morning-quant-ride

Morning Brief

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

Risk-off feel gripping global stocks with tech leading the way

Dec 06, 2018

 

 

Market data as of 7am EST

 

US Stocks

  • Global stocks are dropping as a risk-off feel grips markets with tech stocks driving the declines this morning
  • US stocks index futures are dropping this morning, pointing to a negative open in NY with front-month Dow Jones minis –1.60%, S&P500 minis –1.55%, and Nasdaq 100 minis -2.03%
  • Canadian authorities announced they have arrested the CFO of the Chinese technology company Huawei, Meng Wazhou, and she faces extradition to the United States.  Local traders worry this news could derail the momentum in negotiations between US and Chinese officials in the ongoing trade dispute between the two countries.  
  • Semiconductor stocks are trading lower this AM with major US suppliers of Huawei already dropping in pre-market trading
  • The VIX is moving higher this morning and is currently at 24.20 after closing at 20.74 yesterday
  • Bank of America (BAC) December 07 & January 2019 OTM Calls; SPY December 07, December 21, December 28, and January 2019 OTM Calls are some of the most actively traded options contracts in the US pre-market trading
  • US 10-Year Treasury Bonds are flat with yields little changed 0 basis points to 2.9136%
  • The US Treasury 2s-5s Spread has little changed 0 basis points to -0.01%
  • The US Treasury 2s-10s Spread has little changed 0 basis points to 0.12%
  • WTI Crude is currently lower 1.34% to USD$51.56/bbl with the Brent-WTI spread up USD$0.55 to USD$8.71/bbl
  • Gold is currently little changed -0.02% to USD$1238.34/oz
  • OPEC meets today in Vienna, Austria where traders expect a cut to daily production of 1.3 million barrels/day 
  • Saudi Energy Minister Khalid Al-Falih suggests OPEC hasn’t formally reached a deal on production cuts yet
     

Stocks Trending in the News

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

  • Autoliv (ALV) said it has reserved USD$210mn to cover a potential fine from the European Commission, according to a note from Pareto.  The fine relates to an investigation of suppliers of occupant safety systems being conducted by the European Commission.  Autoliv would see a ~24% cut to consensus EPS for 2018, the note highlights.  Autoliv is not rated on our Global Top Stock Ideas.  
  • BAE Systems (BA LN) was downgraded today by UBS.  BAE Systems saw its rating cut to neutral from buy, its price target was cut to 505 pence from 720 pence.  UBS said it is “more cautious” on the defense industry in Europe overall.  BAE Systems is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Bombardier (BBD.B CN) said it sees revenue growing 10% in 2019 over 2018’s USD$18 billion guidance.  Bombardier sees 2019 adjusted ebitda of USD$1.65-1.8 billion.  Bombardier is rated “Neutral” in our Canada All-Cap Global Top Stock Ideas.
  • Dollarama (TSX: DOL) reports FY3Q2018 financials that generally miss analyst estimates. Dollarama generated an EPS of CAD$0.41/share in FY3Q2018 while analysts’ consensus called for CAD$0.43. Dollarama saw quarterly sales of CAD864.3mm in FY3Q2018 while analysts expected CAD$893.2mm. Despite missing earnings and sales estimates, Dollarama’s comparable sales growth of 3.1% was enough to squeak by the analyst consensus estimate of 3.06%. Dollarama is rated “Top Buy” in our Canada All-Cap Global Top Stock Ideas. 
  • Epic Games Inc., maker of the hugely popular “Fortnite”, said it will open its own online store to sell its apps and those of other developers.  The announcement was aimed at Apple (AAPL) as Epic Games will only charge a commission of 12%, that is less than half of what Apple charges to sell apps in its store.  Macquarie commented in a note that this audacious move could lead other developers to demand the same deal from Apple.  Apple is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Euromoney (ERM LN) will acquire “Boardex” and “The Deal” from The Street (TST).  Euromoney said the acquisition will create “a powerful workflow tool across multiple industries.  Boardex is an executive profile platform and The Deal is a platform focused on M&A news and data.  Euromoney will fund the acquisition with existing funding.  Euromoney is not rated on our Global Top Stock Ideas.  The Street is rated “Neutral” in our US Micro-Cap Global Top Stock Ideas.
  • Facebook (FB) had emails published that were sent among executives showing them trying to maximize the use of customers’ data.  The emails show executives treating customer data like a commodity that could be traded and used to Facebook’s benefit.  These emails from Facebook show customer data being used for the benefit of Facebook and seemingly without a care for the customers themselves.  Facebook is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas. 
  • Huawei Technologies Co.’s Chief Financial Officer Wanzhou Meng was arrested by Canadian officials at the instruction of the United States for allegedly violating Iranian sanctions. The US is now seeking the extradition of Meng while Chinese authorities are up in arms, calling for the release of the daughter of Huawei founder Ren Zhengfei. The arrest threatens to upend US-China trade negations, sending the shares of Qualcomm (QCOM), Advanced Micro Drives (AMD), Texas Instruments, Inc. (TXN), and other US-based chipmakers lower in pre-market trading. Qualcomm is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas. Advanced Micro Drives is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas. Texas Instruments is rated “Neutral” in our US large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Lam Research (LRCX) announced it fired CEO Martin Anstice.  Lam Research he was fired after an investigation into workplace misconduct.  Lam Research did not detail the details of the investigation but said it did not involve any financial misconduct.  Lam’s COO took over as CEO for now.  Lam Research is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas. 
  • Tesla (TSLA) will start production at its new Shanghai facility in the second half of 2019.  The new factory, dubbed “Gigafactory 3”, will be the biggest ever foreign owned manufacturing facility in Shanghai.  Local officials visited the project yesterday, asking Tesla to accelerate construction, according to a message a release from local officials. Tesla is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
     

