morning-quant-ride

Morning Brief

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

Global stocks decline as investor euphoria for US-China talk at G20 fizzles

Dec 04, 2018

 

Market data as of 7am EST

 

US Stocks

  • Global stocks are dropping as conflicting comments by US officials about US-China trade negotiations are causing confusion among investors and traders 
  • US stocks index futures are falling and point to a negative start to trading in the US with front-month Dow Jones minis -0.46%, S&P500 minis –0.36% and Nasdaq 100 minis –0.55%
  • The VIX is little changed this morning and is currently at 16.74 after closing at 16.44 yesterday
  • SPY December 07 & December 28 OTM Calls, EEM December 21 OTM Calls & Puts and EEM January 2019 OTM Calls, and FXI December 07 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 2.9569%
  • The US Treasury 2s-10s Spread has narrowed 1.09 basis points to 0.14%
  • 2s-5s and 3s-5s have inverted for the first time since CY2008 – bond market traders fear an inversion of 2s-10s and whether it will be pointing to an upcoming recession
  • WTI Crude is currently up 1.93% to USD$53.98/bbl with the Brent-WTI spread down USD$ 0.34 to USD$9.02/bbl
  • Gold is currently up 0.7% to USD$1239.32/oz
  • Saudi energy officials are tamping down market expectations for a cut to global oil production by OPEC + Russia this week
  • The price chart for Brent crude oil has just formed a “death cross”, where the 50-day moving average drops below the 200-day moving average – according to technical chartists, this is normally a negative technical trading signal

Stocks Trending in the News

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

  • Apple (AAPL) is transferring marketing staff from other divisions to its iPhone division to help boost sales, according to a report in Bloomberg today.  Apple plans to use more aggressive marketing tactics to drive sales.  The articles report that employees describe it as a “fire drill” as Apple scrambles to deliver sales that seem to be trailing expectations.  Apple is rated “Top Buy” in both our US Large-Cap and US Information Technology Global Top Stock Ideas.
  • AutoZone (AZO) reports FY1Q2019 EPS that beats the highest analyst estimate while surpassing expectations for comparable same-store sales growth. AutoZone generated an EPS of USD$13.47 in FY1Q2018 while analyst expectations ranged between USD$11.97 and USD$12.68. Additionally, AutoZone’s comparable same-store sales growth of 2.7% beat the consensus estimate of 1.7%. AutoZone 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.  
  • BMW (BMW) is in talks to join peers in a collaboration on self-driving technology.  BMW is in talks with at least 2 peers to join them in developing the next generation of the technology.  BMW’s head of development said last week that companies that have gone it alone have struggled and that BMW would likely speak with other automakers.  BMW is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas. 
  • Cirrus Logic Inc. (CRUS) is the most recent Apple Inc. (AAPL) supplier to pullback guidance after the Austin, Texas-based chipmaker reduced FY4Q2018 sales forecast from between USD$360mm and USD$400mm to between USD$300mm and USD$340mm. Prior to the guidance adjustment, analysts expected revenue of USD$367mm in FY4Q2018. In the last fiscal year, Apple accounted for 82% of Cirrus Logic’s sales. Cirrus Logic is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Dollar General (DG) is pulling-back its EPS guidance for the full-year, which misses the average analyst estimate. Dollar General is pulling back full-year EPS forecasts from between USD$5.95/share and USD$6.15/share to between USD$5.85/share and USD$6.05/share while analysts’ consensus call for USD$6.11/share. In reporting FY3Q2018 financials today, Dollar General beat analyst comparable sales growth expectations of 2.4% by reporting comparable sales growth of 2.8%. Dollar General is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Kroger (KR) plans to sell groceries in Walgreens Boots Alliance (WBA) stores according to the Wall Street Journal.  Kroger will set up “Kroger Express” sections in 13 Walgreens stores in 2019 to test the format.  Kroger will not sell items that compete with Walgreens branded products in the sections.  Kroger is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Staples Global Top Stock Ideas.  Walgreens Boots Alliance is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Staples Global Top Stock Ideas.  
  • Microsoft (MSFT) is expanding its broadband access initiative in the US.  Microsoft will now aim to reach 3 million rural residents with its Airband Initiative which is presently in 25 states.  The program expands broadband reach into rural areas and by 2022 Microsoft plans to reach all of the 3 million people it is targeting.  Microsoft is rated “Neutral” in both our US Large-Cap and US Information Technology Global Top Stock Ideas.
  • Tencent (700 HK) started the IPO for its Tencent Music Entertainment Group yesterday.  The launch of the IPO was positive for Spotify (SPOT) which owns 8.9% of the company.  Spotify rose 3.2% yesterday with the launch of the Tencent Music IPO.   Tencent is selling 82 million ADRs with a price range of USD$13-15, looking to raise up to USD$1.23 billion.  Tencent is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.  Spotify is not rated in our Global Top Stock Ideas. 
  • Toll Brothers (TOL) reported 4Q results that beat the highest estimates.  Toll Brothers reported 4Q revenue of USD$2.46 billion while consensus was USD$2.35 billion.  Toll Brothers 4Q gross margin came at 24.1% while delivering 2,710 new homes.  Toll Brothers backlog rose to USD$5.52 billion.  Toll Brothers is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Visa (V) and Mastercard (MA) sent a letter to the EU offering to cut the fees they charge on foreign transactions in an effort to end the EU antitrust probe.  Visa and Mastercard will reduce the interchange fees charged on debit cards to 0.2% from 0.3% and on credit cards to 1.15% from 1.5%.  The EU said it will study the offer as it reviews the industry and have a response within 6 months.  Visa is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.  Mastercard is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.  
     

