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Morning Brief

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Global stocks declining as worries about US government shutdown spook traders

Dec 21, 2018

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Market data as of 7am EST

 

US Stocks

  • The global stock sell-off continues with most Asian markets as well as European markets taking profits overnight, following the weakness in the US yesterday
  • US futures are indicating a lower opening for US stocks with front-month Dow Jones minis –0.28%, S&P 500 minis –0.38% and Nasdaq 100 minis –0.48%
  • Chinese monetary authorities confirmed today that more fiscal and monetary stimulus will be coming in 2019; China will use the same limited, targeted stimulus as was done in 2018 
  • Jonathan Krinsky, the chief market technician at Baycrest Partners, suggests the S&P 500 may be reaching a bottom after the number of stocks in the S&P 500 above their 200-day moving average fell below 25% -- this is the first time since February 2016 that this happened and have historically been followed by a rally of +4.3% over the next 3-months (going back to 1990)
  • According, to Lipper data, US-focus mutual funds have seen outflows close to USD$81 billion for the two weeks ending December 19 – if the current trends hold, this would be the largest monthly outflow since 1992
  • President Trump is not budging in the budget showdown, saying he will not sign any funding bill that does not include funding for a border wall; a spending bill must be signed by midnight today to avoid a US government shutdown
  • Volume across European markets' volume is averaging ~70% above average today
  • The VIX is little changed this morning and is currently at 28.37 after closing at 28.38 yesterday
  • US 10-Year Treasury Bonds are higher with yields down -1.27 basis points to 2.7938%
  • The US Treasury 2s-10s Spread has narrowed 0.4 basis points to 0.13%
  • WTI Crude is currently down -3.33% to USD$45.63/bbl with the Brent-WTI spread up USD$0.38 to USD$6.76/bbl
  • Gold is currently little changed -0.03% to USD$1259.54/oz
  • Bloomberg commodity strategists suggest commodities are set to outperform stocks and the US Dollar in CY2019 – their analysis is based on a mean-reversion model and that global markets are currently experiencing peak strength for the US dollar
     

