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Morning Brief

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US stocks are little changed as 4Q earnings moves to the forefront

Jan 16, 2019

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Market data as of 7am EST

 

US Stocks

  • US stocks index futures are little changed and are pointing to a neutral open in NY this morning with front-month Dow Jones minis +0.08%, S&P 500 minis +0.10% and Nasdaq 100 minis 0.00%
  • FAANG stocks, led by Netflix (NFLX), have been leading a post-Christmas rally in the S&P 500. In addition to Netflix (NFLX), Facebook (FB) and Amazon.com (AMZN) have also outpaced the S&P500; Alphabet (GOOG.L) has been more or less in-line with the return on the S&P 500 
  • Bloomberg reports that 50-day moving average of daily price swings in the S&P 500 is near its highest levels since December 2008 – the rise in popularity of weekly S&P 500 options and greater flows into SPY are explained as factors driving this intraday volatility
  • There has been increased flows into leveraged ETFs that benefit when the S&P 500 drops – USD$380 million has flowed into the ProShares Short S&P 500 ETF (SH) over the past 2 weeks, the biggest inflow since CY2010
  • In contrast, the US Financial Conditions index has moved back into positive territory and points to a brightening outlook for US and global stocks – the bounce-back in investor sentiment is the primary driver of the move in the index
  • The VIX is little changed this morning and is currently at 18.13 after closing at 18.6 last week
  • FXI January 18 OTM Calls, VNQ March 15 OTM Puts, JD.com (JD) January 18 OTM Calls, and SPY January 18 OTM Calls are some of the most actively traded US options contracts in the US pre-market today
  • US 10-Year Treasury Bonds are lower with yields up 2.67 basis points to 2.7379%
  • The US Treasury 2s-10s Spread has widened 1.43 basis points to 0.19%
  • WTI Crude is currently down 0.79% to USD$51.71/bbl with the Brent-WTI spread down USD$ 2.04 to USD$8.13/bbl
  • Gold is currently little changed -0.06% to USD$1288.78/oz
     

Stocks Trending in the News

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

  • Bank of America (BAC) reported CY4Q2018 earnings that broadly beat analysts’ consensus estimates led by the bank’s retail business. Bank of America generated EPS of USD$0.70/share in CY4Q2018 while analysts expected USD$0.63/share. Bank of America also increased its efficiency ratio from 58% a year ago to 65% in CY4Q2018. Bank of America is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • BlackRock (BLK) reported 4Q18 EPS of USD$6.08 versus USD$6.28 consensus.  4Q18 revenue of USD$3.43 billion came in-line with consensus.  BlackRock increased quarterly dividend 5% to USD$3.30.  BlackRock is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Deutsche Bank AG (DB: DBK) Chief Executive Officer Christian Sewing detailed on Tuesday that the bank launched a further internal investigation into its role as a correspondent bank for Danske Bank’s (CPSE: DANSKE) Estonian unit. At an event in Berlin on Tuesday, Sewing said that Deutsche Bank probed its role in Danske Bank’s tax evasion scheme, “long before the cases became public.” Deutsche Bank is rated “Neutral” in our European Large-Cap Global Top Stock Ideas. Danske Bank is rated “Top Short” in our European Large-Cap Global Top Stock Ideas.
  • DSV A/S (CPSE:DSV), the Danish freight concern, is bidding USD$4 billion for Panalpina Welttransport Holding (SWX:PWTN), its Swiss rival.  DSV is looking to create a shipping concern that would be #4 in global logistics.  This is DSV’s second bid for a sector player in the last 6 months.  DSV is rated “Top Buy” in our European Large-Cap Global Top Stock Ideas.  Panalpina Welttransport Holdings is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas.
  • Fiserv (FISV) reports preliminary financials for CY4Q2018 while announcing the all-stock acquisition of First Data Corporation (FDC). The acquisition by Fiserv values First Data at an about USD$22bn. Additionally, Fiserv reported that it expects CY4Q2018 EPS between USD$0.84/share and USD$0.85/share while analysts’ consensus calls for USD$0.87/share. Fiserv is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas. First Data is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Ford (F) reported a preliminary 2018 profit of USD$1.30, a touch below USD$1.32 consensus.  CFO Bob Shanks said he expects 2019 to see an improvement in ebitda, though that cannot be guaranteed.  Ford is entering 2019 with plans to abandon the sedan market, focusing mostly on SUVs.  Ford is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Goldman Sachs (GS) reports CY4Q2018 financials that largely please investors and analysts. Goldman Sachs generated an EPS of USD$6.04/share in CY4Q2018 while analysts’ consensus called for USD$5.30/share. Goldman Sachs’ revenue fell 0.5% y/y to USD$8.08bn although it still beat analysts’ consensus by USD$580mm. Goldman Sachs is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • McDonald’s (MCD) lost a case in the EU that cost it its right to the trademark for the term “Big Mac”.   The EU Intellectual Property Office ruled McDonald’s does not have the right to the name, instead granting that right to Ireland’s Supermac chain.  McDonald’s 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.
  • Nordstrom (JWN) was downgraded to market perform from outperform at Telsey Advisory Group.  Telsey cut Nordstrom price target to USD$56 to USD$72, an 18% upside from last close.  Nordstrom is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Norsk Hydro (OB: NHY) shares are reacting positively after regulators said it can reopen its Alunorte mine.  Brazilian environmental regulators said Norsk Hydro can resume production at the mine, removing the embargo that was in place.  Norsk Hydro is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • Snap Inc. (SNAP) shares are falling after an SEC filing revealed the resignation of Chief Financial Officer Tim Stone. The Snap SEC filing details that the CFO’s resignation is not related to, “any disagreement with us on any matter relating to our accounting, strategy, management, operations, policies, regulatory matters, or practices (financial or otherwise).” Snap is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • United Continental (UAL) reported 4Q18 EPS of USD$2.41, well above consensus of USD$2.04.  4Q18 revenue grew 11% to USD$10.49 billion, also ahead of USD$10.377 billion.  4Q18 PRASM grew by 5%.  United Continental expects 1Q19 capacity to grow 5-6%.  United Continental is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Industrials Global Top Stock Ideas.