 

European Stocks

  • European stocks are declining this morning with the Stoxx Europe 600 experiencing the biggest 1-day drop since the day after the BREXIT vote
  • The Euro Stoxx 600 closed down -1.16%, the FTSE 100 declined -1.44%, the DAX fell -1.19%, and the CAC 40 finished down -1.36%
  • UK stocks continue their slide over worries that UK Prime Minister Theresa May won’t be able to get her BREXIT deal through Parliament – the FTSE 100 is now below its closing level at the end of 1999
  • Investor sentiment for European stocks finished trading negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.32x
  • Real Estate (+0.35%), Utilities (+0.13%), and Travel & Leisure (-0.08%) stocks were the top performers in the Euro Stoxx 600 today
  • Construction & Materials (-2.14%), Basic Resources (-1.93%), and Insurance (-1.82%) stocks were the worst performers in the Euro Stoxx 600 today
  • 29 stocks in the Euro Stoxx 600 hit 4-week highs while 65 stocks closed at 4-week lows
  • 10 stocks in the Euro Stoxx 600 finished the trading session overbought while 27 stocks closed oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, is higher this morning  and is currently at 22.80 after closing at 19.09 yesterday
  • EUR€ is currently little changed against the USD$ at 1.1352
  • GBP£ is currently up +0.197% against the USD$ to 1.2744
  • CHF is currently little changed against the USD$ at 1.0022
  • German 10-Year Bunds are lower with yields up 1.4 basis points to 0.277%
  • UK 10-Year GILTs are lower with yields up 3.4 basis points to 1.315%

Asian Stocks

  • Asia stocks dropped in overnight trading with the “risk-off” mood in global markets continuing for a third straight day 
  • The Nikkei 225 finished down --0.53%, the Hang Seng ended down -1.62%, the Hang Seng China Enterprise declined -1.38%, and the CSI 300 was -0.48%
  • Moody’s reaffirms its “stable” outlook for Asian banks heading into CY2019, including Chinese mainland lenders, despite a weakening outlook for growth.  However, a sharp escalation in the trade dispute between the US and Chinese government could materially impact the credit worthiness of the banks.
  • Investor sentiment for Japanese stocks finished negative with the advance/decline ratio for the Nikkei 225 closing at 0.41x
  • 1 stock in the Nikkei 225 hit 4-week highs while 54 stocks reached 4-week lows
  • 1 stock in the Nikkei 225 closed overbought while 6 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 0.14x
  • 1 stock 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 2-Year Government Bonds are higher with yields down -1 basis points to -0.139%
  • Japan 10-Year Government Bonds are higher with yields down -0.8 basis points to 0.066%
  • JGBs 2s-10s Spread has widened 0.2 basis points to 0.21%
  • JPY¥ is currently up +0.328% against the USD$ to 113.14

 

*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 2109 7.29 0 8 -0.09% 2.43%
Morgan Stanley 725 6.86 1 3 -0.02% 3.61%
Microsoft Corp 631 6.86 -1 30 -0.02% 4.79%
Goldman Sachs Group Inc/The 551 6.57 -2 18 -0.15% 2.78%
BlackRock Inc 444 9 -3 3 -0.9% -4.44%

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
BlackRock Inc 444 9 -3 3 -0.9% -4.44%
Visa Inc 121 8.57 -2 3 0.02% 4.64%
Citigroup Inc 421 8.43 1 10 0.74% 5.6%
Bank of New York Mellon Corp/The 136 8.43 -1 3 -0.01% 0.49%
Bank of America Corp 428 8.29 -3 8 -0.04% 1.73%