Stocks Trending in the News

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

  • Agenus (AGEN) and Gilead (GILD) announced they will form a partnership to work on immune-oncology therapies.  Agenus and Gilead said they will work together on up to 5 novel therapies, focused on the development and commercialization of them.  Agenus will receive USD$150mn when the deal closes and there is the potential for up to USD$1.7 billion in future fees.  Agenus is rated “Top Short” in our US SMID-Cap Global Top Stock Ideas.  Gilead is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Boeing (BA) won an order from Saudi Arabian Airlines’ low-cost carrier Flyadeal.  Flyadeal will acquire 50 narrow-body jets with a value of up to USD$5.9 billion.  Flyadeal will acquire 30 737 MAX with options to acquire 20 more.  Boeing is rated “Attractive” in our US Large-cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.
  • Bombardier Transportation (TSX: BBD.B) has entered into a contract for rolling stock with an undisclosed customer in Europe. The global mobility solutions provider announced today that the total order is valued at 437mm euros (USD$500mm). Bombardier is rated “Neutral” in our Canada All-Cap Global Top Stock Ideas.  
  • Campbell Soup (CPB) has names Mark Clouse as CEO effective January 22nd.  Mr. Clouse was previously CEO of Pinnacle Foods (PF) until it was acquired recently.  He has decades of experience in packaged foods and the chairman of the board said, “We are confident Mark is the right person…”.  Campbell Soup is rated “Neutral” in our US Large-cap Global Top Stock Ideas and “Neutral” in our US Consumer Staples Global Top Stock Ideas.
  • Danske Bank (CPSE: DANSKE) cut its 2018 earnings forecast, blaming the cut on the recent market slump.  Danske sees 2018 profit coming at 15 billion kroner (USD$2.3 billion), down from 16-17 billion kroner.  Danske said its revised guidance “remains subject to uncertainty).  Danske Bank is rated “Top Short” in our Global Top Stock Ideas.
  • Freeport-McMoRan (FCX) completed a deal with Indonesia giving the Indonesian government’s aluminum company majority ownership of the giant Grasberg copper and gold mine.  Indonesia will own 51.2% of the mine will Freeport’s local unit will hold the balance.  Freeport-McMoRan is rated “Attractive” in our US Large-cap Global Top Stock Ideas.
  • General Electric (GE) is being upgraded Vertical Research analyst Jeffrey Sprague, who has been ranked as the top analyst in the Institutional Investor poll on several occasions. Sprague upgraded General Electric to a buy rating while raising his price target from USD$10/share to USD$11/share. This is the first time Sprague has issued a buy rating for General Electric since April 2008. General Electric is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Industrials Global Top Stock Ideas.
  • The US Federal Trading Commission is seeking public comment on applications submitted by Linde AG (DB: LNA) and Praxair Inc. to divest certain facilities to enable their prospective USD$80bn merger. The public comment period will extend through January 21st. If approved, the merger would create the world’s largest industrial gas supplier. Linde AG is rated “Attractive” European SMID-Cap Global Top Stock Ideas.  
  • Nike (NKE) reported fiscal 2Q earnings that handily beat expectations.  Nike 2Q EPS came at 52 cents while average consensus was for 46 cents.  Nike 2Q revenue came at USD$9.37 billion while consensus was USD$9.17 billion.  Revenue is China came at USD$1.54 billion, while consensus was for USD$1.43 billion.    Nike is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Qualcomm (QCOM) has won an injunction against Apple’s (AAPL) sales of older iPhones in Germany, very similar to that it was awarded in China.  Qualcomm’s press release says the German court granted the injunction because Apple is infringing on its intellectual property for power savings in smartphones.  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.
  • Tencent Holdings (TCEHY, SEHK: 700) shares rose on the news that China has restarted the new video game approval process.  Sina reports that China is working to issue licenses for those games that have already been approved, without saying which games those are.  Tencent is rated “Attractive” in our China All-Cap Global Top Stock Ideas.
  • Zynga Inc. (ZNGA) will pay USD$560mm for an 80% stake in mobile games maker Sall Giant Games. Zynga will fund the purchase through USD$300mm of cash and USD$230mm of new common stock. Small Giant Games launched mobile game Empires & Puzzles 18-months ago and it has been the third-highest grossing game in the Google Play Store since. Zynga is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Information Technology Global Top Stock Ideas.

 

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European Stocks

  • The Euro Stoxx 600 is currently down -0.51%, the FTSE 100 has declined -0.39%, the DAX has fallen -0.29%, and the CAC 40 is lower by -0.59%
  • Investor sentiment for European stocks is negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.55x
  • Oil & Gas (-0.81%), Telecommunications (-1.4%), and Basic Resources (+0.82%) stocks are the top performers in the Euro Stoxx 600 today
  • Automobiles & Parts (+0.56%), Food & Beverage (-0.53%), and Utilities (-0.57%) stocks are the worst performers in the Euro Stoxx 600 today
  • 9 stocks in the Euro Stoxx 600 are at 4-week highs while 248 stocks are at 4-week lows
  • 5 stocks in the Euro Stoxx 600 are overbought while 94 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 21.64 after closing at 20.73 yesterday
  • EUR€ is currently down -0.201% against the USD$ to 1.1423
  • GBP£ is currently little changed against the USD$ at 1.2661
  • CHF is currently down -0.158% against the USD$ to 1.0105
  • German 10-Year Bunds are lower with yields up 1.9 basis points to 0.247%
  • UK 10-Year GILTs are lower with yields up 4.3 basis points to 1.309%
     

