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Morning Brief

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Stocks retracing yesterday’s gains US-China trade tensions are back in focus

Nov 29, 2018

Market data as of

 

US Stocks

  • Global stocks are mixed to start the day with European stocks off their early morning highs and US index futures dropping in pre-market trading as worries about US-China trade tensions appear to be outweighing dovish comments from the US Fed Chairman
  • US Index futures are dropping and point to a retracement in US stocks today following yesterday’s jump with front-month Dow Jones minis –0.28%, S&P500 minis –0.37%, and Nasdaq 100 minis –0.66% 
  • US Fed Chairman Jerome Powell, during a speech to the Economic Club of NY, suggests the Fed’s policy rate is now “just below” the bottom range of estimates of “neutral” which is typically defined as 2.50% to 3.50% 
  • SPDR SPY ETF experienced a net inflow of USD$4.03 billion yesterday, an increase in total assets of 1.5%
  • Morgan Stanley suggests US stocks will be driven by earnings revisions in CY2019 with NTM P/E for the S&P500 now in-line with its average (simple average) over the past decade 
  • Energy stocks now make up only 5% of the S&P500 which may help soften the impact of the recent decline in global oil prices.  In comparison, during the sharp drop in global oil prices from CY2014 to CY2016, energy stocks made up slightly more than 10% of the S&P500.
  • The VIX is moving down this morning and is currently at 19.18 after closing at 18.49 yesterday
  • SPY December 21 OTM Calls & Puts and EEM December 07 & December 21 OTM Calls & Puts are some of the most actively traded options contracts in the US pre-market
  • US 10-Year Treasury Bonds are higher with yields down -4.38 basis points to 3.0152%
  • The US Treasury 2s-10s Spread has narrowed 2.16 basis points to 0.23%
  • WTI Crude is currently up 1.7% to USD$51.20/bbl with the Brent-WTI spread up USD$0.83 to USD$8.40/bbl
  • Gold is currently up 0.35% to USD$1225.48/oz
  • Front-month WTI futures briefly broke below USD$50/barrel yesterday as traders speculate that OPEC will not decisively cut current production levels to address concerns about growing global inventories
     