 

European Stocks

  • European stocks are declining as investor optimism wanes with confusion about the outcome of US-China trade negotiations 
  • The Euro Stoxx 600 is currently down -0.47%, the FTSE 100 has declined -0.68%, the DAX has fallen -0.67%, and the CAC 40 is lower by -0.62%
  • Strategists at Societe Generale are suggesting that European value stocks will outperform their US counterparts after structurally underperforming in CY2018
  • Investor sentiment for European stocks is negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.45x
  • Oil & Gas (-0.13%), Telecommunications (-0.25%), and Basic Resources (-1.02%) stocks are the top performers in the Euro Stoxx 600 today
  • Automobiles & Parts (-1.85%), Food & Beverage (+0.69%), and Utilities (-0.21%) stocks are the worst performers in the Euro Stoxx 600 today
  • Auto stocks and chip stocks are major laggards this morning with both sectors viewed as most sensitive to trade war fears (autos) and China (semiconductors)
  • 112 stocks in the Euro Stoxx 600 are at 4-week highs while 33 stocks are at 4-week lows
  • 13 stocks in the Euro Stoxx 600 are overbought while 15 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 16.93 after closing at 16.92 yesterday
  • EUR€ is currently up +0.37% against the USD$ to 1.1396
  • GBP£ is currently up +0.684% against the USD$ to 1.2812
  • CHF is currently up +0.279% against the USD$ to 1.005
  • German 10-Year Bunds are higher with yields down -1.6 basis points to 0.29%
  • UK 10-Year GILTs are lower with yields up 1.4 basis points to 1.327%

