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Morning Brief

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Global stocks declining to start the week as US Government shutdown looms

Dec 17, 2018

 

 

Market data as of 7am EST

 

US Stocks

  • US stocks index futures are declining, parring earlier AM gains as worries about a shutdown of the US government are causing jitters among US traders: front-month Dow Jones minis –0.11%m S&P500 minis –0.07% and Nasdaq 100 minis –0.04% 
  • According to Bloomberg, the NTM P/E for the S&P500 dropped nearly 4 pts so far this year -- the S&P500 NTM P/E has only contracted a greater amount 6 times since this data has been recorded with a bear market in 5 of those 6 years 
  • SPDR S&P500 ETF (SPY) saw positive fund flows of USD$1.46 billion last week, an increase of +0.6% in total fund assets 
  • Emerging markets stocks ETFs experienced net fund flows of +USD$948.1 million – the 9th straight week of positive fund flows
  • The VIX is little changed this morning and is currently at 22.36 after closing at 21.63 yesterday
  • XOP February 2019 OTM Puts, December 17 & December 21 OTM Calls & Puts, EEM December 21 OTM Puts and QQQ December 21 OTM Puts are the most actively traded options contracts in the US pre-market
  • US 10-Year Treasury Bonds are higher with yields down -1.09 basis points to 2.8786%
  • The US Treasury 2s-5s Spread has narrowed 0.16 basis points to 0%
  • The US Treasury 2s-10s Spread has narrowed 0.06 basis points to 0.16%
  • WTI Crude is currently up 1.25% to USD$51.81/bbl with the Brent-WTI spread up USD$1.17 to USD$9.81/bbl
  • Gold is currently little changed 0.06% to USD$1239.81/oz
  • Global oil prices are climbing following a report that shows US domestic oil rigs falling to the lowest level in 8 weeks while traders continue to digest the announcement that OPEC + Russia will cut production targets in CY2019