Stocks Trending in the News

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

  • Amazon.com Inc. (AMZN) is under fire as the global tech giant, who is the largest retailer and online host for small businesses in Germany, is the target of an antitrust probe by the German Federal Cartel Office. The probe specifically focuses on the terms set by Amazon for other sellers as German regulators have reportedly received “numerous” complaints from sellers. Notably, Germany is Amazon’s second largest market outside of the US. 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.
  • Constellation Brands (STZ) was downgraded by Macquarie to neutral from outperform.  While Constellation Brands is seeing growth in Modelo and Corona brands, this is presently priced into the stock and hence the reason for the downgrade.  Constellation Brands is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Staples Global Top Stock Ideas.
  • Deutsche Bank (DBK GR) has its offices raided by 170 police officers today in Frankfurt.  Deutsche Bank was raided in relation to a money laundering investigation focused on 2 suspected employees.  The names of the employees were not released but their ages, 46 and 50, were published.  Analysts fear this development could paralyze Deutsche Bank for moths as it deals with the investigation.  Deutsche Bank is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Dick’s Sporting Goods (DKS) was downgraded at JP Morgan to neutral from outperform today.   Dick’s Sporting Goods saw its price target cut to USD$41 from USD$46.   Dick’s Sporting Goods was cut after delivering 3Q results below expectations, with revenue of USD$1.86 billion versus USD$1.88 billion expected.  Dick’s Sporting Goods is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Groupe Renault (ENXTPA: RNO), Nissan Motor Co. (TSE: 7201), and Mitsubishi Motors Corp. (TSE: 7211) quelled investor concerns after announcing their intention to maintain their 2-decade partnership after the arrest of the alliance’s Chairman Carlos Ghosn. “Unanimously and with conviction, the boards of Groupe Renault, Nissan Motor Co., and Mitsubishi Motors Corp. Have reaffirmed over the past days their deep commitment to the alliance,” said the companies in a joint statement. Renault is rated “Neutral” in our European Large-Cap Global Top Stock Ideas. Nissan is rated “Top Buy” in our Japan Large-Cap Global Top Stock Ideas. Mitsubishi is rated “Unattractive” in our Japan Large-Cap Global Top Stock Ideas.
  • Micron Technology’s (MU) price target was cut by Citi Bank after CEO Sanjay Mehrotra said the company expects FY1Q2018 earnings to be “somewhat above” midpoint estimates, although revenue is expected to be at the low end of guidance. As a result of Mehrotra’s comments, Citi Bank cut Micron’s price target to USD$40/share while analysts across Wall Street highlighted the global downturn in global memory chip demand. Micron is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Nintendo (TSE: 7974) shares jumped today after reporting strong financials from Thanksgiving to Cyber Monday, driven by the company’s staple console the Nintendo Switch. Total sales for Nintendo during the period were USD$250mm, driven by a 115% y/y increase in Nintendo Switch sales. US hardware sales, meanwhile, increased 45% y/y. Nintendo is not rated in our Global Top Stock Ideas. 
  • Qualcomm (QCOM) CEO Steve Mollenkopf said in an interview with CNBC that the company “Is on the doorstep of finding a resolution“ with Apple (AAPL) on ongoing issues.  He did not get specifics in his comments; the 2 companies are set to face off in court in the coming months.  He said Qualcomm “would love to work with Apple”, Qualcomm was the main supplier of chips for Apple’s phones.  Qualcomm is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.  Apple is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Industrials Global Top Stock Ideas.
  • Sixt (SIX2 GR) has denied reports it is in talks to acquire Hertz (HTZ).  There has been speculation that Sixt was in advanced talks to acquire its smaller rival Hertz but Sixt put out a release denying any talks.  Sixt, based in Germany, has been expanding its reach in the US but is not planning an acquisition at this time.   Sixt is rated “Attractive” in our European SMID-Cap Global Top Stock Ideas.  Hertz is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Industrials Global Top Stock Ideas.
  • Takeda Pharmaceuticals Company Limited (TSE: 4502) shares are trading higher after Chief Financial Officer Costa Saroukos said in an interview that the drug maker will sell as much as USD$10bn in assets after acquiring Shire Plc (LSE: SHP). The asset sales will be used to reduce interest-bearing debt, Saroukos said in the interview with Nikkei. Takeda is rated “Neutral” in our Japan Large-Cap Global Top Stock Ideas. Shire is rated “Top Buy” in our European Large-Cap Global Top Stock Ideas and “Top Buy” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Tech Data (TECD) forecast full year guidance above present consensus.  Tech Data sees full year EPS of USD$3.90-4.20.  Tech Data expects full year net sales of USD$10.5-10.9 billion.  The forecast came with 3Q results that came well above expected, with 3Q EPS of USD$3.02 coming well above USD$2.17 expected.  Tech Data is rated “Neutral” in both our US Large-Cap and US Information Technology Global Top Stock Ideas. 
  • Yeti (YETI) reported 3Q adjusted EPS of 24 cents, above consensus of 22 cents.  Yeti’s 3Q adjusted ebitda came at USD$38.4mn.  Yeti sees full year EPS coming at 79-82 cents per shares, above consensus of 78 cents.  Yeti expects full year sales to grow 19-20% with adjusted ebitda of USD$141-144mn.  Yeti is not rated in our Global Top Stock Ideas.
     

 

 

European Stocks

  • European stocks are advancing this morning, off early morning highs 
  • The Euro Stoxx 600 is currently down -0.01%, the FTSE 100 is higher by +0.29%, the DAX has advanced +0.01%, and the CAC 40 has risen +0.32%
  • French stocks are outpacing their European peers today, a reversal of trends this month with the CAC40 underperforming the Euro Stoxx 50 by more than 1% and underperforming the German DAX by about 0.50% in November 
  • Jefferies downgrades French stocks to “modestly bullish” on expectations for tepid analyst revisions
  • Investor sentiment for European stocks is positive with the advance/decline ratio for the Euro Stoxx 600 currently at 1.53x
  • Retail (-0.47%), Technology (+0.84%), and Basic Resources (+0.68%) stocks are the top performers in the Euro Stoxx 600 today
  • Food & Beverage (+0.22%), Automobiles & Parts (-0.22%), and Utilities (-0.7%) stocks are the worst performers in the Euro Stoxx 600 today
  • 61 stocks in the Euro Stoxx 600 are at 4-week highs while 61 stocks are at 4-week lows
  • 13 stocks in the Euro Stoxx 600 are overbought while 35 stocks are oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, is moving up this morning and is currently at 18.69 after closing at 18.59 yesterday
  • EUR€ is currently little changed against the USD$ at 1.1366
  • GBP£ is currently down -0.444% against the USD$ to 1.2768
  • CHF is currently down -0.169% against the USD$ to 1.0046
  • German 10-Year Bunds are higher with yields down -1.8 basis points to 0.331%
  • UK 10-Year GILTs are higher with yields down -3.3 basis points to 1.344%