 

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European Stocks

  • European stocks are little changed with UK political theater driving news headlines this morning
  • The Euro Stoxx 600 is currently up +0.1%, the FTSE 100 has declined -0.63%, the DAX has fallen -0.15%, and the CAC 40 has risen +0.05%
  • UK stocks are dropping after UK Prime Minister Theresa May’s BREXIT plan was voted down in the UK Parliament 
  • The Tories will be holding a no-confidence vote in UK Prime Minister Theresa May’s government later today 
  • According to Bank of America, institutional investors are the most underweight Eurozone stocks since 2012 -- according to the analysis, allocations to Eurozone strocks has been dropping since C4Q2017
  • Investor sentiment for European stocks is positive with the advance/decline ratio for the Euro Stoxx 600 currently at 1.23x
  • Oil & Gas (-0.55%), Telecommunications (-0.4%), and Basic Resources (+0.29%) stocks are the top performers in the Euro Stoxx 600 today
  • Automobiles & Parts (-0.24%), Food & Beverage (-0.71%), and Utilities (+0.1%) stocks are the worst performers in the Euro Stoxx 600 today
  • 156 stocks in the Euro Stoxx 600 are at 4-week highs while 26 stocks are at 4-week lows
  • 8 stocks in the Euro Stoxx 600 are overbought while 3 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 16.27 after closing at 16.93 yesterday
  • EUR€ is currently down -0.245% against the USD$ to 1.1385
  • GBP£ is currently little changed against the USD$ at 1.2853
  • CHF is currently down -0.198% against the USD$ to 1.0103
  • German 10-Year Bunds are lower with yields up 2.3 basis points to 0.229%
  • UK 10-Year GILTs are lower with yields up 6.9 basis points to 1.327%

Asian Stocks

  • Asia stocks finished mixed as the boost from the announcement that the Chinese government is considering a major tax cut faded
  • The Nikkei 225 finished down --0.55%, the Hang Seng ended up +0.27%, the Hang Seng China Enterprise up +0.5%, and the CSI 300 was +0.02%
  • Investor sentiment for Japanese stocks finished negative with the advance/decline ratio for the Nikkei 225 closing at 0.43x
  • 68 stocks in the Nikkei 225 hit 4-week highs while 4 stocks reached 4-week lows
  • 1 stock in the Nikkei 225 closed overbought while 1 stock closed oversold according to the 16-day RSI Measure
  • Investor sentiment for Hong Kong stocks finished positive with the advance/decline ratio for the Hang Seng closing at 1.63x
  • 22 stocks in the Hang Seng hit 4-week highs while 0 stocks reached 4-week lows
  • 3 stocks in the Hang Seng closed overbought while 0 stocks closed oversold according to the 16-day RSI Measure
  • Japan 2-Year Government Bonds are higher with yields down -0.8 basis points to -0.159%
  • Japan 10-Year Government Bonds are higher with yields down -0.3 basis points to 0.01%
  • JGBs 2s-10s Spread has widened 0.5 basis points to 0.17%
  • JPY¥ is currently little changed against the USD$ at 108.84

 

*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
JPMorgan Chase & Co 89 4 -5 4 0.35% 0.29%
Netflix Inc 63 1.29 -5 -11 -1.79% -2.18%
Ford Motor Co 56 2 -3 -3 -4.09% 0.88%
QUALCOMM Inc 47 2.29 -3 -11 -1.01% 8.87%
Verizon Communications Inc 46 2.57 -4 13 -0.04% 0.5%