Asian Stocks

  • The Nikkei 225 finished down --1.11%, the Hang Seng ended up +0.51%, the Hang Seng China Enterprise up +0.1%, and the CSI 300 was -1.24%
  • Investor sentiment for Japanese stocks finished negative with the advance/decline ratio for the Nikkei 225 closing at 0.12x
  • 1 stock in the Nikkei 225 hit 4-week highs while 168 stocks reached 4-week lows
  • 0 stocks in the Nikkei 225 closed overbought while 62 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 0.67x
  • 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 5 stocks closed oversold according to the 16-day RSI Measure
  • Japan 2-Year Government Bonds are lower with yields up 0.7 basis points to -0.138%
  • Japan 10-Year Government Bonds are lower with yields up 2 basis points to 0.047%
  • JGBs 2s-10s Spread has widened 1.3 basis points to 0.19%
  • JPY¥ is currently little changed against the USD$ at 111.2

 

*Data in Price Return and Updated Real-Time (with a delay), Source: StockDio

We Crunch the Numbers, You Make the Trade.We Crunch the Numbers, You Make the Trade.

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
International Business Machines Corp 117 1.71 0 -1 0.25% 0.66%
Johnson & Johnson 105 2.71 -2 12 -0.11% 1.69%
BlackRock Inc 98 1.71 -6 1 -2.09% -5.63%
Microsoft Corp 87 1 -1 30 -0.12% 4.52%
Goldman Sachs Group Inc/The 78 1 -7 18 -2.57% 0.76%

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 22 4.71 2 19 -0.05% 4.25%
Biogen Inc 2 4.29 0 19 -0.1% 3.05%
Target Corp 5 3.29 -8 -2 -0.72% 0.49%
UnitedHealth Group Inc 7 2.86 0 21 0.4% 5.17%
Johnson & Johnson 105 2.71 -2 12 -0.11% 1.69%

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 23.84 99.21% 22.28 100.0% 0.93 5.56% 2.23 76.59% 1.89 57.14%
QQQ 29.97 99.6% 28.01 100.0% 0.93 19.44% 0.82 55.56% -1.71 36.9%
IWM 27.84 99.6% 25.82 100.0% 0.93 11.31% 3.13 77.38% 2.54 63.1%
FEZ 22.05 98.02% 20.64 98.81% 0.94 22.22% 3.79 86.9% 3.19 84.52%
EEM 23.78 84.13% 24.35 98.41% 1.02 52.58% 2.09 75.4% -0.64 45.63%

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

Quantitatively-Derived Options Trades: Transparent and Easily ExecutableQuantitatively-Derived Options Trades: Transparent and Easily Executable

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
BLACKBAUD INC BLKB Information Technology Software 2.43% -6.9% -41.93%
LIGAND PHARMACEUTICAL INC LGND Health Care Biotechnology 2.35% -4.2% -1.95%
SYNOVUS FINANCIAL CORP SNV Financials Banks 1.74% -4.99% -41.05%
PPL CORP PPL Utilities Electric Utilities 1.65% -7.16% -0.69%
TYSON FOODS INC  -CL A TSN Consumer Staples Food Products 1.26% -5.01% -38.69%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
NEXSTAR MEDIA GROUP NXST Consumer Discretionary Media -8.08% -10.11% 2.67%
WALGREENS BOOTS ALLIANCE INC WBA Consumer Staples Food & Staples Retailing -5.15% -16.77% -5.04%
EPAM SYSTEMS INC EPAM Information Technology IT Services -4.93% -12.42% 0.86%
VAIL RESORTS INC MTN Consumer Discretionary Hotels, Restaurants & Leisure -4.7% -3.93% 2.85%
HILL-ROM HOLDINGS INC HRC Health Care Health Care Equipment & Supplies -3.92% -8.86% 3.28%