Asian Stocks

  • Asia stocks finished mixed in overnight trading with stocks in the region taking a breather following conflicting reports from US officials about what was agreed to and what wasn’t agreed to during the meeting between US President Donald Trump and Chinese President Xi Jinping 
  • The Nikkei 225 finished down --2.39%, the Hang Seng ended up +0.29%, the Hang Seng China Enterprise up +0.23%, and the CSI 300 was +0.21%
  • Hong Kong investment confidence, as measure by a JP Morgan index, drops into negative territory for the first time since CY2009 
  • 42% of Hong Kong investors surveyed as part of Hong Kong Investment Confidence index believe the Hang Seng will drop from a current level of 27,260 to 26,000-24,000.  
  • Investor sentiment for Japanese stocks finished negative with the advance/decline ratio for the Nikkei 225 closing at 0.01x
  • 68 stocks in the Nikkei 225 hit 4-week highs while 1 stock reached 4-week lows
  • 3 stocks in the Nikkei 225 closed overbought while 3 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 0.92x
  • 30 stocks in the Hang Seng hit 4-week highs while 0 stocks reached 4-week lows
  • 3 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 lower with yields up 0.1 basis points to -0.129%
  • Japan 10-Year Government Bonds are higher with yields down -1.2 basis points to 0.074%
  • JGBs 2s-10s Spread has narrowed 1.3 basis points to 0.2%
  • JPY¥ is currently down -0.757% against the USD$ to 112.8

 

*Data in Price Return and Updated Real-Time (with a delay), Source: StockDio

Stock Sentiment

Top Stocks by 7-day News Volume

On Mobile/Tablet scroll to the right.

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 2137 7.29 0 8 -0.09% 2.14%
Morgan Stanley 767 8.14 1 3 -0.02% 3.61%
Microsoft Corp 695 7.14 -1 30 -0.02% 4.79%
General Motors Co 686 4.86 14 18 0.2% 0.25%
Goldman Sachs Group Inc/The 618 7.14 -2 18 -0.25% 2.78%

Note: Please see our General FAQs to learn how we define and measure News Volume

Top Stocks by 7-Day Average News Buzz

On Mobile/Tablet scroll to the right.

Name 7 Day News
Volume
7 Day Average
News Buzz
1M EPS Net
Revisions
3M EPS Net
Revisions
1M EPS
% Chg
3M EPS
% Chg
BlackRock Inc 436 9.14 -3 3 -0.9% -4.44%
Citigroup Inc 409 8.86 1 10 0.14% 5.5%
Union Pacific Corp 10 8.57 0 19 0.09% 4.94%
Emerson Electric Co 45 8.43 -12 -12 3.55% 3.32%
Wells Fargo & Co 419 8.43 -3 -11 -0.27% 1.87%

Note: Please see our General FAQs to learn how we define and measure News Buzz

Implied Volatility Data For Liquid Macro Index ETFs

On Mobile/Tablet scroll to the right.

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 13.96 72.22% 14.78 76.59% 1.06 36.71% -4.85 15.48% -3.18 25.79%
QQQ 19.78 76.59% 19.81 78.57% 1 38.89% -7.9 13.89% -7.23 9.92%
IWM 17.47 78.97% 17.49 81.94% 1 29.17% -2.96 17.46% -2.9 13.29%
FEZ 16.11 67.86% 16.78 80.36% 1.04 54.17% -1.52 29.37% -0.03 45.44%
EEM 20.35 69.44% 20.39 74.21% 1 39.48% -3.7 14.68% -3.83 7.94%

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

On Mobile/Tablet scroll to the right

Winners Ticker Sector Industry 1D Return 5D Return YTD
NEXSTAR MEDIA GROUP NXST Consumer Discretionary Media 6.65% 12.98% 15.76%
MARRIOTT VACATIONS WORLDWIDE VAC Consumer Discretionary Hotels, Restaurants & Leisure 4.64% 9.79% -46.18%
MASTERCARD INC MA Information Technology IT Services 4.28% 8.97% 32.86%
EPAM SYSTEMS INC EPAM Information Technology IT Services 3.16% 7.75% 21.52%
COSTAR GROUP INC CSGP Industrials Professional Services 3.06% 2.1% 24.94%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
VERIZON COMMUNICATIONS INC VZ Telecommunication Services Diversified Telecommunication Services -3.61% -1.72% 12.92%
FIRSTCASH INC FCFS Financials Consumer Finance -2.39% 0.0% 25.35%
SHERWIN-WILLIAMS CO SHW Materials Chemicals -1.36% 1.64% 1.96%
BROADRIDGE FINANCIAL SOLUTNS BR Information Technology IT Services -1.16% 5.64% 15.21%
JEFFERIES FINANCIAL GRP INC JEF Financials Diversified Financial Services -1.06% 0.37% -19.44%

