Stocks rebounding to start week on the back of a stronger than expected Black Friday
Nov 26, 2018
Market data as of
- Global stocks are jumping this morning with improving investor sentiment following positive macro news out of Europe and Asia and a stronger than expected start to the holiday shopping season in the US
- US stocks index futures are advancing to start the final week of November and are pointing to a sharp bounce back in US markets following the sell-off last week with front-month Dow Jones minis +0.99%, S&P500 minis +1.11% and Nasdaq 100 minis +1.54%
- Emerging markets stocks ETFs stay positive net inflows of USD$1.24 billion last week
- The VIX is moving down this morning and is currently at 20.49 after closing at 21.52 last week
- Bank of America (BAC) November 30 OTM Calls, USO December 7 OTM Puts & January 2019 OTM Puts, FXI December 7 OTM Calls and EEM January 2019 OTM Calls are some of the most actively traded options contracts in the US pre-market
- US 10-Year Treasury Bonds are lower with yields up 2 basis points to 3.059%
- The US Treasury 2s-10s Spread has widened 0.13 basis points to 0.23%
- WTI Crude is currently up 1.43% to USD$51.15/bbl with the Brent-WTI spread up USD$0.28to USD$8.97/bbl
- Gold is currently little changed 0.21% to USD$1225.65/oz
- Saudi Arabian oil production has allegedly broken above 11.2 million barrels a day, the highest daily production ever for The Kingdom
Stocks Trending in the News
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- Eurofins (ERF FP) has confirmed its guidance and that is has lowered its financing costs. Eurofins made the announcement after Morgan Stanley called into question its growth prospects in a recent note to clients. Eurofins confirmed its expectation for 5% organic growth, saying its “achievable”. Eurofins said a number of facts in the Morgan Stanley note are “false”. Eurofins is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas.
- Facebook’s (FB) COO Sheryl Sandberg has seen her star dimmed considerably after Facebook’s recent woes, according to a report in Bloomberg today. The article discusses how she was viewed as “larger than life” previously by many people at the company in the past but today she is blamed by many there for its problems. The comments from colleagues are that she often was more worried about her own brand that she was about Facebook’s problems. Facebook is rated “Neutral” in our US Large-Cap Global Top Picks and “Attractive” in our US Information Technology Global Top Stock Ideas.
- GameStop (GME) was upgraded by Bank of America Merrill Lynch to neutral from underperform. Bank of America Merrill Lynch increased its GameStop to USD$16 from USD$9. Bank of America Merrill Lynch highlights that the sale of its Spring Mobile unit provides a USD$700mn cash infusion that is key for the company. Short interest in GameStop is 25% of its float presently. GameStop is rated "Unattractive" in both our US Large-Cap and US Consumer Discretionary Global Top Stock Ideas.
- General Motors (GM) will be closing a manufacturing facility in Oshawa, Canada, just outside Toronto. The union confirmed there is no car production assigned to the factory past next year. The Oshawa facility employs 2,200 people and is one of the largest in Canada. The factory has been there since 1953. General Motors is rated “Unattractive” in our US Large-Cap Global Top Sock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
- Kering (KER) announced it will bring all of its digital activities in-house. Kering has had a JV with e-commerce firm YNAP for the last 7 years but will transition to all digital activities being handled in-house. Kering is working on a suite of apps with Apple (AAPL) that will be used in stores. Kering expects the transition to be complete in the first half of 2020. Kering is rated “Neutral” in our European Large-Cap Global Top Stock Ideas. Apple is rated “Attractive” in both our US Large-Cap and US Information Technology Global Top Stock Ideas.
- Logitech International (SWX:LOGN) reiterates it is not in any acquisition talks to purchase US-based Plantronics (NYSE:PLT). Reuters reported that Logitech had offered USD$2.2 billion for Plantronics, a 10% premium above last Wednesday's close. Plantronics traded up as much as 11% during Friday’s shortened trading session before closing +3.74%. Logitech International is rated “Neutral” in our European Large-Cap Global Top Stock Ideas. Plantronics is rated “Attractive” in our US SMID-Cap Global Top Stock Ideas and “Neutral” in our US Tech Global Top Stock Ideas.
