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Morning Brief

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Global stocks rebound as US-China trade talks move forward

Dec 11, 2018

 

 

Market data as of 7am EST 

 

US Stocks

  • US stocks index futures are bouncing back this morning with front-month Dow Jones minis +0.93%, S&P 500 minis +0.85% and NASDAQ 100 minis +1.12% 
  • The Chinese government made a formal statement announcing that Vice Premier Liu He spoke with US Secretary of Treasury Steven Mnuchin and US Trade Representative Robert Lighthizer by phone – this news has put a bid into global markets as there is hope that the US and China will be able to work through their differences and avoid fallout from the news that the CFO of Huawei was arrested by Canadian authorities at the suggestion of US officials
  • The VIX is little changed this morning and is currently at 22.11 after closing at 22.64 yesterday
  • Bank of America (BAC) December 14 & January 2020 OTM Calls, QQQ December 21 OTM Puts, SPY December 21 & January 2019 OTM Puts and F January 2019 OTM Puts are some of the most actively traded options contracts in the US pre-market
  • US 10-Year Treasury Bonds are lower with yields up 2.33 basis points to 2.8808%
  • The US Treasury 2s-10s Spread has widened 0.69 basis points to 0.14%
  • WTI Crude is currently up 1.2% to USD$51.61/bbl with the Brent-WTI spread up USD$1.39 to USD$8.88/bbl
  • Gold is currently up 0.31% to USD$1248.31/oz
  • The Russian government announces it will begin a gradual reduction in its daily crude oil production with the goal of reducing it by 50,000 to 60,000 barrels/day by January 
  • Saudi Arabia is expected to cut its production by 900,000 barrels/day by January
     

Stocks Trending in the News

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

  • Anheuser-Busch InBev NV (ENXTBR: ABI) had its credit rating cut by Moody’s Investor Services, driven by the brewer’s struggle to lessen its USD$100bn debt burden. Moody’s lowered its credit rating for Anheuser-Busch's unsecured senior debt from A3 to Baa1, the lowest tier of investment-grade debt. This news comes even after Anheuser-Busch announced a plan to slash its dividend payment by 50% to combat high debt levels. Anheuser-Busch is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • Asos Plc (ASC LN) had its price target slashed by Morgan Stanley today to 3,200 pence, the lowest in the market.  Asos’ cash balance has fallen to 43 million pounds, down from 173 million pounds in September 2016.  Morgan Stanley said that while Asos has self-financed its expansion for the last 15 years, “it no longer seems able to do so”.  Asos is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas.
  • AT&T (T) was upgraded today at Citigroup to buy from neutral.  Citigroup upgraded AT&T in the wake of its recent weakness, writing that at this level the stock has “a better risk/reward scenario”.  Citigroup sees AT&T well positioned going into 2019.  AT&T is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Daimler AG (XTRA: DAI) has secured a purchase agreement for 20bn euros (USD$23bn) of battery cells through 2030 to leverage in its shift towards electric vehicles. By 2022, the Mercedes-Benz manufacturer plans to roll out some 130 hybrid and fully-electric car variants across its models. “After investing billions of euros in the development of the electric fleet and the expansion of our global battery network, we are now taking the next step,” said Daimler CEO Dieter Zetsche. Daimler is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • Disney (DIS) had hoped to sell its 22 regional Fox Sports networks to one buyer.  The NY Post reports today, however, that it will sell them to multiple buyers as it conducts management meetings with multiple suitors.  Disney would not deny or confirm the news.  Disney is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • DSW Inc. (DSW) reports FY3Q2018 financials that generally beat analyst estimates. DSW reported FY3Q2018 adjusted EPS of UDS$0.70/share while analysts’ consensus called for USD$0.51/share. Driving DSW’s EPS beat was its comparable sales growth, which came in at 7.30% for FY3Q2018 while analysts only expected 4.32%. DSW is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas. 
  • Distribudora Internacional de Alimentacion (BME: DIA) and its largest shareholder told its banks it is unable to repay a USD$2.1 billion debt it owes, according to a story in El Confidencial.  The news comes as the company is set to leave the Ibex 35 index later this month.  The stock traded over 15% lower on the news.  Distribudora Internacional de Alimenacion is rated “Top Short” in our European SMID-Cap Global Top Stock Ideas.
  • Fiserv (FISV) was upgraded yesterday by Goldman Sachs.  Fiserv was upgraded to buy from neutral while its price target was hiked to USD$92 from USD$78.  Goldman Sachs sees resilient earnings growth in Fiserv and cited that in its upgrade.  Fiserv is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • FleetCor (FLT) was downgraded to neutral from buy today at Goldman Sachs.  FleetCor saw its price target lowered to USD$215 from USD$245.  FleetCor was downgraded as Goldman Sachs takes a more defensive position in the payments & IT sector.  FleetCor is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Qualcomm’s (QCOM) victory in Chinese courts yesterday over Apple (AAPL) concerning a two-year legal dispute over smartphone patents is a very real problem for Apple investors. While Apple is calling Qualcomm’s injunction against the sale of several iPhone models a, “desperate move,” that the company intends to fight, Granite Investment Advisors fund manager Timothy Lesko believes that Apple will be forced to settle in time, saying, “Apple will eventually have to come to the negotiating table with Qualcomm.” Qualcomm is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas. 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.
  • Stitch Fix (SFIX) was downgraded today at William Blair to market perform from outperform.  Stitch Fix reported fiscal 1Q results that beat the highest estimates.  Stitch Fix reported adjusted 1Q ebitda of USD$14.3mm, while 7.98mm was consensus.  1Q revenue of USD$366.2mm was in line with 358.2mm expected.  Adjusted EPS of 10 cents compares to 3 cents expected.  Stitch Fix is rated “Top Short” in our US Large-Cap Global Top Stock Ideas.
  • WPP (LSE WPP) announced it intends to see USD$347mm in annual cost savings by the end of 2021.  If realized, that would push its profit margin from 13% to at least 15%.   WPP will spend 300mm pounds per year to restructure and sees comparable organic sales dropping by 0.5%, up from previous guidance of a fall of between 0.5-1%.  WPP is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas.
     

