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Morning Brief

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Global stocks declining as worries about global growth plague investor sentiment

Dec 14, 2018

Market data as of 7am EST

 

US Stocks

  • US index futures are dropping to start the morning with front-month Dow Jones minis –0.92%, S&P 500 minis –0.93%, and Nasdaq 100 minis –1.04% 
  • According to analysis by Bank of America, US mutual funds have seen close to USD$2.72 billion in outflows since the start of the recent sell-off in the S&P 500 in October – the second biggest exit since this type of data started to be recorded 
  • The Russell 2000 inches towards a “formal” bear market after dropping 18% since reaching its August high
  • The VIX is moving up this morning and is currently at 21.86 after closing at 20.65 yesterday
  • Bank of America (BAC) December 14 OTM Calls, SPY December 14 OTM Puts, and Merck (MRK) December 21 and January 2019 OTM Calls are some of the most heavily traded options in the US pre-market
  • US 10-Year Treasury Bonds are higher with yields down -3.62 basis points to 2.8769%
  • The US Treasury 2s-10s Spread has narrowed 0.31 basis points to 0.15%
  • WTI Crude is currently up 2.8% to USD$52.58/bbl with the Brent-WTI spread down USD$-4.1 to USD$7.29/bbl
  • Gold is currently down -0.33% to USD$1237.93/oz
     

Stocks Trending in the News

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

  • Adobe Inc. (ADBE) reported sales guidance for the current quarter that pleased investors, although analysts are highlighting that M&A costs may cause short-term margin contraction. Adobe sees revenue for its current quarter, ending 2/28/2019, at USD$2.54bn while analysts’ consensus calls for USD$2.52bn. After Adobe’s guidance, Bernstein told investors, “Another strong Q,’ while pointing out, “slightly weaker,” margins due to the acquisition of Marketo, which, “should take some time to normalize.” Adobe is rated “Top Buy” in our US Large Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Instacart will no longer make deliveries for Amazon’s (AMZN) Whole Foods starting yesterday.  Instacart will not deliver any longer as Amazon uses its own delivery service.  The separation will take months to complete.  Amazon is slowly transitioning to its own delivery service as it no longer sees Instacart as the most efficient way to make the deliveries.  Amazon is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Apple (AAPL) will push through a software update to its iPhones in China in an effort to satisfy a local court injunction granted to Qualcomm (QCOM).  Apple said it was taking the action to assure its compliance with the court order there.  Apple’s update will address the Qualcomm complaints over patents.  Globally, Apple and Qualcomm are in a legal battle over the fees Apple pays Qualcomm pays for use of its chips.  Apple presently is not using Qualcomm chips.  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.  Qualcomm is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Costco (COST) reported earnings that topped the highest estimates.  Costco reported 1Q EPS of USD$1.73 while consensus was for USD$1.51-1.67.  Costco 1Q revenue of USD$35.07 billion came above USD$34.8 billion expected.  Total sales excluding fuel grew 7.5% in constant currency.
  • LVMH (ENXTPA: MC) is acquiring luxury hotel operator Belmond Ltd. (BEL) in a USD$2.6 billion deal.  The deal will push LVMH further into luxury services, with a chain where USD$2,000 per night rooms are common.  LVMH is offering USD$25 per share, a 42% premium over last night’s close.  LMH is looking to catch a portion of consumer’s spending on luxury services.  LVMH is rated “Attractive” in our European Large-Cap Global Top Stock Ideas.  Belmond is not rated in our Global Top Stock Ideas.
  • Merck & Co. (MRK) has agreed to acquire Antelliq Group for 2.1bn euros (USD$2.4bn) in an effort to bolster its animal-health business. As a part of the acquisition, Merck will assume the debt of the privately held manufacturer of animal-monitoring tools. Merck is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Monster Beverage (MNST) is being downgraded at UBS from neutral to sell. UBS also pulled back its price target for Monster to USD$48/share, which implies a 16% decrease from yesterday’s closing price. Monster Beverage maintains an average price target of USD$61.47/share among 19 analysts. Monster Beverage is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Staples Global Top Stock Ideas.
  • Sears Holdings (SHLD) only needed bankruptcy to boost sales-Sears saw same-store sales grow 4.3% in the last quarter amid liquidation sales at its stores.  Sears recently closed 28 Kmart and 73 Sears stores, over the last 9 months 100 Kmart and 138 Sears stores have been closed.  Sears’ largest shareholder ESL Investments has offered to buy 500 stores and keep them open.  Sears Holdings is not rated in our Global Top Stock Ideas.
  • Southwest Airlines (LUV) saw a human heart left on one of its planes in Seattle.  The heart was left on a Southwest plane by a courier who was delivering it to a tissue bank, its valves were being harvested for a donation.  Despite the delay, the heart arrived within time to be used by a recipient.  Southwest Airlines is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.
  • Starbucks Corporation’s (SBUX) CFO Patrick Grismer said that same-store sales growth in China could be as low as 1% over the long-term, a statement of concern for one of the coffee brewer’s most important markets. The 1% projected long-term same-store sales growth in China is much slower than the 3%-4% same-store sales growth observed by Starbucks in the US and the rest of the world. Additionally, Starbucks guided that it expects 6,000 total stores in China in 4 years.  Starbucks 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.
  • Tesla (TSLA) employees at the company’s solar-panel factory in Buffalo, New York are launching a campaign to unionize. Tesla thwarted similar efforts made by the United Auto Workers at its only car plant in Freemont, California. More than 300 solar-panel factory employees are involved in this campaign. 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.
  • XPO Logistics (XPO) has announced a USD$1 billion share buyback program to be funded with existing cash.  XPO Logistics dropped 32% yesterday after well-known hedge fund short-seller Spruce Point warned in a note of “dubious financials” at XPO Logistics.  XPO Logistics is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Industrials Global Top Stock Ideas.