Stocks Trending in the News

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

  • Alphabet’s (GOOGL) Google announced a USD$1 billion expansion in New York City.  Google will establish a new NYC campus called Google Hudson Square which will be in addition to its Google Chelsea campus.  Google will double the number of employees in NYC post-expansion.  Alphabet is rated “Neutral” in both our US Large-Cap and US Information Technology Global Top Stock Ideas.   
  • Amazon.com Inc. (AMZN) is stressing to investors that strikes at two of its German logistics sites will not impact holiday deliveries in Germany. Roughly 350 Amazon employees are striking for better pay and working conditions. Germany is Amazon’s second-largest market outside of the US. Amazon is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Asos Plc (AIM: ASC), the e-commerce retailer, has said the holiday shopping season has gotten off to a horrible start for the company.  Asos said its Christmas season got off to poorly with a “significant deterioration” in November.  Asos cut its full-year forecast as it has been discounting in-stock merchandise to lower inventory.  Asos is rated “Neutral” in our United Kingdom Global Top Stock Ideas.
  • BHP Group (ASX: BHP) declared a special dividend of USD$1.02 per shares to be pain January 30th for holders January 11th.  BHP’ special dividend represents the USD$5.2 billion residual balance after selling onshore US assets and buying back shares.  After the dividend payout BHP will have returned USD$21 billion over the last 2 years.  BHP Group is rated “Attractive” in our Australia Large-Cap Global Top Stock Ideas.
  • Bristol-Myers Squibb Co. (BMY) is reportedly nearing a deal to sell its over-the-counter unit to Taisho Pharmaceutical Holdings Co. (TSE: 4581), according to people familiar with the matter. The deal is reportedly valued at about USD$1.6bn. Bristol-Myers is rated “Neutral” in our US Large-Cap Global Top Stock Ideas. Taisho Pharmaceutical Holdings is not rated in our Global Top Stock Ideas.
  • Embraer’s (ERJ) approved its Commercial Aviation JV with Boeing (BA), it announced.  Embraer said the value attributed by the parties to the JV is USD$5.2 billion.  The new JV will hold 100% of the commercial aviation business.  The deal still needs to be approved by the Brazilian government.  Embraer is rated “Neutral” in our Brazil All-Cap Global Top Stock Ideas.  Boeing is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Goldman Sachs (GS) is facing its first charges in Malaysia in the 1MDB scandal.  Authorities are alleging that Goldman Sachs misled investors when it sold 1MDB bonds since it knew the proceeds would be misappropriated.  Authorities are seeking fines well above the USD$2.7 billion of misused funds and USD$600mn is fees generated on the transaction.  Goldman Sachs blames the scandal on “rogue employees”.  Goldman Sachs is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Hennes & Mauritz (OM: HM B) reported sales figures that as it reduces its large inventory.  H&M said sales rose 12% to 56.4 billion kroner (USD$6.2 billion) while consensus was for 56.1 billion kronor.  H&M did not report profitability and analysts are questioning how much discounting H&M had to do in order to move the inventory.  H&M will report full results on January 31st.   Hennes & Mauritz is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • Hitachi Ltd. (TSE: 6501) will acquire ABB Ltd.’s (SWX: ABBN) power grid division for USD$6.4bn in what is the Japanese conglomerate’s largest deal ever. Hitachi will acquire about 80.1% of the ABB’s power grid business, which maintains a total enterprise value of USD$11bn including net debt. The acquisition comes amid Hitachi’s shift from nuclear plants to the higher-growth market for electricity networks. Hitachi is rated “Top Buy” in our Japan Large-Cap Global Top Stock Ideas. ABB is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • JD.com (JD) coverage was reinstated today at GF Securities will an accumulate rating.  JD.com’s price target was set at USD$27.75 implying 25% upside to its last closing price.  JD.com is rated “Top Short” in our China All-Cap Global Top Stock Ideas.
  • Johnson & Johnson (JNJ) shares gave up roughly USD$40bn in market value last week after Reuters reported that the consumer brands group knew its baby powder could contain traces of asbestos for at least 40 years. Reuters cites documents from a Missouri court case that awarded USD$4.7bn to 22 women who developed ovarian cancer from Johnson & Johnson products. Johnson & Johnson has since called the story, “an absurd conspiracy theory.” Johnson & Johnson is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Lululemon Athletica (LULU) was upgraded today at Stifel to buy from hold.  Lululemon Athletica’s price target of USD$151 was maintained.  Stifel expects Lululemon Athletica double-digit sales growth to continue and sees upside to consensus estimates for 2019.  Lululemon Athletica’s revenue targets are “low hurdles”, according to the report.  Lululemon Athletica is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Netflix Inc. (NFLX) shares still have strong upside potential, according to MKM Partners. In a note to clients, MKM Partners said that Netflix’s fundamentals and earnings are, “as strong as ever,” while reaffirming its buy rating and USD$415/share price target. As of Friday’s close, Netflix shares are down more than 30% since October. Netflix is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • WellCare Health Plans (WCG) reports guidance for FY2019 and the remainder of FY2018 that slightly misses analysts’ consensus. WellCare forecasts adjusted EPS of between USD$13.15/share and USD$13.40/share, the midpoint of which misses analysts’ consensus of USD$13.36/share. WellCare also reaffirmed adjusted EPS guidance of between USD$10.90/share and USD$11.00/share for FY2018 while analysts’ consensus is USD$11.00/share. WellCare is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.

