated Earnings Release Date US Large-Cap: D, US Information Technology: B
The Children's Place, Inc. PLCE 11/20/2018 Estimated Earnings Release Date US Large-Cap: C, US Consumer Discretionary: C
Hengan International Group Company Limited SEHK:1044 11/20/2018 Estimated Earnings Release Date China All-Cap: B
Meitu, Inc. SEHK:1357 11/20/2018 Estimated Earnings Release Date China All-Cap: F
Consun Pharmaceutical Group Limited SEHK:1681 11/20/2018 Estimated Earnings Release Date China All-Cap: C
Country Garden Holdings Company Limited SEHK:2007 11/20/2018 Estimated Earnings Release Date China All-Cap: C
The Hong Kong and China Gas Company Limited SEHK:3 11/20/2018 Estimated Earnings Release Date China All-Cap: A
Minth Group Limited SEHK:425 11/20/2018 Estimated Earnings Release Date China All-Cap: C
Wisdom Education International Holdings Company Limited SEHK:6068 11/20/2018 Estimated Earnings Release Date China All-Cap: D
Kerry Properties Limited SEHK:683 11/20/2018 Estimated Earnings Release Date China All-Cap: D
Tongda Group Holdings Limited SEHK:698 11/20/2018 Estimated Earnings Release Date China All-Cap: D
Skyworth Digital Holdings Limited SEHK:751 11/20/2018 Estimated Earnings Release Date China All-Cap: D
Longfor Group Holdings Limited SEHK:960 11/20/2018 Estimated Earnings Release Date China All-Cap: C
Baozun Inc. BZUN 11/20/2018 Earnings Release Date China All-Cap: C
Cheetah Mobile Inc. CMCM 11/20/2018 Earnings Release Date China All-Cap: C
Qudian Inc. QD 11/20/2018 Earnings Release Date China All-Cap: D

Source: S&P Capital IQ