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Global stocks continue drop as US-China tensions rise following arrest of Huawei CFO

Dec 10, 2018

 

 

Market data as of 7:40am

 

US Stocks

  • US stocks index futures are dropping and point to a second straight day of losses, following news that the CFO of Huawei was arrested by Canadian authorities at the suggestion of US officials: front Dow Jones minis –0.42%. S&P500 minis –0.40%, and Nasdaq 100 minis –0.40% 
  • The spread between S&P500 earnings yields and the 10-year TIPS yield is at the highest levels since late CY2016 which suggests embedded risk premium for stocks has gone back to levels not seen before the election of US President Donald Trump
  • UBS Wealth Management sees the outperformance of US Value stocks vs. US Growth stocks to continue well into CY2019 with energy and financials stocks driving the divergence: energy and financials stocks make up close to a third of the US Value index 
  • SPDR S&P500 (SPY) saw positive fund flows of USD$1.58 billion, increasing total assets under management 0.66% to USD$248.9 billion
  • Emerging Markets stocks ETFs saw positive fund flows of USD$1.46 billion last week even though the MSCI EM ETF (EEM) finished down 2.92% for the week
  • The VIX is little changed this morning and is currently at 23.87 after closing at 23.23 last week
  • SPY December 28 OTM Calls, January 2019 OTM Calls & February 2019 Calls; KRE January 2019 OTM Calls; Bank of America (BAC) January 2020 OTM Calls; and SLV January 2019 OTM Puts are some of the most actively traded options in the US pre-market this morning.
  • US 10-Year Treasury Bonds are lower with yields up 0.53 basis points to 2.8503%
  • The US Treasury 2s-10s Spread has widened 0.34 basis points to 0.14%
  • WTI Crude is currently down 1.41% to USD$51.87/bbl with the Brent-WTI spread up USD$1.81 to USD$9.19/bbl
  • Gold is currently little changed -0.18% to USD$1247.01/oz
  • Global oil prices are trading down today over worries about the fallout of rising tensions between the US and China as the market awaits OPEC’s cut to production
     

Stocks Trending in the News

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

 
  • Alibaba (BABA) is considering joining a new funding round for Megvii, the maker of facial recognition software Face++.  Megvii is seeking USD$500mn in new funding and is considering a valuation of between USD$3.5-4 billion, Alibaba has previously participated in funding for Megvii.  Megvii makes facial recognition software that scans faces for security systems.  Alibaba is not rated in our Global Top Stock Ideas. 
  • ASM Pacific Technology Limited (SEHK: 522) shares are falling amid worries that the recent Huawei case will cause the United States to increase import and export controls on Chinese tech products. A wide range ASM Pacific’s products would be affected by the controls. On Friday, ASM Pacific was downgraded to “Underperform” from “Neutral” at Macquarie, which cited expected cuts to earnings guidance. ASM Pacific is rated “Attractive” in our China All-Cap Global Top Stock Ideas. 
  • BASF (DB: BAS) has issued another profit warning, saying that deteriorating markets will hurt earnings.  BASF sees earnings before interest and taxes falling 15-20%.  Its previous warning stated the drop would be about 10%.  BASF is citing lower chemical prices a weaker automotive market as the reason for the profit warning.  BASF is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • Boeing (BA) announced it is launching the BBJ 777X, a new Boeing business jet that can fly farther than any business jet ever.  The new Boeing BBJ 777X can fly halfway around the world non-stop.  The longest-range model of the new jet can fly 11,645 nautical miles without stopping to refuel.  Boeing is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.
  • Bunge (BG) CEO Soren Schroeder will step down, the company has announced.  Sorem will stay on as CEO until the Board can find a replacement.  It was reported last week that Bunge was in talks with potential buyers who would be interested in a transaction once Soren stepped down as CEO.  Bunge is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Staples Global Top Stock Ideas.  
  • Gilead Sciences (GILD) has named a veteran executive from Roche Holdings (SWX: ROG), Daniel O’Day, to take over as Chairman and CEO.  Gilead is tasking him with expanding the reach of Gilead beyond its core drugs of anti-viral treatments for HIV and hepatitis.  Mr. O’Day will take over in his new role on March 1, 2019.  Gilead is rated “Top Buy” in our European Large-Cap Global Top Stock Ideas    Roche Holdings is rated “Top Buy” in our European Large-Cap Global Top Stock Ideas. 
  • Gol Linhas Aereas (GOLL4) announced it will lease an additional 11 737 Max long-haul jets.  Gol will lease the jets as it looks to add a new international destination each quarter for the next 2 years.  Gol is rated “Attractive” in our Brazil All-cap Global top Stock Ideas.
  • Hong Kong Stock Exchanges and Clearing Limited (SEHK: 388), which owns the Stock Exchange of Hong Kong, Asia's third-largest stock exchange, detailed today that it will announce a three-year strategy tomorrow to adopt artificial intelligence (AI) and robotics to increase efficiencies on its exchanges. Additionally, the Hong Kong Stock Exchange is considering how it could develop big data into its own tradeable asset class. Officials from Hong Kong Stock Exchanges and Clearing highlighted that prospects of tradeable big data are in their early stages. Hong Kong Stock Exchanges and Clearing is rated “Top Buy” in our China All-Cap Global Top Stock Ideas. 
  • Tesla (TSLA) CEO Elon Musk, in an interview in 60 Minutes Sunday evening, said none of his tweets have been censored since his problems with the SEC.  Musk said in the interview “I want to be clear.  I do not respect the SEC.”  Musk added that he respects the justice system so he is abiding by the terms of the SEC agreement he made with them.  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.  
  • Tivity Health (TVTY) in acquiring Nutriisystem Inc (NTRI) in a USD$1.3 billion deal.  Tivity Health is a maker of fitness and health programs and is acquiring diet plan company Nutrisystem, paying a 30% premium over the average price of the last 5 trading days.  Nutrisystem is being valued at USD$47 per shares in the transaction.  Tivity will incorporate the Nutrisystem program into its health regimens.  Nutrisystem is rated “Attractive” in our US SMID-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  Tivity Health is rated “Attractive” in our US SMID-Cap Global Top Stock Ideas.