 

European Stocks

  • European stocks are advancing this morning following a report by Bloomberg News that China is moving forward with a cut to tariffs on cars imported from the US – the current proposal being debated in Beijing would drop tariffs to 15% from 40% 
  • The Euro Stoxx 600 is currently up +1.48%, the FTSE 100 is higher by +1.16%, the DAX has advanced +1.47%, and the CAC 40 has risen +1.55%
  • According to the 14-day RSI signal, the Stoxx Europe 600 is now in oversold territory after formally erasing 2-years' worth of gains yesterday
  • Investor sentiment for European stocks is positive with the advance/decline ratio for the Euro Stoxx 600 currently at 6.32x
  • Oil & Gas (+1.46%), Telecommunications (+2.09%), and Basic Resources (+2.41%) stocks are the top performers in the Euro Stoxx 600 today
  • Automobiles & Parts (+1.26%), Food & Beverage (+0.97%), and Utilities (+2.01%) stocks are the worst performers in the Euro Stoxx 600 today
  • 6 stocks in the Euro Stoxx 600 are at 4-week highs while 276 stocks are at 4-week lows
  • 3 stocks in the Euro Stoxx 600 are overbought while 132 stocks are oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, is moving down this morning and is currently at 20.91 after closing at 23.66 yesterday
  • EUR€ is currently up +0.37% against the USD$ to 1.1398
  • GBP£ is currently up +0.486% against the USD$ to 1.2622
  • CHF is currently up +0.307% against the USD$ to 1.0128
  • German 10-Year Bunds are lower with yields up 1.8 basis points to 0.264%
  • UK 10-Year GILTs are lower with yields up 3.2 basis points to 1.231%