Asian Stocks

  • Asia stocks finished mixed in overnight trading, regional stock markets closing well off intra-session highs 
  • The Nikkei 225 finished up +0.39%, the Hang Seng ended down -0.87%, the Hang Seng China Enterprise declined -0.47%, and the CSI 300 was -1.3%
  • Dovish comments from US Fed Chairman Powell helped put a bid into Japanese stocks, causing both the Nikkei 225 and Topix to rally for 5 straight days 
  • MSCI Asia is now hitting its 50-day moving average with the short-term technical indicator now serving as a potential ceiling to Asian stocks valuations
  • Investor sentiment for Japanese stocks finished positive with the advance/decline ratio for the Nikkei 225 closing at 1.53x
  • 37 stocks in the Nikkei 225 hit 4-week highs while 6 stocks reached 4-week lows
  • 7 stocks in the Nikkei 225 closed overbought while 9 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 0.39x
  • 13 stocks in the Hang Seng hit 4-week highs while 1 stocks reached 4-week lows
  • 1 stock 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 -0.9 basis points to -0.141%
  • Japan 10-Year Government Bonds are higher with yields down -1.8 basis points to 0.082%
  • JGBs 2s-10s Spread has narrowed 0.9 basis points to 0.22%
  • JPY¥ is currently down -0.246% against the USD$ to 113.4

 

*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 1755 5.57 15 7 -0.09% 2.18%
General Motors Co 622 6.14 21 16 5.54% 0.16%
Microsoft Corp 533 6.14 31 30 -0.02% 4.79%
Morgan Stanley 526 6.43 1 3 -0.02% 3.62%
Goldman Sachs Group Inc/The 480 5.43 -1 18 -0.14% 3.0%

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
Costco Wholesale Corp 77 8.57 6 9 0.05% 3.15%
Walt Disney Co/The 202 8.43 -14 -13 0.72% -2.27%
Occidental Petroleum Corp 17 8 10 16 -8.37% -2.58%
International Business Machines Corp 395 7.71 -1 -1 0.0% 0.6%
Colgate-Palmolive Co 28 7.57 -15 -19 -0.42% -4.8%

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 16.44 83.33% 16.21 85.71% 0.99 19.05% -2.53 25.0% -1.48 32.94%
QQQ 22.33 82.94% 21.37 88.1% 0.96 24.8% -6.68 17.86% -5.51 17.86%
IWM 20.2 87.7% 18.82 88.1% 0.93 9.92% -1.44 21.63% -1.41 21.83%
FEZ 17.37 79.56% 16.27 73.21% 0.94 19.64% -0.32 41.67% -0.5 36.9%
EEM 25.02 93.25% 22.26 88.49% 0.89 4.76% -0.89 42.46% -1.74 26.19%

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
ADOBE SYSTEMS INC ADBE Information Technology Software 7.05% 12.59% 33.82%
HUMANA INC HUM Health Care Health Care Providers & Services 6.04% 6.82% 27.28%
TJX COMPANIES INC TJX Consumer Discretionary Specialty Retail 4.93% 2.18% 23.76%
MASTERCARD INC MA Information Technology IT Services 4.71% 7.82% 29.18%
GLOBAL PAYMENTS INC GPN Information Technology IT Services 4.62% 7.4% 10.95%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
CME GROUP INC CME Financials Capital Markets -3.69% -2.66% 26.86%
TYSON FOODS INC  -CL A TSN Consumer Staples Food Products -2.34% -3.16% -33.36%
VERIZON COMMUNICATIONS INC VZ Telecommunication Services Diversified Telecommunication Services -0.98% 1.0% 16.14%
PPL CORP PPL Utilities Electric Utilities -0.84% -1.86% 5.26%
AMERICAN ELECTRIC POWER CO AEP Utilities Electric Utilities -0.47% -2.08% 8.8%