 

 

European Stocks

  • European stocks are declining to start the morning with the specter of escalating trade tensions between the US and China dimming investor sentiment
  • The Euro Stoxx 600 is currently down -0.67%, the FTSE 100 has declined -0.11%, the DAX has fallen -0.52%, and the CAC 40 is lower by -0.47%
  • Earlier this morning, UK Prime Minister Theresa May decided to delay the vote on her proposed BREXIT deal in the House of Commons
  • European stocks strategists are arguing the current risk premiums in the stock market is overpriced with the Stoxx Europe 600 having now erased 2 years' worth of gains
  • Investor sentiment for European stocks is negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.23x
  • Oil & Gas (-1.09%), Telecommunications (-0.78%), and Basic Resources (-0.95%) stocks are the top performers in the Euro Stoxx 600 today
  • Automobiles & Parts (-1.29%), Food & Beverage (-0.44%), and Utilities (-0.65%) stocks are the worst performers in the Euro Stoxx 600 today
  • 13 stocks in the Euro Stoxx 600 are at 4-week highs while 96 stocks are at 4-week lows
  • 3 stocks in the Euro Stoxx 600 are overbought while 84 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 22.74 after closing at 21.67 yesterday
  • EUR€ is currently up +0.316% against the USD$ to 1.1415
  • GBP£ is currently down -0.393% against the USD$ to 1.2676
  • CHF is currently up +0.228% against the USD$ to 1.0113
  • German 10-Year Bunds are lower with yields up 0.3 basis points to 0.252%
  • UK 10-Year GILTs are higher with yields down -4.2 basis points to 1.223%
     

Asian Stocks

  • Asia stocks dropped in overnight trading amid rising concern about the fallout of the arrest of the CFO of Huawei by Canadian authorities at the behest of US officials 
  • The Nikkei 225 finished down --2.12%, the Hang Seng ended down -1.19%, the Hang Seng China Enterprise declined -0.93%, and the CSI 300 was -1.16%
  • Hong Kong stocks are now trading at a 3-week low
  • Investor sentiment for Japanese stocks finished negative with the advance/decline ratio for the Nikkei 225 closing at 0.06x
  • 1 stock in the Nikkei 225 hit 4-week highs while 50 stocks reached 4-week lows
  • 0 stocks in the Nikkei 225 closed overbought while 17 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
  • 6 stocks in the Hang Seng hit 4-week highs while 5 stocks reached 4-week lows
  • 1 stock in the Hang Seng closed overbought while 2 stocks closed oversold according to the 16-day RSI Measure
  • Japan 2-Year Government Bonds are higher with yields down -0.4 basis points to -0.145%
  • Japan 10-Year Government Bonds are higher with yields down -1.6 basis points to 0.043%
  • JGBs 2s-10s Spread has narrowed 1.2 basis points to 0.19%
  • JPY¥ is currently little changed against the USD$ at 112.65

