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Morning Brief

Wake up to the Morning Quant Ride, your global markets update every morning!

Global stocks advancing on the last day of trading for 2018 on hopes for continued progress in US-China trade talks

Dec 31, 2018

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Market data as of 7am EST

 

US Stocks

  • US stocks index futures are advancing and point to a positive close to a volatile CY2018 with front-month Dow Jones minis +1.07%, S&P 500 minis +0.99% and Nasdaq 100 minis +1.16%
  • In spite of last week’s rally, US stocks are on pace for their worst year since the 2008 financial crisis
  • Interesting fact for the day: while the S&P 500 is having its worst year since 2008, “technically”, the 9-year bull market still has not “broken” with S&P 500 still holding above its weekly trend line
  • According to Bloomberg analysis, whole valuation for the S&P 500 as measured by the Cyclically adjusted P/E (CAPE) ratio remains at historically elevated levels, the CY2018 contraction in the ratio may point to a rally in US stocks next year -- on average, in subsequent years after a 10% drop in the CAPE ratio, the real return in the S&P 500 has been +9.6% going back to 1871
  • US President Donald Trump tweets that negotiations between US and Chinese trade officials are “moving along well” with "big progress” towards a comprehensive trade deal between the world’s two largest economies 
  • Emerging Markets ETFs experienced their 11th straight week of inflows with USD$300.9 million flowing into emerging markets stocks ETFs
  • The VIX is  moving down this morning and is currently at 27.19 after closing at 28.34 last week
  • XOP January 18 OTM Calls, Fiat Chrysler Automobiles (FCAU) January 18 OTM Call and IWM January 04 OTM Calls are some of the most actively traded options in the US premarket this morning
  • US 10-Year Treasury Bonds are lower with yields up 1.58 basis points to 2.734%
  • The US Treasury 2s-10s Spread has widened 0.77 basis points to 0.21%
  • WTI Crude is currently up 1.61% to USD$45.33/bbl with the Brent-WTI spread up USD$1.36 to USD$8.1/bbl
  • Gold is currently little changed 0.21% to USD$1283.38/oz

Stocks Trending in the News

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

  • Aflac (AFL) said it will enter reinsurance agreements on certain products with Singapore Life.  Aflac will make an initial USD$20mn minority investment in the concern as Aflac seeks to enter new markets.  Aflac describes the venture as a good example of its ability to leverage digital technology to enter new markets.  Aflac is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Amazon (AMZN) is making a big push in India to train shoppers on using its website.  Amazon has added Hindi and videos to its ordering screen to help residents on the Indian countryside, according to a report in the Wall Street Journal today.   Amazon is also adding small stores where shoppers can learn and a fleet of local delivery people what can accept payment when delivering.  Amazon is focused on the interior in Indian where 800 million people live and often d not have access to a retailer.  Amazon is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Canada Goose (TSX: GOOS) opened its first store in China this past Friday.  The store is located in Shanghai and has seen heavy crowds since its opening.  This despite the diplomatic tension between Canada and China after Canada detained a Huawei executive at the US’s request.  Canada Goose is not rated in our Global Top Stock Ideas.
  • Facebook’s (FB) recent data scandal has brought many criticisms of inaction at the Federal Trade Commission, according to a New York Times report today.  Facebook was not responsible for consultant’s misuse of Facebook user data, the Commission rules, rankling many proponents of stronger data protection rules.  Facebook is rated is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Jet Airways Limited (BSE: 532617) is reportedly in talks with the State Bank of India pertaining to a short-term 15bn rupee loan to meet working capital needs and current payment obligations. Reports by Press Trust of India highlights that Jet Airway’s partner Etihad may guarantee the loan. Jet Airways is rated “Top Buy” in our India All-Cap Global Top Stock Ideas.
  • Nissan’s (TSE: 7201) ousted chairman Carlos Ghosn will remain in jail until January 19th as prosecutors won more detention time for him.  Mr. Ghosn has been detained since November 19th for alleged financial crimes related to his personal finances.  Nissan is rated “Top Buy” in our Japan Large-Cap Global Top Stock Ideas.
  • A Pacific Gas and Electric Co. (PCG) worker has been hospitalized following the explosion of a company transformer. California’s Division of Occupational Safety and Health will conduct an official investigation into the matter. PG&E is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Tencent (TCEHY, SEHK: 700) was not the beneficiary of any approval for video games as China published approval for 80 new games titles.  China’s State Administration of Press, Publication, Radio, Film, and Television published the approvals online today.  China suspended approval of all new games earlier this year throwing a cloud of uncertainty over the sector.  Tencent Amazon is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
  • Tesla (TSLA) CEO Elon Musk will visit China in 2019 for the inauguration of Tesla’s production facility there.  Tesla’s factory is known as Gigafactory 3 and is located in Shanghai.  Elon Musk tweeted that he would be in China soon for the event without giving a date.  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.
  • Vestas Wind Systems A/S (CPSE: VWS) has received its first order from China State Power Investment Corporation, one of China’s five largest power companies. The order is a 19MW order of 4MW platform turbines. Additionally, the order includes a 5-year Active Output Management 4000 service agreement with delivery and commissioning expected to be completed in 3Q2019. Vestas Wind Systems is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.

