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Morning Brief

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Stocks dropping as a weak PMI reading out of China rattles global markets

Jan 02, 2019

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Market data as of 7am EST

 

US Stocks

  • US stocks index futures are declining, pointing to a negative start for stocks in CY2019 with front-month Dow Jones minis –1.18%, S&P 500 minis, -1.19%, and Nasdaq 100 minis –1.89%
  • Stock Market strategists suggest metals stocks are set to recover in CY2019 and will be one of the best performing industry sectors with a peak US Dollar  
  • The VIX is moving up this morning and is currently at 28.08 after closing at 25.42 Monday
  • SPY February 15 & March 15 OTM Calls & Puts, Twitter (TWTR) February 15 & March 15 OTM Calls, Bank of America (BAC) January 18 OTM Calls, and HYG February 15 OTM Puts are some of the most actively traded options contracts in the US pre-market
  • US 10-Year Treasury Bonds are higher with yields down -3.73 basis points to 2.6487%
  • The US Treasury 2s-10s Spread has narrowed 3.73 basis points to 0.16%
  • WTI Crude is currently little changed 0.18% to USD$45.41/bbl with the Brent-WTI spread down USD$-1.11 to USD$6.92/bbl
  • Gold is currently up 0.31% to USD$1286.57/oz

Stocks Trending in the News

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

  • Abbott Labs (ABT) was downgraded to sell from neutral at Citi today.  Abbott Labs’ price target was lowered to USD$68 from USD$72.  Abbott Labs’ price target implies 8% downside from its last close.  Abbott Labs is rated “Neutral” in our US Large-Cap Global Top Stock Ideas
  • Aflac Inc. (AFL) has been downgraded by JPMorgan Chase & Co. to neutral from overweight. JPMorgan Chase & Co. forecasts a price target of USD$51/share for Aflac, implying a 12% upside from Monday’s close. Across industry estimates, Aflac maintains an average price target of USD$46.50. Aflac is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Akami (AKAM) was downgraded today to market perform from outperform at JP Morgan.  Akami’s price target was cut to USD$73 from USD$86.  Akami will see lower top-line growth than previously expected.  Akami is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Baidu Inc. (BIDU) Chairman Robin Li said in an open letter today that the firm will focus on opportunities in artificial intelligence (AI) technology in 2019. In the open letter, Li highlighted the enormous opportunities for growth and augmentation in the technology. Baidu is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
  • Banca Carige (BIT: CRG) saw its operations placed under temporary administration by the European Central Bank.  Banca Carige saw this happen after it failed to raise additional capital last week.  A team from the ECB will help the bank lower risk and potentially find a partner.  Banca Carige is rated “Unattractive” in our European SMID-Cap Global Top Stock Ideas.
  • Becton, Dickinson & Co (BDX) was named a top large-cap pick at JP Morgan for 2019.  Becton, Dickinson will see 6-7% growth in 2019, growing faster than peers.  Becton, Dickinson will see margin expansion in 2019 in the wake of its acquisition of Bard, 2019 will see full integration of the Bard business.  Becton, Dickinson & Co is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • BioMarin Pharmaceutical Inc. (BMRN) has been downgraded by Raymond James from outperform to market perform. BioMarin currently maintains 22 buy recommendations, 6 hold recommendations, and 0 sell recommendations across industry ratings. Over the last year, analysts have raised BioMarin’s consensus price target by 0.8%. BioMarin is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Facebook (FB) Messenger is likely set to introduce a dark mode, according to reports. Jane Machun Wong, a tech tipster, posted a screenshot on Twitter that appears to be a work in progress of a dark mode interface for Facebook Messenger. A dark mode for Facebook Messenger would effectively make the application easier to use at night while saving battery for Android users. Facebook is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Geely Automotive (SEHK: 175) released the first photos of its new models as it seeks to broaden its automotive offerings.  Geely Automotive released photos of a new coupe SUV that is based on its new modular architecture.  Geely did not give a data it will go on sale nor a price for the vehicle.  Geely Automotive is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
  • Netflix (NFLX) has removed a TV from streaming in Saudi Arabia at the request of regulators there.  Netflix removed a show that is critical of the US-Saudi Arabia relationship after regulators said the show runs afoul of Saudi Arabia’s cybersecurity laws.  Netflix is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas. 
  • Omega Healthcare (OHI) announced that it will acquire MedEquities Realty Trust (MRT) in a deal that values MedEquities at USD$600mm in enterprise value. The acquisition will see Omega take on USD$34mm in mortgage loans while diversifying the firm’s property portfolio to 7 different states. Omega Healthcare is rated “Neutral” in our US Large-Cap Global Top Stock Ideas. MedEquities is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas.
  • Tata Steel Ltd (BSE: 500470) has its stock downgraded today by CLSA.  Tata Steel was downgraded to sell from neutral at CLSA.  Tata Steel’s price target was slashed to 460 rupees from 815 rupees, implying an 8.6% downside from its last price.  Tata Steel is not rated in our Global Top Stock Ideas.
  • Wright Medical Group (WMGI) was chosen as a 2019 top picks among medical technology companies by Piper Jaffray.  Wright Medical Group should see “solid growth” in 2019 in a sector it says “is cheap”.   Wright Medical Group is not rated in our Global Top Stock Ideas.
     