 

*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 2140 7.29 0 8 0.05% 2.58%
Morgan Stanley 584 5.71 1 3 -0.02% 3.62%
Microsoft Corp 574 6.43 -1 30 -0.02% 4.79%
Goldman Sachs Group Inc/The 508 6.43 -2 18 -0.15% 2.78%
Bank of America Corp 486 8.29 -3 8 -0.04% 1.72%

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 461 9.14 -3 3 -1.99% -5.48%
Citigroup Inc 463 8.57 1 10 0.14% 5.6%
Bank of New York Mellon Corp/The 150 8.57 -1 3 -0.56% -0.06%
Visa Inc 121 8.57 -2 3 0.02% 4.64%
Bank of America Corp 486 8.29 -3 8 -0.04% 1.72%

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 19.49 96.03% 18.86 98.02% 0.97 14.48% -2.15 29.37% -0.73 38.49%
QQQ 24.34 89.29% 23.52 95.63% 0.97 29.76% -6.07 20.24% -5.29 20.24%
IWM 22.81 95.63% 21.74 98.81% 0.95 18.25% -1.98 20.63% -0.6 28.17%
FEZ 19.69 91.27% 19.33 96.03% 0.98 34.13% 0.22 49.6% 1.67 69.64%
EEM 23.36 84.92% 23.19 96.43% 0.99 36.11% -1.91 29.76% -1.66 30.95%

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 2.74% 2.67% 7.3%
CONSOLIDATED EDISON INC ED Utilities Multi-Utilities 1.01% 3.98% 2.33%
CENTERPOINT ENERGY INC CNP Utilities Multi-Utilities 0.74% 2.28% 5.39%
AMERICAN ELECTRIC POWER CO AEP Utilities Electric Utilities 0.71% 3.82% 12.79%
BROADCOM INC AVGO Information Technology Semiconductors & Semiconductor Equipment 0.58% -3.11% -12.72%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
VAIL RESORTS INC MTN Consumer Discretionary Hotels, Restaurants & Leisure -19.67% -21.85% 7.67%
KAR AUCTION SERVICES INC KAR Industrials Commercial Services & Supplies -6.03% -11.2% 2.0%
LIGAND PHARMACEUTICAL INC LGND Health Care Biotechnology -5.33% -12.27% 4.91%
FORTINET INC FTNT Information Technology Software -5.21% -3.15% 47.91%
ADOBE SYSTEMS INC ADBE Information Technology Software -5.17% -4.55% 29.22%

Source: S&P Capital IQ, StockDio

Top Short Winners and Losers

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Winners Ticker Sector Industry 1D Return 5D Return YTD
AMERICAN AIRLINES GROUP INC AAL Industrials Airlines -9.57% -13.49% -44.68%
GLOBAL BLOOD THERAPEUTICS GBT Health Care Biotechnology -8.98% 28.72% 2.52%
CARVANA CO CVNA Consumer Discretionary Specialty Retail -7.73% -28.02% 66.8%
IMMUNOMEDICS INC IMMU Health Care Biotechnology -7.72% -7.56% 9.86%
ROKU INC ROKU Consumer Discretionary Household Durables -7.37% -7.42% -31.71%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
LIBERTY MEDIA FORMULA ONE FWONK Consumer Discretionary Media 5.75% 6.38% -7.24%
CALIFORNIA RESOURCES CORP CRC Energy Oil, Gas & Consumable Fuels 3.5% -10.97% 8.76%
WHITING PETROLEUM CORP WLL Energy Oil, Gas & Consumable Fuels 3.33% -1.33% 8.84%
ALLAKOS INC ALLK Health Care Biotechnology 3.03% 2.02% 69.52%
LAREDO PETROLEUM INC LPI Energy Oil, Gas & Consumable Fuels 2.89% 0.88% -88.78%