Asian Stocks

  • Asia stocks finished little changed in overnight trading as regional markets took a breather after the 3-day fall following the news that the CFO of Huawei had been arrested by Canadian authorities at the direction of US officials 
  • The Nikkei 225 finished down --0.34%, the Hang Seng ended up +0.07%, the Hang Seng China Enterprise declined -0.27%, and the CSI 300 was +0.48%
  • Hong Kong IPOs will raise HK$100 billion less in CY2019 vs. CY2018 according to KPMG – fundraising reached HK$300 billion in CY2018 which was an 8-year high 
  • Reserve Bank of India head Urjit Patel announces he is stepping down from his post for personal reasons, coming as a surprise to local traders 
  • Former US ambassador to Singapore under President George W Bush, Frank Lavin, is encouraging US President Donald Trump to reject a “quick” deal with China and is encouraging him to push for “real” reform
  • Investor sentiment for Japanese stocks finished negative with the advance/decline ratio for the Nikkei 225 closing at 0.27x
  • 0 stocks in the Nikkei 225 hit 4-week highs while 109 stocks reached 4-week lows
  • 0 stocks in the Nikkei 225 closed overbought while 33 stocks closed oversold according to the 16-day RSI Measure
  • Investor sentiment for Hong Kong stocks finished negative with the advance/decline ratio for the Hang Seng closing at 0.85x
  • 0 stocks in the Hang Seng hit 4-week highs while 14 stocks reached 4-week lows
  • 0 stocks in the Hang Seng closed overbought while 2 stocks closed oversold according to the 16-day RSI Measure
  • Japan 2-Year Government Bonds are lower with yields up 0.5 basis points to -0.14%
  • Japan 10-Year Government Bonds are lower with yields up 0.7 basis points to 0.05%
  • JGBs 2s-10s Spread has widened 0.2 basis points to 0.19%
  • JPY¥ is currently down -0.221% against the USD$ to 113.08

 

*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 1187 3.71 0 8 -0.56% 1.87%
JPMorgan Chase & Co 393 4.71 -2 11 0.33% 3.47%
Microsoft Corp 377 4.14 0 30 -0.08% 4.38%
Morgan Stanley 339 4.43 2 4 -0.52% 3.02%
BlackRock Inc 326 7.14 -5 1 -1.99% -5.48%

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
Visa Inc 104 8.14 -1 3 0.02% 4.64%
BlackRock Inc 326 7.14 -5 1 -1.99% -5.48%
International Business Machines Corp 275 6 0 -1 0.0% 0.54%
Citigroup Inc 314 5.43 0 9 -0.0% 5.48%
Johnson & Johnson 78 5.29 0 13 -0.11% 1.98%

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 19.41 95.63% 19.11 98.02% 0.98 18.06% -2.3 28.57% -0.44 39.29%
QQQ 25.29 94.44% 24.16 98.41% 0.96 25.99% -5.51 21.43% -4.65 22.22%
IWM 24.58 98.02% 22.57 99.21% 0.92 7.74% -0.21 33.73% 0.24 33.73%
FEZ 21.36 95.63% 19.92 98.41% 0.93 17.66% 2.37 73.02% 2.48 78.17%
EEM 24.84 92.46% 23.86 98.41% 0.96 23.41% 0.88 64.29% -0.9 40.48%

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
VAIL RESORTS INC MTN Consumer Discretionary Hotels, Restaurants & Leisure 4.91% -17.45% 12.58%
NORTHROP GRUMMAN CORP NOC Industrials Aerospace & Defense 4.81% 3.91% -10.64%
BROADCOM INC AVGO Information Technology Semiconductors & Semiconductor Equipment 4.57% 0.77% -8.15%
FORTINET INC FTNT Information Technology Software 4.22% 1.16% 52.14%
DOLLAR GENERAL CORP DG Consumer Discretionary Multiline Retail 2.82% -4.94% 12.77%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
STERLING BANCORP STL Financials Banks -3.54% -11.52% -33.69%
SUNTRUST BANKS INC STI Financials Banks -2.44% -12.06% -12.04%
SYNOVUS FINANCIAL CORP SNV Financials Banks -2.11% -10.12% -32.98%
JEFFERIES FINANCIAL GRP INC JEF Financials Diversified Financial Services -2.02% -15.89% -34.27%
ZIONS BANCORPORATION ZION Financials Banks -1.97% -9.55% -11.7%