Source: S&P Capital IQ, StockDio

Top Short Winners and Losers

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Winners Ticker Sector Industry 1D Return 5D Return YTD
PATTERSON COMPANIES INC PDCO Health Care Health Care Providers & Services -5.9% -0.85% -38.83%
SUPERIOR ENERGY SERVICES INC SPN Energy Energy Equipment & Services -3.98% -7.05% -49.54%
FOSSIL GROUP INC FOSL Consumer Discretionary Textiles, Apparel & Luxury Goods -2.01% -0.48% 77.04%
LAREDO PETROLEUM INC LPI Energy Oil, Gas & Consumable Fuels -1.48% -5.37% -85.55%
GREENSKY INC GSKY Information Technology IT Services -1.39% 3.62% -98.07%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
ACADIA PHARMACEUTICALS INC ACAD Health Care Biotechnology 18.87% 11.83% -39.35%
EXACT SCIENCES CORP EXAS Health Care Biotechnology 9.05% 16.54% 38.84%
ALLAKOS INC ALLK Health Care Biotechnology 7.82% 8.67% 63.6%
HERON THERAPEUTICS INC HRTX Health Care Biotechnology 7.22% 19.91% 42.9%
EDITAS MEDICINE INC EDIT Health Care Biotechnology 6.87% 13.89% -15.58%

Source: S&P Capital IQ, StockDio

Cryptos

  • Cryptocurrency markets are continuing to post gains after consistent losses over the last two weeks as the price of Bitcoin (BTC) is up 7.06% in the last 24 hours to USD$4,366.21. Total cryptocurrency market capitalization added USD$10bn in the last 24 hours, bringing its total to USD$141.1bn. Among major cryptocurrencies, Tron (TRX) is the top performer, gaining 27.87% in the last 24 hours to trade at USD$0.016235 ahead of its Odyssey 3.2 Protocol update. Bitcoin Cash SV (BSV) lags major coins, falling 3.39% in the last 24 hours to trade at USD$96.81.  
  • A new report published by fintech executive Monica Eaton-Cardone finds that the market value of blockchain in the global retail industry will increase 29-fold in value over the next five years. Eaton-Cardone forecasts an increase in the total value of emerging blockchain applications in the global retail industry from USD$80mm today to more than USD$2.3bn by 2023. Eaton-Cardone's analysis attributes five major blockchain applications in retail to this increase: supply chain management, inventory management, authenticity verification, auto-renewal and subscription services, and customer data and loyalty reward programs. Eaton-Cardone is currently the co-founder and Chief Investment Officer of Global Risk Technologies.  
  • Galaxy Digital, the cryptocurrency investment bank headed by notable cryptocurrency pundit Mike Novogratz, lost USD$136mm in the first three quarters of 2018, according to a report by Bloomberg. Following Galaxy Digital’s 3Q2018 earnings announcement, which detailed that the crypto firm saw realized and unrealized lost totaling USD$41mm in the quarter, Galaxy Digital’s stock fell to record low levels and is now down 55% on the month. In addition to the cryptocurrency bear market, Galaxy attributed its underperformance in 2019 to increased competition for arbitrage opportunities. 

 