 

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European Stocks

  • European stocks are advancing on the last day of the trading year following US President Donald Trump’s tweet that US-China negotiations are proceeding well
  • The Euro Stoxx 600 is currently up +0.33%, the FTSE 100 has declined -0.06%, the DAX has advanced +1.71%, and the CAC 40 has risen +0.94%
  • Italian stocks are the cheapest they have been since August 2012 based on the Forward 12-month P/E valuation metric, though in relation to the Euro Stoxx 600, its relative cheapness narrowed over the course of C4Q2018
  • Investor sentiment for European stocks is negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.61x
  • Oil & Gas (+0.53%), Telecommunications (+0.08%), and Basic Resources (+0.85%) stocks are the top performers in the Euro Stoxx 600 today
  • Automobiles & Parts (+0.49%), Food & Beverage (+0.25%), and Utilities (+0.53%) stocks are the worst performers in the Euro Stoxx 600 today
  • 4 stocks in the Euro Stoxx 600 are at 4-week highs while 26 stocks are at 4-week lows
  • 3 stocks in the Euro Stoxx 600 are overbought while 37 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 23.86 after closing at 23.86 yesterday
  • EUR€ is currently little changed against the USD$ at 1.1456
  • GBP£ is currently up +0.575% against the USD$ to 1.2772
  • CHF is currently little changed against the USD$ at 1.0169
  • German 10-Year Bunds are lower with yields up 1.1 basis points to 0.242%
  • UK 10-Year GILTs are lower with yields up 3.9 basis points to 1.309%

Asian Stocks

  • Asia stocks markets, for the most part, are closed today with last Friday the final day of the trading year for the Tokyo and Hong Kong stock exchanges 
  • The Hang Seng ended up +1.34%, the Hang Seng China Enterprise up +1.33%, and the CSI 300 was +0.67%
  • Hong Kong stocks finish CY2018 down in 9 out of 12 months, the most monthly declines since 1974 -- the full-year decline in the Hang Seng is the biggest annual decline since CY2011 
  • Indian stocks were the best performing regional stock market in Asia for CY2018 with the Sensex finishing +7.23% in local currency (-1.79% in USD$) -- domestic flows helped offset selling by foreign investors 
  • Investor sentiment for Hong Kong stocks finished positive with the advance/decline ratio for the Hang Seng closing at 7.33x
  • 0 stocks in the Hang Seng hit 4-week highs while 12 stocks reached 4-week lows
  • 0 stocks in the Hang Seng closed overbought while 4 stocks closed oversold according to the 16-day RSI Measure
  • Asia Bond Markets Commentary
  • China RMB 2-Year Government Bonds are higher with yields down -1.2 basis points to 2.762%
  • China RMB 10-Year Government Bonds are flat with yields little changed 0 basis points to 3.31%
  • China Government RMB 2s-10s Spread has widened 1.2 basis points to 0.55%

 

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

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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
BlackRock Inc 139 5.29 -6 1 -1.25% -5.65%
International Business Machines Corp 116 3.29 -1 -3 0.43% 0.91%
Morgan Stanley 94 2 -2 3 -2.3% 2.68%
Microsoft Corp 73 1.57 -3 29 0.04% 4.64%
Goldman Sachs Group Inc/The 62 1.43 -9 12 -3.33% 0.86%

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 139 5.29 -6 1 -1.25% -5.65%
Ford Motor Co 48 4.29 1 -6 -0.37% 0.41%
Philip Morris International Inc 21 4.14 -3 -8 0.01% 1.29%
Mastercard Inc 23 4 3 19 -0.05% 4.22%
Kinder Morgan Inc/DE 7 3.86 0 -2 -0.48% 8.05%

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 24.85 97.62% 22.42 98.41% 0.9 5.36% -3.9 19.25% -1.72 32.74%
QQQ 31.75 98.02% 28.97 99.21% 0.91 14.48% -4.35 25.79% -4.44 25.0%
IWM 28.26 98.02% 25.37 98.02% 0.9 6.55% -1.03 28.17% -0.69 27.38%
FEZ 22.24 97.22% 20.94 97.62% 0.94 22.82% 2.37 71.63% 2.13 75.4%
EEM 23.79 82.54% 24.32 96.83% 1.02 54.37% 4.43 89.68% -1.05 40.87%