 

 

European Stocks

  • European stocks are declining to start the morning as investors digest comment by European Central Bank (ECB) Head Mario Draghi about a slowdown in global growth and decelerating economic data in China 
  • The FTSE 100 is now trading at a 2-year low as the uncertainty about whether UK Prime Minister Theresa May can get support for her BREXIT proposal plagues investor sentiment
  • The Ifo-Institute, a leading German economic institute, projects lower growth of the German economy in 2019 with a projected GDP growth rate of 1.1%, the previous estimate was 1.9%
  • The Euro Stoxx 600 is currently down -0.89%, the FTSE 100 has declined -0.76%, the DAX has fallen -1%, and the CAC 40 is lower by -0.97%  
  • European auto stocks are dropping following a report showing a sharp drop in new car registrations in November  
  • Investor sentiment for European stocks is negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.18x    
  • Oil & Gas (+0.09%), Telecommunications (-0.45%), and Basic Resources (-1.7%) stocks are the top performers in the Euro Stoxx 600 today    
  • Automobiles & Parts (-1.28%), Food & Beverage (-0.26%), and Utilities (-0.63%) stocks are the worst performers in the Euro Stoxx 600 today    
  • 53 stocks in the Euro Stoxx 600 are at 4-week highs while 30 stocks are at 4-week lows    
  • 12 stocks in the Euro Stoxx 600 are overbought while 32 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 20.2 after closing at 19.18 yesterday
  • EUR€ is currently down -0.651% against the USD$ to 1.1287    
  • GBP£ is currently down -0.601% against the USD$ to 1.2567    
  • CHF is currently down -0.338% against the USD$ to 1.0027        
  • German 10-Year Bunds are higher with yields down -2.6 basis points to 0.259%    
  • UK 10-Year GILTs are higher with yields down -2.1 basis points to 1.268%    

Asian Stocks

  • Asia stocks finished negative in overnight trading, stopping the 2-day rally across the region as weaker than expected Chinese economic data, combined with yesterday’s comment by ECB Head Mario Darghi, fueled worries about slowing economic growth 
  • The Nikkei 225 finished down -2.02%, the Hang Seng ended down -1.62%, the Hang Seng China Enterprise declined -1.87%, and the CSI 300 was -1.67%
  • The drop in Japanese stocks earlier in the morning helped push the group down for the second straight week as concerns about a slowdown in global growth and US-China trade tensions weighs on sentiment for Japanese export-sensitive stocks 
  • Chinese retail sales grew +8.1% in November vs. expectations for +8.8% and +8.6% in October – November retail sales were the worst result since 2003 
  • Chinese Industrial Production increased +5.4% in November vs. expectations for +5.9% and +5.9% in October -- the November result missed ALL 38 estimates surveyed to get November’s market forecast
  • Investor sentiment for Japanese stocks finished negative with the advance/decline ratio for the Nikkei 225 closing at 0.07x
  • 18 stocks in the Nikkei 225 hit 4-week highs while 7 stocks reached 4-week lows
  • 1 stock in the Nikkei 225 closed overbought while 7 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 0.22x
  • 8 stocks in the Hang Seng hit 4-week highs while 1 stock 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 higher with yields down -1 basis points to -0.154%
  • Japan 10-Year Government Bonds are higher with yields down -2.2 basis points to 0.035%
  • JGBs 2s-10s Spread has narrowed 1.2 basis points to 0.19%
  • China RMB 2-Year Government Bonds are lower with yields up 1.5 basis points to 2.724%
  • China RMB 10-Year Government Bonds are lower with yields up 2.1 basis points to 3.375%
  • China Government RMB 2s-10s Spread has widened 0.6 basis points to 0.65%
  • JPY¥ is currently little changed against the USD$ at 113.59