Events Calendar

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Company Name Ticker Event Date Event Type Q-Factor Score
Cantel Medical Corp. CMD 11/29/2018 Earnings Release Date US Large-Cap: F
Palo Alto Networks, Inc. PANW 11/29/2018 Earnings Release Date US Large-Cap: C, US Information Technology: C
Ambarella, Inc. AMBA 11/29/2018 Earnings Release Date US Large-Cap: D, US Information Technology: D
Workday, Inc. WDAY 11/29/2018 Earnings Release Date US Large-Cap: D, US Information Technology: C
Splunk Inc. SPLK 11/29/2018 Earnings Release Date US Large-Cap: D, US Information Technology: C
AeroVironment, Inc. AVAV 11/29/2018 Earnings Release Date US Large-Cap: F, US Industrials: F
VMware, Inc. VMW 11/29/2018 Earnings Release Date US Large-Cap: C, US Information Technology: C
Zuora, Inc. ZUO 11/29/2018 Earnings Release Date US Large-Cap: F
PVH Corp. PVH 11/29/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: C
GameStop Corp. GME 11/29/2018 Earnings Release Date US Large-Cap: D, US Consumer Discretionary: D
Shandong Weigao Group Medical Polymer Company Limited SEHK:1066 11/29/2018 Estimated Earnings Release Date China All-Cap: B
Towngas China Company Limited SEHK:1083 11/29/2018 Estimated Earnings Release Date China All-Cap: C
Ping An Healthcare and Technology Company Limited SEHK:1833 11/29/2018 Estimated Earnings Release Date China All-Cap: F
CITIC Telecom International Holdings Limited SEHK:1883 11/29/2018 Estimated Earnings Release Date China All-Cap: A
Champion Real Estate Investment Trust SEHK:2778 11/29/2018 Estimated Earnings Release Date China All-Cap: B
Henderson Land Development Company Limited SEHK:12 11/29/2018 Estimated Earnings Release Date China All-Cap: B
HengTen Networks Group Limited SEHK:136 11/29/2018 Estimated Earnings Release Date China All-Cap: C
ENN Energy Holdings Limited SEHK:2688 11/29/2018 Estimated Earnings Release Date China All-Cap: B
Shougang Fushan Resources Group Limited SEHK:639 11/29/2018 Estimated Earnings Release Date China All-Cap: C
Shangri-La Asia Limited SEHK:69 11/29/2018 Estimated Earnings Release Date China All-Cap: C
Jumei International Holding Limited JMEI 11/29/2018 Estimated Earnings Release Date China All-Cap: D
Lisi Group (Holdings) Limited SEHK:526 11/29/2018 Earnings Release Date China All-Cap: C
Want Want China Holdings Limited SEHK:151 11/29/2018 Earnings Release Date China All-Cap: B
Big Lots, Inc. BIG 11/29/2018 Estimated Earnings Release Date US Large-Cap: D, US Consumer Discretionary: C
Razer Inc. SEHK:1337 11/29/2018 Estimated Earnings Release Date China All-Cap: F
Shuang Yun Holdings Limited SEHK:1706 11/29/2018 Estimated Earnings Release Date China All-Cap: F
Hope Education Group Co., Ltd. SEHK:1765 11/29/2018 Estimated Earnings Release Date China All-Cap: F
Sunac China Holdings Limited SEHK:1918 11/29/2018 Estimated Earnings Release Date China All-Cap: D
51 Credit Card Inc. SEHK:2051 11/29/2018 Estimated Earnings Release Date China All-Cap: D
China Huarong Asset Management Co., Ltd. SEHK:2799 11/29/2018 Estimated Earnings Release Date China All-Cap: F
Vobile Group Limited SEHK:3738 11/29/2018 Estimated Earnings Release Date China All-Cap: D
Beijing Enterprises Holdings Limited SEHK:392 11/29/2018 Estimated Earnings Release Date China All-Cap: B
China Communications Services Corporation Limited SEHK:552 11/29/2018 Estimated Earnings Release Date China All-Cap: B
Pan Asia Environmental Protection Group Limited SEHK:556 11/29/2018 Estimated Earnings Release Date China All-Cap: C
Beijing Capital International Airport Company Limited SEHK:694 11/29/2018 Estimated Earnings Release Date China All-Cap: C
Sinopec Kantons Holdings Limited SEHK:934 11/29/2018 Estimated Earnings Release Date China All-Cap: C
Zai Lab Limited ZLAB 12/5/2018 Estimated Earnings Release Date China All-Cap: D
Kin Shing Holdings Limited SEHK:1630 11/29/2018 Earnings Release Date China All-Cap: F
Zhaobangji Properties Holdings Limited SEHK:1660 11/29/2018 Earnings Release Date China All-Cap: C
Fang Holdings Limited SFUN 11/29/2018 Earnings Release Date China All-Cap: F

Source: S&P Capital IQ