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
MARRIOTT VACATIONS WORLDWIDE VAC Consumer Discretionary Hotels, Restaurants & Leisure 2.35% 6.78% -65.57%
FIRSTCASH INC FCFS Financials Consumer Finance 1.78% -0.2% 5.62%
SYNOVUS FINANCIAL CORP SNV Financials Banks 1.74% 2.18% -38.86%
PG&E CORP PCG Utilities Electric Utilities 1.22% 0.17% -62.18%
NORTHROP GRUMMAN CORP NOC Industrials Aerospace & Defense 1.11% -0.56% -21.57%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
EXPRESS SCRIPTS HOLDING CO ESRX Health Care Health Care Providers & Services -3.69% -6.92% 20.48%
WEX INC WEX Information Technology IT Services -1.55% 2.41% -3.02%
KAR AUCTION SERVICES INC KAR Industrials Commercial Services & Supplies -1.51% -2.23% -6.29%
BLACKBAUD INC BLKB Information Technology Software -1.48% 1.43% -40.49%
MASTERCARD INC MA Information Technology IT Services -1.35% 1.87% 20.88%

Source: S&P Capital IQ, StockDio

Top Short Winners and Losers

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Winners Ticker Sector Industry 1D Return 5D Return YTD
ANTERO RESOURCES CORP AR Energy Oil, Gas & Consumable Fuels -6.51% -5.7% -76.44%
RANGE RESOURCES CORP RRC Energy Oil, Gas & Consumable Fuels -5.55% -6.23% -61.44%
TENABLE HOLDINGS INC TENB Information Technology Software -5.12% 4.83% -30.67%
CARVANA CO CVNA Consumer Discretionary Specialty Retail -4.7% 1.23% 55.17%
SOUTHWESTERN ENERGY CO SWN Energy Oil, Gas & Consumable Fuels -4.16% 2.0% -51.53%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
SNAP INC SNAP Information Technology Software 6.51% 11.89% -96.25%
PENNEY (J C) CO JCP Consumer Discretionary Multiline Retail 6.0% -8.38% -122.32%
PORTOLA PHARMACEUTICALS INC PTLA Health Care Biotechnology 5.16% 4.55% -104.84%
SPARK THERAPEUTICS INC ONCE Health Care Biotechnology 4.05% -3.72% -32.42%
TANDEM DIABETES CARE INC TNDM Health Care Health Care Equipment & Supplies 4.05% 16.58% 268.71%

Source: S&P Capital IQ, StockDio

Cryptos

  • Cryptocurrencies fell broadly lower over the weekend with the price of Bitcoin (BTC) down 3.95% since Friday’s close to USD$3,791.53. Total cryptocurrency market capitalization currently sits at USD$127.3bn, down 3.9% since end of day Friday. Bitcoin Cash (BCH) fell the most among major coins this week, down 8.28% since Friday’s close to USD$158.08 -- Bitcoin SV (BSV) followed closely behind, falling 7.69% since end of day Friday to USD$86.68. Binance Coin (BNB), meanwhile, was the only positive major coin this weekend, up 1.97% since Friday’s close to USD$6.14.  
  • A Chinese survey conducted by PANews, an Asian news outlet for sharing blockchain news, finds that 40% of the 4,200 survey respondents are willing to invest in cryptocurrencies in the future. 63% of respondents, meanwhile, believe that there is no necessity for cryptos as a means for payment. Nearly half of all survey respondents have heard of the terms cryptocurrency, digital currency, or Bitcoin (BTC), while just 22.2% of survey respondents were aware of the existence of blockchain-powered tokens.  
  • Bitcoin (BTC) was featured in an article that discusses its potential liberating potential in major American publication Time magazine. The article discusses that, “speculation, fraud, and greed in the cryptocurrency and blockchain industry have overshadowed the real, liberating potential of Satoshi Nakamoto’s invention.” The article goes on to highlight how cryptocurrency adoption has benefited Venezuelans amid hyperinflation in the country’s Sovereign Bolivar; the fee for a wire transfer from the US to Venezuela can be as high as 56%, the article details while adding that Venezuelans have turned to cryptocurrencies as a cheap alternative to wire transfers.  
  • White hat hackers, or hackers that maintain a code of ethics and act with good intentions, were awarded USD$878,000 from bug bounties this year, according to tech news outlet TheNextWeb. Bug bounties are a competition where companies develop software or programs and invite hackers to attempt to find vulnerabilities in their software in order to fix problems before they are exploited by the public. A majority of the bug bounties in 2018 came from HackerOne, a bug bounty platform that connects companies with hackers from Block.one, the company behind decentralized network EOS (EOS). 

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 12/28/2018 Estimated Earnings Release Date China All-Cap: C
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
SYNNEX Corporation SNX 1/10/2019 Earnings Release Date US Large-Cap: D, US Information Technology: C
First Republic Bank FRC 1/10/2019 Estimated Earnings Release Date US Large-Cap: B
Fastenal Company FAST 1/13/2019 Estimated Earnings Release Date US Large-Cap: A, US Industrials: B
Bank OZK OZK 1/17/2019 Earnings Release Date US Large-Cap: F
Johnson Electric Holdings Limited SEHK:179 1/13/2019 Estimated Earnings Release Date China All-Cap: C
Citigroup Inc. C 1/14/2019 Earnings Release Date US Large-Cap: C
India Globalization Capital, Inc. IGCC 1/14/2019 Estimated Earnings Release Date US Large-Cap: D

Source: S&P Capital IQ

 

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