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 17.38 89.29% 17.22 93.25% 0.99 19.84% -4.68 15.87% -1.87 30.56%
QQQ 23.12 86.11% 22.1 90.48% 0.96 25.6% -7.73 14.68% -5.99 18.25%
IWM 21.37 92.46% 20.46 96.43% 0.96 20.24% -3.85 13.89% -1.55 22.62%
FEZ 17.82 81.35% 18.03 92.06% 1.01 44.25% -1.88 25.99% 0.65 60.71%
EEM 22.62 81.75% 21.44 81.55% 0.95 20.04% -2.66 21.43% -3.08 10.71%

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
CONSOLIDATED EDISON INC ED Utilities Multi-Utilities 0.93% 3.65% 1.76%
DUKE ENERGY CORP DUK Utilities Electric Utilities 0.48% 2.5% 12.42%
CMS ENERGY CORP CMS Utilities Multi-Utilities 0.42% 2.66% 14.36%
OGE ENERGY CORP OGE Utilities Electric Utilities 0.38% 2.04% 24.41%
CHURCH & DWIGHT INC CHD Consumer Staples Household Products 0.29% 0.59% 31.45%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
MARRIOTT VACATIONS WORLDWIDE VAC Consumer Discretionary Hotels, Restaurants & Leisure -8.87% -0.15% -55.05%
DISCOVER FINANCIAL SVCS DFS Financials Consumer Finance -7.7% -6.57% -12.74%
EAGLE MATERIALS INC EXP Materials Construction Materials -7.57% -6.82% -54.92%
SYNOVUS FINANCIAL CORP SNV Financials Banks -7.47% -4.63% -29.3%
JEFFERIES FINANCIAL GRP INC JEF Financials Diversified Financial Services -7.24% -6.78% -26.68%

Source: S&P Capital IQ, StockDio

Top Short Winners and Losers

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Winners Ticker Sector Industry 1D Return 5D Return YTD
CARVANA CO CVNA Consumer Discretionary Specialty Retail -10.99% -18.12% 74.06%
REGENXBIO INC RGNX Health Care Biotechnology -10.09% -16.77% 45.11%
SUPERIOR ENERGY SERVICES INC SPN Energy Energy Equipment & Services -10.07% -24.84% -70.41%
IMMUNOMEDICS INC IMMU Health Care Biotechnology -8.99% 7.5% 16.73%
GARDNER DENVER HOLDINGS INC GDI Industrials Machinery -8.6% -4.86% -37.02%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
GULFPORT ENERGY CORP GPOR Energy Oil, Gas & Consumable Fuels 1.35% 5.26% -38.98%
PIVOTAL SOFTWARE INC PVTL Information Technology Software 0.34% 2.21% 12.59%
DISCOVERY INC DISCA Consumer Discretionary Media -0.78% -7.4% 19.12%
PUMA BIOTECHNOLOGY INC PBYI Health Care Biotechnology -0.55% 3.48% -136.38%
FOREST CITY REALTY TRUST INC FCE.A Real Estate Equity Real Estate Investment Trusts (REITs) -0.04% 0.2% 5.35%

Source: S&P Capital IQ, StockDio

Cryptos

  • Cryptocurrency markets extended their losses through overnight trading as the price of Bitcoin (BTC) is down 1.78% in the last 24 hours to USD$3,829.39. Bitcoin Cash (BCH) plummeted a substantial 14.59% over the last 24 hours to USD$120.15 while Bitcoin SV (BSV), the controversial fork of the Bitcoin Cash Network that came into existence on November 15th, is up 3.92% in the last 24 hours to USD$93.53. After Binance Coin (BNB) posted double digit gains yesterday on the announcement of soon-to-come decentralized exchange Binance Chain, BNB fell 13.43% to trade at USD$5.54.  
  • A new research study conducted by Imperial College London researchers Jiahua Xu and Benjamin Livshits finds that ‘pump and dump’ schemes on cryptocurrency markets account for roughly USD$7mm worth of monthly trading volume. The USD$7mm in monthly volume that ‘pump and dump’ schemes are responsible for only equates to 0.049% of today’s 24-hour trading volume of USD$14.2bn. To come to this conclusion, Xu and Livshits investigated 236 ‘pump and dump’ scams that occurred between July 21st, 2018 and November 18th, 2018.  
  • SBHI Holdings, a financial services giant based in Japan, is partnering with R3, a software firm, to promote and expand the use of blockchain platform Corda, as per Japanese news outlet Nikkei. As part of the partnership, SBI Holdings with increase its existing investment in R3 to create a joint venture geared towards promotion of Corda. “Europe is the most advanced in blockchain product development,” R3 CEO David Rutter said to Nikkei, adding, “The new joint venture will strengthen the Japanese language services, and promote adoption.” 
  • The United States Department of Homeland Security (DHS) published a press release on Tuesday calling on startups and small businesses to help design blockchain-based solutions to combat the forgery and counterfeiting of digital documents. The press release contains a link to a solicitation by the US DHS titled, “Preventing Forgery and Counterfeiting of Certificates and Licenses,” while calling on startups or small enterprises who have not had a government contract in the past 12 months (totaling more than USD$1mm) and that have a workforce of less than 200. Selected applicants can receive up to USD$800,000 in non-dilutive funding across four phases, the release notes.
     