 

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European Stocks

  • European stocks are negative to start the year after a weak PMI reading out of China spooks investors on the first day of trading in CY2019
  • The Euro Stoxx 600 is currently down -0.73%, the FTSE 100 has declined -0.72%, the DAX has fallen -0.08%, and the CAC 40 is lower by -1.39%
  • 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 0.59x
  • Oil & Gas (-1.15%), Telecommunications (-0.3%), and Basic Resources (-3.49%) stocks are the top performers in the Euro Stoxx 600 today
  • Automobiles & Parts (-1.77%), Food & Beverage (-0.47%), and Utilities (-0.13%) stocks are the worst performers in the Euro Stoxx 600 today
  • 7 stocks in the Euro Stoxx 600 are at 4-week highs while 3 stocks are at 4-week lows
  • 2 stocks in the Euro Stoxx 600 are overbought while 15 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 24.08 after closing at 23.86 Friday
  • EUR€ is currently down -0.262% against the USD$ to 1.1435
  • GBP£ is currently down -0.565% against the USD$ to 1.2668
  • CHF is currently down -0.314% against the USD$ to 1.0154
  • German 10-Year Bunds are higher with yields down -8.1 basis points to 0.161%
  • UK 10-Year GILTs are higher with yields down -8.2 basis points to 1.195%

Asian Stocks

  • Asia stocks decline overnight trading to start the year -- the worst start since 2016 
  • Investor sentiment for Hong Kong stocks finished negative with the advance/decline ratio for the Hang Seng closing at 0.02x
  • The drop in Hong Kong Stocks to start the year is the worst start for Hong Kong stocks since 1995 
  • The China Caixin Manufacturing PMI gave a reading 49.7 for the month of December (vs. Consensus of 50.2 and a reading of 50.2 for November) -- the lowest reading for the China PMI since May 2017 and points to potential contraction in the Chinese economy
  • 1 stock in the Hang Seng hit 4-week highs while 0 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
  • basis points to 2.762%
  • China RMB 10-Year Government Bonds are higher with yields down -13.2 basis points to 3.178%
  • China Government RMB 2s-10s Spread has narrowed 12 basis points to 0.42%
  • JPY¥ is currently down -0.583% against the USD$ to 109.1

 

*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 148 5.57 -5 -1 -1.25% -5.64%
International Business Machines Corp 90 3.14 -1 -3 0.43% 0.91%
Morgan Stanley 86 2.57 -3 3 -2.3% 2.83%
Microsoft Corp 79 2.86 -2 29 0.04% 4.64%
Netflix Inc 74 3.71 -3 -8 -1.55% -3.23%

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 148 5.57 -5 -1 -1.25% -5.64%
Ford Motor Co 46 4.57 0 -5 -0.37% 0.66%
Philip Morris International Inc 23 4.43 -3 -2 0.01% 2.28%
Starbucks Corp 17 4 4 1 -0.01% 4.89%
Berkshire Hathaway Inc 23 4 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 22.74 96.43% 21.1 97.22% 0.93 7.74% -6.39 12.7% -3.15 26.59%
QQQ 29.85 97.22% 27.47 97.62% 0.92 17.86% -6.53 19.84% -6.01 18.25%
IWM 26.86 96.83% 24.71 97.22% 0.92 10.12% -2.83 18.25% -1.33 23.81%
FEZ 20.93 92.26% 19.62 93.65% 0.94 23.02% 0.9 57.14% 0.82 64.09%
EEM 23.11 79.37% 23.56 93.25% 1.02 54.56% 3.86 87.3% -1.78 28.57%