 

European Stocks

  • European stocks are declining to start the week and trading at session lows as a profit warning from Asos Plc (AIM: ASC) is spooking retail stocks
  • The Euro Stoxx 600 is currently down -0.48%, the FTSE 100 has declined -0.34%, the DAX has fallen -0.28%, and the CAC 40 is lower by -0.48%
  • Investor sentiment for European stocks is negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.44x
  • Oil & Gas (-0.4%), Telecommunications (+0.58%), and Basic Resources (+0.87%) stocks are the top performers in the Euro Stoxx 600 today
  • Automobiles & Parts (+0.31%), Food & Beverage (-0.45%), and Utilities (+0.31%) stocks are the worst performers in the Euro Stoxx 600 today
  • 25 stocks in the Euro Stoxx 600 are at 4-week highs while 88 stocks are at 4-week lows
  • 13 stocks in the Euro Stoxx 600 are overbought while 34 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 19.41 after closing at 19.16 yesterday
  • EUR€ is currently up +0.292% against the USD$ to 1.1339
  • GBP£ is currently up +0.326% against the USD$ to 1.2624
  • CHF is currently up +0.329% against the USD$ to 1.0051
  • German 10-Year Bunds are higher with yields down -0.4 basis points to 0.248%
  • UK 10-Year GILTs are lower with yields up 1.9 basis points to 1.259%

Asian Stocks

  • Asia stocks finished mixed in overnight trading as traders await more clarity on US-China trade negotiations
  • The Nikkei 225 finished up +0.62%, the Hang Seng ended down -0.03%, the Hang Seng China Enterprise declined -0.07%, and the CSI 300 was -0.15%
  • Investor sentiment for Japanese stocks finished neutral with the advance/decline ratio for the Nikkei 225 closing at 1.12x
  • 8 stocks in the Nikkei 225 hit 4-week highs while 31 stocks reached 4-week lows
  • 1 stock in the Nikkei 225 closed overbought while 13 stocks closed oversold according to the 16-day RSI Measure
  • Investor sentiment for Hong Kong stocks finished neutral with the advance/decline ratio for the Hang Seng closing at 1.17x
  • 1 stock in the Hang Seng hit 4-week highs while 2 stocks reached 4-week lows
  • 0 stocks in the Hang Seng closed overbought while 3 stocks closed oversold according to the 16-day RSI Measure
  • Japan 2-Year Government Bonds are lower with yields up 0.3 basis points to -0.151%
  • Japan 10-Year Government Bonds are lower with yields up 0.6 basis points to 0.041%
  • JGBs 2s-10s Spread has widened 0.3 basis points to 0.19%
  • JPY¥ is currently little changed against the USD$ at 113.29
     

 

*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
Apple Inc 94 0.43 -19 -17 -1.27% -0.47%
Alphabet Inc 92 0.57 0 8 -0.47% -0.51%
International Business Machines Corp 88 1.29 0 -1 -0.09% 0.33%
BlackRock Inc 83 1.71 -5 1 -1.88% -5.43%
Microsoft Corp 72 1 0 30 -0.12% 4.29%

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
Mastercard Inc 17 5.14 -1 17 -0.05% 4.28%
Costco Wholesale Corp 29 4 6 9 1.51% 4.64%
Walt Disney Co/The 19 3.43 -17 -15 -1.13% -3.22%
Caterpillar Inc 7 3.43 0 4 0.21% 2.85%
Home Depot Inc/The 9 3.29 28 29 0.09% 2.52%

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 18.93 94.84% 19.78 99.21% 1.04 35.12% -2.72 25.0% -0.04 41.67%
QQQ 25.91 95.24% 25.13 99.6% 0.97 30.75% -4.07 26.19% -3.96 24.6%
IWM 24.05 97.62% 22.68 99.21% 0.94 14.88% -0.55 31.75% 0.09 34.72%
FEZ 18.7 85.32% 19.09 93.65% 1.02 49.4% -0.67 40.08% 1.04 66.67%
EEM 21.79 75.4% 22.86 93.85% 1.05 69.64% -1.77 32.74% -2.03 24.6%