Source: S&P Capital IQ, StockDio

Cryptos

  • Cryptocurrency markets spent the weekend in the green after Friday’s rout as the price of Bitcoin (BTC) is up 5.74% since end of day Friday to USD$3,603.19. Among major cryptocurrencies, EOS (EOS) is the weekend’s best performer, up 15.56% on the weekend to USD$1.99 after losing nearly 30% in Friday’s trading. Bitcoin SV (BSV) is the only major cryptocurrency lower for the weekend, down 2.39% to USD$98.86.  
  • Gemini, a cryptocurrency exchange heralded by the Winklevoss twins, released an official company blog post this weekend announcing that the firm will support Bitcoin Cash (BCH) custody and trading. The exchange will support only the Bitcoin Cash ABC network at this time, adding that they, “are continuing to evaluate Bitcoin SV over the coming weeks or months, and we may or may not choose to support withdrawals and/or trading of Bitcoin SV in the future.” Additionally, the company detailed that its listing of BCH is pending regulatory approval by the New York State Department of Financial Services.  
  • Bitmain, a large Chinese cryptocurrency mining firm, announced that it is closing its development center in Israel, citing current cryptocurrency market conditions. In closing Bitmaintech Israel, the crypto mining giant was forced to fire all 23 employees. Among the employees let go is Gadi Glikberg, head of Bitmain’s Israeli branch and Vice President of International Sales, who said on the recent market turmoil, “The crypto market has undergone a shake-up in the past few months, which has forced Bitmain to examine its various activities around the globe and to refocus its business in accordance with the current situation.” 
  • Pan Gongsheng, a deputy governor of the People’s Bank of China, highlighted that Security Token Offerings (STOs) in China are illegal while speaking at a summit in Beijing. As per a report by news outlet the South China Morning Post, Gongsheng told the summit that, “illegal financing activities through STOs and ICOs were still rampant in the mainland despite a nationwide clean-up of the cryptocurrency market last year.” In citing reasoning for the continued ban on STOs, Gongsheng explained that, “Virtual money has become an accomplice to all kinds of illegal and criminal activities.”

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
Stitch Fix, Inc. SFIX 12/10/2018 Earnings Release Date US Large-Cap: F
Grand Baoxin Auto Group Limited SEHK:1293 12/10/2018 Estimated Earnings Release Date China All-Cap: C
DSW Inc. DSW 12/11/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: B
Arrowhead Pharmaceuticals, Inc. ARWR 12/11/2018 Earnings Release Date US Large-Cap: D
American Eagle Outfitters, Inc. AEO 12/11/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: B
Dave & Buster's Entertainment, Inc. PLAY 12/11/2018 Earnings Release Date US Large-Cap: D, US Consumer Discretionary: B
Pivotal Software, Inc. PVTL 12/11/2018 Earnings Release Date US Large-Cap: F, US Information Technology: D
Renren Inc. RENN 12/11/2018 Estimated Earnings Release Date China All-Cap: F
Tailored Brands, Inc. TLRD 12/12/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: C
Ciena Corporation CIEN 12/13/2018 Earnings Release Date US Large-Cap: C, US Information Technology: C
Costco Wholesale Corporation COST 12/13/2018 Earnings Release Date US Large-Cap: B, US Consumer Staples: C
Adobe Inc. ADBE 12/13/2018 Estimated Earnings Release Date US Large-Cap: A, US Information Technology: C
Sanderson Farms, Inc. SAFM 12/13/2018 Estimated Earnings Release Date US Large-Cap: F, US Consumer Staples: C
Prada S.p.A SEHK:1913 12/13/2018 Estimated Earnings Release Date China All-Cap: C
Oracle Corporation ORCL 12/17/2018 Earnings Release Date US Large-Cap: C, US Information Technology: A
HEICO Corporation HEI 12/17/2018 Earnings Release Date US Large-Cap: A, US Industrials: C
Red Hat, Inc. RHT 12/17/2018 Earnings Release Date US Large-Cap: C, US Information Technology: C
Lennar Corporation LEN 12/17/2018 Estimated Earnings Release Date US Large-Cap: A, US Consumer Discretionary: C
China Internet Nationwide Financial Services Inc. CIFS 12/17/2018 Estimated Earnings Release Date China All-Cap: F
Newater Technology, Inc. NEWA 12/17/2018 Estimated Earnings Release Date China All-Cap: D

Source: S&P Capital IQ