Source: S&P Capital IQ, StockDio

Top Short Winners and Losers

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Winners Ticker Sector Industry 1D Return 5D Return YTD
CARRIZO OIL & GAS INC CRZO Energy Oil, Gas & Consumable Fuels -8.39% -15.73% -45.4%
LAREDO PETROLEUM INC LPI Energy Oil, Gas & Consumable Fuels -7.99% -3.73% -96.77%
ROWAN COMPANIES PLC RDC Energy Energy Equipment & Services -7.15% -21.31% -36.85%
OASIS PETROLEUM INC OAS Energy Oil, Gas & Consumable Fuels -6.6% -10.16% -28.42%
CALIFORNIA RESOURCES CORP CRC Energy Oil, Gas & Consumable Fuels -6.14% -15.42% 2.62%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
BLOOM ENERGY CORP-REDH BE Industrials Electrical Equipment 7.87% 4.28% -37.57%
SPARK THERAPEUTICS INC ONCE Health Care Biotechnology 7.1% -1.6% -25.14%
IMMUNOMEDICS INC IMMU Health Care Biotechnology 6.98% -6.42% 16.84%
TANDEM DIABETES CARE INC TNDM Health Care Health Care Equipment & Supplies 4.92% -4.56% 262.83%
PUMA BIOTECHNOLOGY INC PBYI Health Care Biotechnology 4.06% 3.76% -134.54%

Source: S&P Capital IQ, StockDio

Cryptos

  • Cryptocurrencies continued to fall overnight as the price of Bitcoin (BTC) is down 4.15% in the last 24 hours to USD$3,416.26. Total cryptocurrency market capitalization now sits at just USD$108bn, its lowest level since August 2017. Among major cryptocurrencies, Bitcoin SV (BSV) is the worst performer, down 9.19% in the last 24 hours to USD$89.15. EOS (EOS) closely follows BSV, down 8.97% in the last 24 hours to USD$1.85. Ethereum Classic (ETC) is the only major cryptocurrency in the green, although ever so slightly, up 0.05% in the last 24 hours to USD$3.92. 
  • Japan’s government is considering plans to ease cryptocurrency taxes in an effort to revitalize the domestic cryptocurrency and blockchain industry. This week, Japanese Congressman Takeshi Fujimaki proposed four significant changes to taxation requirements pertaining to digital assets, which include: a reduction on the cryptocurrency gains tax from 55% to 20%; elimination of taxes on crypto-to-crypto payments; elimination of taxes on minisculecryptocurrency payments; and an adjustment that would allow cryptocurrency investors to carry forward losses across quarters and years, effectively until cryptocurrencies are ‘cashed’ out.  
  • Good Money, a US neo-banking platform, has closed its Series A investment round that generated USD$30mm led by cryptocurrency-focused merchant bank Galaxy Digital and the founder of EOS (EOS) Block.one. Good Money aims to provide a variety of banking service and certain financial instruments to US account holders while exploring innovative changes to traditional banking practices. “Modern banking is a primary driver of so many issues we as a society face – from economic inequality, institutional racism, environmental destruction to political corruption,” said Good Money founder Gunnar Lovelace. Specifically, Good Money eliminates ATM fees while offering each bank user equity in the company.  
  • South Korea’s representative body, the National Assembly, held its first official meeting with seven of the country’s largest cryptocurrency exchanges on Monday. The purpose of the meeting was to debate cryptocurrency regulation between stakeholders of South Korea’s cryptocurrency industry. Cryptocurrency exchanges Bithumb, CobitCoin, Coinone, Upbit, Gopax, Coinplug, and Hanbitco were among the attendees of the debate, which reportedly focused on Anti-Money Laundering (AML) customer protections and Know Your Customer (KYC) procedures. 

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
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