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
The Children's Place, Inc. PLCE 12/6/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: C
At Home Group Inc. HOME 12/6/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: C
H&R Block, Inc. HRB 12/6/2018 Earnings Release Date US Large-Cap: A, US Consumer Discretionary: C
The Michaels Companies, Inc. MIK 12/6/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: D
Patterson Companies, Inc. PDCO 12/6/2018 Earnings Release Date US Large-Cap: F
Thor Industries, Inc. THO 12/6/2018 Earnings Release Date US Large-Cap: D, US Consumer Discretionary: D
The Kroger Co. KR 12/6/2018 Earnings Release Date US Large-Cap: C, US Consumer Staples: C
Korn/Ferry International KFY 12/6/2018 Earnings Release Date US Industrials: D
DocuSign, Inc. DOCU 12/6/2018 Earnings Release Date US Large-Cap: C, US Information Technology: D
The Cooper Companies, Inc. COO 12/6/2018 Earnings Release Date US Large-Cap: B
Lululemon Athletica Inc. LULU 12/6/2018 Earnings Release Date US Large-Cap: C
Ulta Beauty, Inc. ULTA 12/6/2018 Earnings Release Date US Large-Cap: A, US Consumer Discretionary: A
United Natural Foods, Inc. UNFI 12/6/2018 Earnings Release Date US Large-Cap: C, US Consumer Staples: D
Henderson Land Development Company Limited SEHK:12 12/6/2018 Estimated Earnings Release Date China All-Cap: B
Razer Inc. SEHK:1337 12/6/2018 Estimated Earnings Release Date China All-Cap: F
HengTen Networks Group Limited SEHK:136 12/6/2018 Estimated Earnings Release Date China All-Cap: C
China Everbright Limited SEHK:165 12/6/2018 Estimated Earnings Release Date China All-Cap: B
Shuang Yun Holdings Limited SEHK:1706 12/6/2018 Estimated Earnings Release Date China All-Cap: F
Hope Education Group Co., Ltd. SEHK:1765 12/6/2018 Estimated Earnings Release Date China All-Cap: F
Sunac China Holdings Limited SEHK:1918 12/6/2018 Estimated Earnings Release Date China All-Cap: C
51 Credit Card Inc. SEHK:2051 12/6/2018 Estimated Earnings Release Date China All-Cap: D
ENN Energy Holdings Limited SEHK:2688 12/6/2018 Estimated Earnings Release Date China All-Cap: B
China Huarong Asset Management Co., Ltd. SEHK:2799 12/6/2018 Estimated Earnings Release Date China All-Cap: F
Vobile Group Limited SEHK:3738 12/6/2018 Estimated Earnings Release Date China All-Cap: D
Beijing Enterprises Holdings Limited SEHK:392 12/6/2018 Estimated Earnings Release Date China All-Cap: B
China Communications Services Corporation Limited SEHK:552 12/6/2018 Estimated Earnings Release Date China All-Cap: B
Pan Asia Environmental Protection Group Limited SEHK:556 12/6/2018 Estimated Earnings Release Date China All-Cap: D
Shougang Fushan Resources Group Limited SEHK:639 12/6/2018 Estimated Earnings Release Date China All-Cap: C
Shangri-La Asia Limited SEHK:69 12/6/2018 Estimated Earnings Release Date China All-Cap: C
Beijing Capital International Airport Company Limited SEHK:694 12/6/2018 Estimated Earnings Release Date China All-Cap: B
Sinopec Kantons Holdings Limited SEHK:934 12/6/2018 Estimated Earnings Release Date China All-Cap: C
Jupai Holdings Limited JP 12/6/2018 Earnings Release Date China All-Cap: D

Source: S&P Capital IQ