Source: S&P Capital IQ, StockDio

Top Short Winners and Losers

On Mobile/Tablet scroll to the right

Winners Ticker Sector Industry 1D Return 5D Return YTD
AGIOS PHARMACEUTICALS AGIO Health Care Biotechnology -14.69% -16.41% -5.18%
DISCOVERY INC DISCA Consumer Discretionary Media -8.56% -6.65% 19.91%
PBF ENERGY INC PBF Energy Oil, Gas & Consumable Fuels -6.1% -5.14% 3.44%
SOUTHWESTERN ENERGY CO SWN Energy Oil, Gas & Consumable Fuels -3.81% -8.47% -24.19%
SNAP INC SNAP Information Technology Software -2.33% -2.18% -85.47%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
GLOBAL BLOOD THERAPEUTICS GBT Health Care Biotechnology 39.08% 32.13% 11.39%
LAREDO PETROLEUM INC LPI Energy Oil, Gas & Consumable Fuels 16.03% 1.18% -77.0%
OASIS PETROLEUM INC OAS Energy Oil, Gas & Consumable Fuels 8.2% 1.95% -10.06%
ESPERION THERAPEUTICS INC ESPR Health Care Biotechnology 7.95% 10.37% -14.44%
PDC ENERGY INC PDCE Energy Oil, Gas & Consumable Fuels 7.9% 0.74% -36.39%

Source: S&P Capital IQ, StockDio

Cryptos

  • Cryptocurrencies are generally off lows observed yesterday afternoon as Bitcoin (BTC) is once again holding just above the USD$4,000 level, trading at USD$4,004.04. EOS (EOS) is the biggest loser among major cryptocurrencies, down 10% in the last 24 hours to trade at USD$2.55. Binance Coin (BNB) and NEM (XEM), the 15th and 16th largest cryptocurrencies by market capitalization, are up 6.81% and 3.80% in the last 24 hours, respectively, while TRON (TRX) is up 0.45% in the last 24 hours. 
  • A pre-solicitation document published by the US Department of Homeland Security (DHS) Innovation Research Program indicates that the government organization wants to know if it is possible to track transactions conducted through privacy coins. The document begins by discussing that privacy and anonymity are key features on networks like Zcash (ZEC) and Monero (XMR) before saying, “While these features are desirable, there is similarly a compelling interest in tracing and understanding transactions and actions on the blockchain of an illegal nature.” The document concludes by highlighting that three phases pertaining to a proposal will follow this document.  
  • SK Group, a major South Korean technology holding company, has signed a Memorandum of Understanding (MoU) with ConsenSys, a large Ethereum blockchain software solutions company, as per an official press release. The MoU details an aim to develop an, “enterprise blockchain development hub,” in South Korea by using smart contracts, adding that, “The two companies will begin to explore business models for expanding their enterprise blockchain business through joint analysis of their respective blockchain platforms, technologies, and services.” Additionally, the partnership will explore education of Korean developers in Ethereum blockchain technology through both the ConsenSys Academy and SK Holdings C&C’s Tech Training Center. 
  • SP Jain School of Global Management, one of India's top ten business schools, has awarded 1,189 graduates with degrees based on a blockchain network, according to a report by news outlet Business World. The system of issuing degrees is designed to prevent fraud and will allow employers to verify the authenticity of an employee's qualifications without contacting the school itself. The blockchain system is based on the Ethereum network. 

Cryptocurrencies Today

*Data in Price Return and Updated Real-Time (with a delay), Source: StockDio

Events Calendar

On Mobile/Tablet scroll to the right

 

Source: S&P Capital IQ