 

*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 158 0.57 0 8 -0.47% 0.63%
International Business Machines Corp 124 2.29 0 -1 0.1% 0.51%
Apple Inc 99 0.86 -19 -17 -1.74% -0.58%
Microsoft Corp 89 2.14 0 30 -0.12% 4.29%
Morgan Stanley 80 0.86 2 4 -0.69% 2.85%

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
NextEra Energy Inc 5 5.14 -1 -3 0.54% 3.02%
Mastercard Inc 14 4.14 -1 17 0.0% 4.27%
Costco Wholesale Corp 23 4 6 9 2.86% 5.93%
ConocoPhillips 32 3.71 -2 9 -14.71% -0.24%
Walt Disney Co/The 21 3.14 -17 -15 -1.07% -3.17%

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 17.11 86.31% 18.44 95.63% 1.08 45.24% -3.77 19.44% -1.09 37.7%
QQQ 23.75 84.92% 23.5 94.05% 0.99 37.7% -5.13 22.22% -5.22 21.03%
IWM 22.47 94.05% 21.74 97.82% 0.97 24.8% -1.79 22.22% -0.71 26.98%
FEZ 18.52 83.73% 19.13 94.05% 1.03 53.17% -0.36 42.46% 1.23 68.45%
EEM 21.69 75.0% 22.86 94.05% 1.05 69.84% -1.38 39.68% -2.06 23.81%

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
EXPRESS SCRIPTS HOLDING CO ESRX Health Care Health Care Providers & Services 2.06% 0.99% 27.41%
CHURCH & DWIGHT INC CHD Consumer Staples Household Products 1.96% 3.62% 35.25%
CONSOLIDATED EDISON INC ED Utilities Multi-Utilities 1.75% 2.78% 4.1%
REPUBLIC SERVICES INC RSG Industrials Commercial Services & Supplies 1.58% -0.88% 13.27%
CENTERPOINT ENERGY INC CNP Utilities Multi-Utilities 1.55% 4.07% 8.72%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
EAGLE MATERIALS INC EXP Materials Construction Materials -5.72% -10.42% -64.46%
FIRSTCASH INC FCFS Financials Consumer Finance -4.83% -5.24% 17.07%
LIGAND PHARMACEUTICAL INC LGND Health Care Biotechnology -4.25% -7.99% 2.25%
SYNOVUS FINANCIAL CORP SNV Financials Banks -3.56% -4.83% -36.04%
M & T BANK CORP MTB Financials Banks -3.05% -7.48% -11.42%

Source: S&P Capital IQ, StockDio

Top Short Winners and Losers

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Winners Ticker Sector Industry 1D Return 5D Return YTD
PORTOLA PHARMACEUTICALS INC PTLA Health Care Biotechnology -12.11% -7.17% -93.67%
PENNEY (J C) CO JCP Consumer Discretionary Multiline Retail -8.31% -9.03% -101.37%
REGENXBIO INC RGNX Health Care Biotechnology -8.29% -19.91% 28.11%
ESPERION THERAPEUTICS INC ESPR Health Care Biotechnology -7.87% -6.02% -26.64%
ROWAN COMPANIES PLC RDC Energy Energy Equipment & Services -7.24% -19.67% -45.61%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
GENERAL ELECTRIC CO GE Industrials Industrial Conglomerates 7.05% -2.06% -88.87%
FIRST SOLAR INC FSLR Information Technology Semiconductors & Semiconductor Equipment 3.82% 3.57% -44.13%
MACERICH CO MAC Real Estate Equity Real Estate Investment Trusts (REITs) 3.48% -4.29% -25.91%
AVALARA INC AVLR Information Technology Software 3.44% 2.57% -35.98%
PLAINS ALL AMER PIPELNE  -LP PAA Energy Oil, Gas & Consumable Fuels 2.61% 5.34% 14.23%