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
NEXSTAR MEDIA GROUP NXST Consumer Discretionary Media 2.89% 6.6% 4.15%
MOTOROLA SOLUTIONS INC MSI Information Technology Communications Equipment 2.46% 2.92% 25.72%
KAR AUCTION SERVICES INC KAR Industrials Commercial Services & Supplies 2.29% 2.14% -4.01%
MARTIN MARIETTA MATERIALS MLM Materials Construction Materials 2.18% 3.9% -26.03%
DISNEY (WALT) CO DIS Consumer Discretionary Media 2.17% 5.08% -0.36%
 
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%
DOMINO'S PIZZA INC DPZ Consumer Discretionary Hotels, Restaurants & Leisure -0.79% 3.49% 29.11%
FIRST AMERICAN FINANCIAL CP FAF Financials Insurance -0.69% 2.15% -19.39%
PG&E CORP PCG Utilities Electric Utilities -0.59% 4.3% -62.77%
KELLOGG CO K Consumer Staples Food Products -0.42% -1.1% -14.29%

Source: S&P Capital IQ, StockDio

Top Short Winners and Losers

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Winners Ticker Sector Industry 1D Return 5D Return YTD
BLOOM ENERGY CORP-REDH BE Industrials Electrical Equipment -8.17% -1.0% -91.83%
IMMUNOMEDICS INC IMMU Health Care Biotechnology -4.99% -5.26% -10.94%
ROWAN COMPANIES PLC RDC Energy Energy Equipment & Services -4.88% 3.03% -65.74%
GULFPORT ENERGY CORP GPOR Energy Oil, Gas & Consumable Fuels -3.89% -2.11% -70.53%
HERTZ GLOBAL HOLDINGS INC HTZ Industrials Road & Rail -3.74% 1.77% -52.57%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
PORTOLA PHARMACEUTICALS INC PTLA Health Care Biotechnology 13.29% 23.32% -91.55%
EDITAS MEDICINE INC EDIT Health Care Biotechnology 9.35% 22.37% -41.12%
HERON THERAPEUTICS INC HRTX Health Care Biotechnology 8.82% 15.61% 33.8%
MADRIGAL PHARMACEUTICALS INC MDGL Health Care Biotechnology 7.63% 16.59% 14.59%
PTC THERAPEUTICS INC PTCT Health Care Biotechnology 6.97% 12.69% 67.58%

Source: S&P Capital IQ, StockDio

Cryptos

  • Cryptocurrency markets rallied in New Year trading while Bitcoin (BTC) lagged the broader market, up just 0.3% since Monday’s close to USD$3,843.71. Ethereum (ETH) has been the top performing major cryptocurrency in New Year trading, up 9.0% since Monday’s close to USD$149.44. Binance Coin (BNB), meanwhile, has lagged the broader crypto market in New Year trading, depreciating 2.1% since Monday’s close to USD$5.98. Total cryptocurrency market capitalization currently sits at USD$130.9bn, up 1.7% since Monday’s close.  
  • “Few tangible uses for Bitcoin (BTC) and its underlying blockchain technology have emerged,” said the Wall Street Journal (WSJ) in its recent article, “Crypto’s 2019 Goal: Technology People Can Use”.  As part of a larger documentary on the crypto industry in Japan and Hong Kong, the WSJ published this article highlighting that cryptocurrencies and blockchain technology did not find many, if any, practical use cases in 2018. The article quotes Andy Bromberg, founder of Coinlist, who said, “Bitcoin and the hundreds of other digital currencies that have popped up over the years and are still largely usable only by developers.” 
  • After rallying 87% from a low of USD$83/token on December 15th to a high of USD$149/token in today’s trading, Ethereum (ETH) has retaken the spot as the crypto industry’s largest altcoin. ETH has appreciated 9.52% in the last 24 hours while it trades with a market capitalization of roughly USD$15.5bn, more than USD$0.5bn above Ripple’s (XRP) market capitalization. The Ethereum Network is expected to implement its Constantinople hard for at block 7,080,000 around January 16th, 2019 -- the largest impact of this hard fork will be a 50% block reward cut from 3 ETH to 2 ETH.  
  • DDM.com Ltd., a Japanese e-commerce giant, announced that it will shut down its cryptocurrency mining business due to falling profitability. According to a report by local business magazine Toyo Keizai, Dmm.com will sell its company mining hardware through the first half of 2019. Dmm.com initially announced their foray into the crypto mining industry in September 2017 with a focus on Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC). Dmm.com’s e-commerce business currently maintains more than 27 million clients across the globe.

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
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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