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 1.47% 0.58% 8.25%
BERRY GLOBAL GROUP INC BERY Materials Containers & Packaging 1.4% 0.39% -20.81%
VULCAN MATERIALS CO VMC Materials Construction Materials 0.9% -1.71% -27.06%
SUN COMMUNITIES INC SUI Real Estate Equity Real Estate Investment Trusts (REITs) 0.63% -0.76% 18.1%
SERVICEMASTER GLOBAL HLDGS SERV Consumer Discretionary Diversified Consumer Services 0.42% -7.06% 52.46%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
ADOBE SYSTEMS INC ADBE Information Technology Software -7.57% -3.42% 25.8%
WALGREENS BOOTS ALLIANCE INC WBA Consumer Staples Food & Staples Retailing -4.45% -3.06% 7.28%
JEFFERIES FINANCIAL GRP INC JEF Financials Diversified Financial Services -4.33% -7.53% -39.79%
NORFOLK SOUTHERN CORP NSC Industrials Road & Rail -4.31% -3.97% 4.56%
HUMANA INC HUM Health Care Health Care Providers & Services -4.11% -2.0% 18.06%

Source: S&P Capital IQ, StockDio

Top Short Winners and Losers

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Winners Ticker Sector Industry 1D Return 5D Return YTD
GULFPORT ENERGY CORP GPOR Energy Oil, Gas & Consumable Fuels -11.02% -8.27% -43.53%
SM ENERGY CO SM Energy Oil, Gas & Consumable Fuels -10.45% -16.21% -32.69%
CHESAPEAKE ENERGY CORP CHK Energy Oil, Gas & Consumable Fuels -10.19% -15.48% -56.51%
SOUTHWESTERN ENERGY CO SWN Energy Oil, Gas & Consumable Fuels -8.81% -14.43% -44.16%
CARRIZO OIL & GAS INC CRZO Energy Oil, Gas & Consumable Fuels -11.1% -23.9% -60.9%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
AVALARA INC AVLR Information Technology Software 4.35% 7.52% -31.63%
FITBIT INC FIT Information Technology Electronic Equipment, Instruments & Components 2.27% -1.62% -20.42%
SPARK THERAPEUTICS INC ONCE Health Care Biotechnology 2.04% 3.74% -28.5%
PIVOTAL SOFTWARE INC PVTL Information Technology Software 1.92% -2.05% 10.03%
MADRIGAL PHARMACEUTICALS INC MDGL Health Care Biotechnology 1.76% -2.51% 12.36%

Source: S&P Capital IQ, StockDio

Cryptos

  • Cryptocurrency prices slightly recovered this weekend with the price of Bitcoin (BTC) up 1.90% since Friday to USD$3,289.91. Litecoin (LTC) and EOS (EOS) observed large gains over the weekend, up 20.30% and 10.77% since Friday to USD$27.62 and USD$1.98, respectively. Despite broad market gains, Ethereum Classic (ETC) is down 0.30% on the weekend to USD$3.68. Total cryptocurrency market capitalization now sits at USD$107.6bn after nearing a dip below USD$100bn on Friday. 
  • Coinbase, a major US-based cryptocurrency exchange, is partnering with PayPal to offer users fee-free cash withdrawals to the popular online payment system, as per an official announcement. As of Friday, US users of Coinbase will be able to withdraw cash balances to PayPal free of charge while the same service will be launched for other countries later in 2019. After initially integrating PayPal with its service in 2016, Coinbase was forced to terminate the integration due to technical difficulties in March 2018.  
  • A report by Russian-based cybersecurity firm Kaspersky Labs finds that total reported cryptojacking cases have increased by 400% so far in 2018. More than 13mm cryptojacking cases have occurred in 2018, up from last year’s total of just 3.5mm. The report details that cryptojacking attacks spiked in the Middle East and Africa this year while highlighting Monero (XMR) as the most frequently targeted cryptocurrency.  
  • The Hong Kong Stock Exchange (HKEX) is allegedly hesitant to approve the initial public offering (IPO) applications of Bitmain, a Chinese bitcoin (BTC) mining equipment manufacturing giant. According to an anonymous person who is closely involved in talks, “The exchange is very hesitant to approve these bitcoin mining companies because the industry is so volatile. There’s a real risk that they could just not exist anymore in a year or two.” The anonymous individual added that, “The HKEX doesn’t want to be the first exchange in the world to approve this and have one die on them.”

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
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