Source: S&P Capital IQ, StockDio

Cryptos

  • Cryptocurrencies are broadly in the red, though off lows of the 24-hour period, with the price of Bitcoin (BTC) down 3.41% to USD$3,312.96. Among major cryptocurrencies, Waves (WAVES) and Maker (MKR) are the only positive coins, up 15.45% and 1.27% in the last 24 hours to USD$2.44 and USD$339.73, respectively. Bitcoin Cash (BCH) extended losses overnight and is trading down 13.59% in the last 24 hours to USD$84.96. 
  • LinkedIn’s, “2018 U.S. Emerging Jobs,” report released on Thursday ranks the role of blockchain developer as the fastest growing job in the United States. The report by LinkedIn indicates that blockchain developer jobs have increased 33-fold in the past 12 months alone. San Francisco, New York City, and Atlanta are among the cities with the highest demand for blockchain developer jobs.  
  • Tom Lee, co-founder of Fundstrat Global Advisors and a notable cryptocurrency pundit, believes that the current fair value of Bitcoin (BTC) is between USD$13,800 and USD$14,800, according to a note published on Thursday. Lee arrived at this valuation by taking into account the number of active wallet addresses, usage per account, and other supply and demand metrics. Additionally, Lee forecasted that the fair value of BTC will reach USD$150,000/coin once BTC wallets account for 7% of Visa’s 4.5bn account holders.  
  • Warren Davidson, an Ohio Congressman and notable advocate of blockchain and digital assets, is floating blockchain technology as a solution to fund US President Donald Trump’s prospective US-Mexico border wall. While interviewing with NPR, Congressman Davidson suggested, “the American people, or whomever should choose to donate,” could pay for the border wall, adding, “you could do it with sort of like a crowdfunding site or you could do a blockchain and you could have WallCoins.” 

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
SCUD Group Limited SEHK:1399 12/14/2018 Estimated Earnings Release Date China All-Cap: F
China Merchants Port Holdings Company Limited SEHK:144 12/14/2018 Estimated Earnings Release Date China All-Cap: C
Hingtex Holdings Limited SEHK:1968 12/14/2018 Estimated Earnings Release Date China All-Cap: D
China New Higher Education Group Limited SEHK:2001 12/14/2018 Estimated Earnings Release Date China All-Cap: D
E-House (China) Enterprise Holdings Limited SEHK:2048 12/14/2018 Estimated Earnings Release Date China All-Cap: C
China Minsheng Financial Holding Corporation Limited SEHK:245 12/14/2018 Estimated Earnings Release Date China All-Cap: F
China Xinhua Education Group Limited SEHK:2779 12/14/2018 Estimated Earnings Release Date China All-Cap: D
Tracker Fund Of Hong Kong SEHK:2800 12/14/2018 Estimated Earnings Release Date China All-Cap: D
China Shineway Pharmaceutical Group Limited SEHK:2877 12/14/2018 Estimated Earnings Release Date China All-Cap: C
China High Speed Transmission Equipment Group Co., Ltd. SEHK:658 12/14/2018 Estimated Earnings Release Date China All-Cap: D
EPI (Holdings) Limited SEHK:689 12/14/2018 Estimated Earnings Release Date China All-Cap: D
Tianneng Power International Limited SEHK:819 12/14/2018 Estimated Earnings Release Date China All-Cap: D
NetDragon Websoft Holdings Limited SEHK:777 12/16/2018 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
Grand Baoxin Auto Group Limited SEHK:1293 12/17/2018 Estimated Earnings Release Date China All-Cap: 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
FactSet Research Systems Inc. FDS 12/18/2018 Earnings Release Date US Large-Cap: A
Darden Restaurants, Inc. DRI 12/18/2018 Earnings Release Date US Large-Cap: A, US Consumer Discretionary: A
Micron Technology, Inc. MU 12/18/2018 Earnings Release Date US Large-Cap: C, US Information Technology: B
Jabil Inc. JBL 12/18/2018 Earnings Release Date US Large-Cap: C, US Information Technology: C
FedEx Corporation FDX 12/18/2018 Earnings Release Date US Large-Cap: C, US Industrials: B
Renren Inc. RENN 12/18/2018 Estimated Earnings Release Date China All-Cap: F
Carnival Corporation CCL 12/18/2018 Estimated Earnings Release Date US Large-Cap: B, US Consumer Discretionary: A
General Mills, Inc. GIS 12/19/2018 Earnings Release Date US Large-Cap: A, US Consumer Staples: A

Source: S&P Capital IQ