Source: S&P Capital IQ, StockDio

Top Short Winners and Losers

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Winners Ticker Sector Industry 1D Return 5D Return YTD
IMMUNOMEDICS INC IMMU Health Care Biotechnology -21.9% -29.86% -11.64%
OCEANEERING INTERNATIONAL OII Energy Energy Equipment & Services -17.86% -22.35% -62.02%
REGENXBIO INC RGNX Health Care Biotechnology -11.22% -12.33% 15.78%
CALIFORNIA RESOURCES CORP CRC Energy Oil, Gas & Consumable Fuels -10.25% -31.96% -25.05%
FOSSIL GROUP INC FOSL Consumer Discretionary Textiles, Apparel & Luxury Goods -9.78% -5.2% 56.24%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
ALLAKOS INC ALLK Health Care Biotechnology 6.31% -17.65% 47.48%
PIVOTAL SOFTWARE INC PVTL Information Technology Software 2.36% -7.42% 0.7%
SPARK THERAPEUTICS INC ONCE Health Care Biotechnology 0.55% 1.84% -28.7%
FINISAR CORP FNSR Information Technology Communications Equipment 0.28% -3.31% 1.08%
FIRST SOLAR INC FSLR Information Technology Semiconductors & Semiconductor Equipment 0.28% -6.69% -50.82%

Source: S&P Capital IQ, StockDio

Cryptos

  • Facebook is reportedly in the process of developing a cryptocurrency for users of its WhatsApp messaging service, according to a Bloomberg report Thursday night. The prospective cryptocurrency will be pegged to the US dollar, making it a stablecoin. According to the Bloomberg report, Facebook’s coin will initially focus on the remittances market in India, which accounted for USD$69bn in foreign remittances in 2017, or 2.8% of the country’s GDP. 
  • ConsenSys, a notable blockchain software development company, is preparing to make significant staffing cuts, according to a report by news outlet the Verge. While citing a source familiar with the matter, ConsenSys may face staffing cuts of anywhere between 50% and 60% of its total 1,200-person staff with Consensys Labs, the company’s internal incubator, expected to be the hardest hit. In a letter to its staff cited by the Verge report, ConsenSys explained that the blockchain space is becoming increasingly, “competitive.” 

Cryptocurrencies Today

*Data in Price Return and Updated Real-Time (with a delay), Source: StockDio

 

High Machine Learning Accuracy Rates for CryptocurrenciesHigh Machine Learning Accuracy Rates for Cryptocurrencies

Events Calendar

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Company Name Ticker Event Date Event Type Q-Factor Score
SIG plc SHI 12/21/2018 Estimated Earnings Release Date China All-Cap: C
Grand Baoxin Auto Group Limited SEHK:1293 12/23/2018 Estimated Earnings Release Date China All-Cap: C
China Internet Nationwide Financial Services Inc. CIFS 12/23/2018 Estimated Earnings Release Date China All-Cap: F
Newater Technology, Inc. NEWA 12/23/2018 Estimated Earnings Release Date China All-Cap: D
Renren Inc. RENN 12/25/2018 Estimated Earnings Release Date China All-Cap: F
CLPS Incorporation CLPS 12/26/2018 Estimated Earnings Release Date China All-Cap: D
Greentown Service Group Co. Ltd. SEHK:2869 12/27/2018 Estimated Earnings Release Date China All-Cap: C
CT Environmental Group Limited SEHK:1363 12/27/2018 Estimated Earnings Release Date China All-Cap: D
Lamb Weston Holdings, Inc. LW 1/4/2019 Earnings Release Date US Large-Cap: A, US Consumer Staples: C
RPM International Inc. RPM 1/4/2019 Earnings Release Date US Large-Cap: C
Bed Bath & Beyond Inc. BBBY 1/8/2019 Estimated Earnings Release Date US Large-Cap: D, US Consumer Discretionary: D
MSC Industrial Direct Co., Inc. MSM 1/8/2019 Estimated Earnings Release Date US Large-Cap: B, US Industrials: C
Farmmi, Inc. FAMI 1/8/2019 Estimated Earnings Release Date China All-Cap: D
Acuity Brands, Inc. AYI 1/9/2019 Earnings Release Date US Large-Cap: C, US Industrials: C
Constellation Brands, Inc. STZ 1/9/2019 Earnings Release Date US Large-Cap: B, US Consumer Staples: C
Lennar Corporation LEN 1/9/2019 Earnings Release Date US Large-Cap: A, US Consumer Discretionary: C
KB Home KBH 1/9/2019 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: D
Delta Air Lines, Inc. DAL 1/9/2019 Estimated Earnings Release Date US Large-Cap: C, US Industrials: C

Source: S&P Capital IQ

 

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