- Novavax (NVAX) was upgraded at Piper Jaffray today to overweight from neutral. Piper Jaffray expects progress on its ResVax phase 3 trial in 1Q2019 according to its note. If successful that would mean further trials in the US and EU in 2020, positive according to Piper Jaffray. Novavax is rated “Top Short” in our US SMID-Cap Global Top Stock Ideas.
- RBC Capital Markets reiterates that they expect the cryptocurrency overhang to impact both NVIDIA Corp (NVDA) and Advanced Micro Devices (AMD) for another quarter. According to research by RBC, the break-even price for Ethereum miners is USD$175 for Ether; currently, Ether is hovering around USD$114, almost 90% off its February 2018 peak. RBC suggests that the long-term growth outlook for both NVIDIA and AMD remain positive. NVIDIA is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Tech Global Top Stock Ideas. AMD is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Tech Global Top Stock Ideas.
- NavInfo, a mapmaker backed by Tencent (SEHK: 700, ADR: TCEHY) has announced it is building a high-definition map of Singapore for autonomous car. Tencent’s NavInfo move into Singapore would be the first overseas market for the Tencent-backed company. According to South China Morning Post, NavInfo has already mapped north of 210k kilometers of highway in China -- 5 times the circumference of Earth! Tencent is rated ”Attractive” in our China All-Cap Global Top Stock Ideas.
- European stocks are advancing this morning, on pace for the biggest gain this month following news that the EU has agreed to a negotiated BREXIT deal and the Italian coalition government suggests it is willing to negotiate with the EU over its CY2019 budget deficit target
- The Euro Stoxx 600 is currently up +1.03%, the FTSE 100 is higher by +0.87%, the DAX has advanced +1.2%, and the CAC 40 has risen +1%
- The Italian coalition government is signaling that its CY2019 budget deficit is flexible and it is willing to negotiate with EU officials
- Credit default swaps for European investment grade and high-yield bonds are dropping off 2-year highs hit last week
- Investor sentiment for European stocks is positive with the advance/decline ratio for the Euro Stoxx 600 currently at 4.41x
- Banks (+2.54%), Automobiles & Parts (+2.14%), and Insurance (+1.94%) stocks are the top performers in the Euro Stoxx 600 today
- Personal & Household Goods (-0.07%), Food & Beverage (-0.05%), and Health Care (+0.14%) stocks are the worst performers in the Euro Stoxx 600 today
- European energy stocks are rallying alongside the positive move in Brent crude oil prices
- 12 stocks in the Euro Stoxx 600 are at 4-week highs while 97 stocks are at 4-week lows
- 7 stocks in the Euro Stoxx 600 are overbought while 64 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 18.55 after closing at 18.97 yesterday
- EUR€ is currently up +0.247% against the USD$ to 1.1366
- GBP£ is currently up +0.297% against the USD$ to 1.2852
- CHF is currently little changed against the USD$ at 1.0033
- German 10-Year Bunds are lower with yields up 2 basis points to 0.36%%
- UK 10-Year GILTs are lower with yields up 2.2 basis points to 1.403%
- Asia stocks start the week positive and are on pace to finished November positive, the first monthly gain in Asia stocks since July 2018
- The Nikkei 225 finished up +0.76%, the Hang Seng ended up +1.73%, the Hang Seng China Enterprise up +1.28%, and the CSI 300 was -0.07%
- Asian stocks, as measured by the MSCI Asia Pacific is now trading a record discount to the S&P500 – currently below lows seen in CY2015 and CY2016
- MSCI China Tech has declined 33% since hitting its peak in mid-January 2018, suggesting there may be “value” opportunities in select Chinese tech growth stocks
- Investor sentiment for Japanese stocks finished positive with the advance/decline ratio for the Nikkei 225 closing at 1.56x
- 20 stocks in the Nikkei 225 hit 4-week highs while 21 stocks reached 4-week lows
- 6 stocks in the Nikkei 225 closed overbought while 21 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 15.67x
- 4 stocks in the Hang Seng hit 4-week highs while 2 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 -0.1 basis points to -0.14%
- Japan 10-Year Government Bonds are higher with yields down -1 basis points to 0.09%
- JGBs 2s-10s Spread has narrowed 0.9 basis points to 0.23%
- JPY¥ is currently up +0.195% against the USD$ to 113.18
*Data in Price Return and Updated Real-Time (with a delay), Source: StockDio