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
PepsiCo Inc 20 6.86 -1 -1 -1.18% -1.49%
Union Pacific Corp 16 6 1 13 0.1% 4.32%
Morgan Stanley 6 5.71 -10 10 -5.51% -5.33%
BlackRock Inc 27 5.57 -10 -7 -6.41% -9.18%
Texas Instruments Inc 11 5.43 0 -13 -0.27% -8.23%

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 14.72 65.87% 16.02 73.02% 1.09 55.56% -14.97 0.4% -8.27 1.59%
QQQ 21.15 68.25% 21.12 74.8% 1 49.21% -15.65 0.4% -12.15 0.4%
IWM 18.72 72.22% 19.17 77.78% 1.02 46.23% -11.67 0.4% -7.49 0.4%
FEZ 17.15 66.67% 15.85 56.35% 0.92 15.08% -2.85 20.63% -3.67 7.14%
EEM 18.31 44.84% 19.81 54.76% 1.08 88.49% -1.17 40.87% -4.32 8.13%

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

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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
EDWARDS LIFESCIENCES CORP EW Health Care Health Care Equipment & Supplies 8.09% 6.03% 37.34%
EXELIXIS INC EXEL Health Care Biotechnology 5.07% 3.25% -26.67%
VEEVA SYSTEMS INC VEEV Health Care Health Care Technology 4.17% 6.75% 61.05%
MASIMO CORP MASI Health Care Health Care Equipment & Supplies 4.11% 9.06% 29.87%
FIRST REPUBLIC BANK FRC Financials Banks 11.19% 8.58% 11.23%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
VAIL RESORTS INC MTN Consumer Discretionary Hotels, Restaurants & Leisure -2.57% -16.81% -11.39%
HOME DEPOT INC HD Consumer Discretionary Specialty Retail -1.32% -0.8% -4.13%
PARKER-HANNIFIN CORP PH Industrials Machinery -1.14% -0.42% -24.13%
URBAN OUTFITTERS INC URBN Consumer Discretionary Specialty Retail -1.0% -2.44% -11.49%
BLOCK H & R INC HRB Consumer Discretionary Diversified Consumer Services -0.9% -0.43% -1.64%

Source: S&P Capital IQ, StockDio

Top Short Winners and Losers

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Winners Ticker Sector Industry 1D Return 5D Return YTD
GOODYEAR TIRE & RUBBER CO GT Consumer Discretionary Auto Components -13.98% -10.29% -50.84%
UNITED NATURAL FOODS INC UNFI Consumer Staples Food & Staples Retailing -9.74% 0.67% -141.8%
SOUTHERN COPPER CORP SCCO Materials Metals & Mining -4.86% -3.27% -43.46%
SHAKE SHACK INC SHAK Consumer Discretionary Hotels, Restaurants & Leisure -4.21% -0.92% 10.65%
SUMMIT MATERIALS INC SUM Materials Construction Materials -3.87% -6.1% -84.83%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
GLOBAL BLOOD THERAPEUTICS GBT Health Care Biotechnology 5.52% 9.27% 11.69%
VISTEON CORP VC Consumer Discretionary Auto Components 4.53% 6.19% -63.73%
EQT MIDSTREAM PARTNERS LP EQM Energy Oil, Gas & Consumable Fuels 4.37% 1.22% -39.25%
BLUEBIRD BIO INC BLUE Health Care Biotechnology 4.19% 5.98% -41.03%
SAGE THERAPEUTICS INC SAGE Health Care Biotechnology 3.82% 1.94% -23.36%

Source: S&P Capital IQ, StockDio

Cryptos

  • Cryptocurrencies are moving slightly higher this morning with Bitcoin (BTC) up 0.05% in the last 24 hours to USD$3,685. Cardano (ADA) is leading major coins in gains today, up 3.70% in the last 24 hours to USD$0.044813. Binance Coin (BNB) lags slightly behind, appreciating the second-most among major coins, up 2.28% in the last 24 hours to USD$6.11. Waves (WAVES) has fallen the most today among major cryptocurrencies, down 2.28% in the last 24 hours to USD$2.64.  
  • Binance announced the launch of a new fiat-to-cryptocurrency exchange on the British self-governing island of Jersey in an attempt to target investors in Europe and the UK. The newest venture by the world’s largest cryptocurrency exchange by daily adjusted trading volume will feature trading pairs for Bitcoin (BTC) and Ethereum (ETH) against the British pound and the Euro. In its announcement, Binance clarified that Binance Jersey is an independent entity from its parent exchange Binance.com.  
  • Brave Browser, a popular ICO-funded internet browser whose Basic Attention Tokens (BAT) are the 34th largest coin by market capitalization, is set to launch an option that pays users for viewing advertisements on its platform. As a part of Brave Browser’s 1.0 release, users will be able to elect to see up to 20 advertisements per day. Users that view advertisements will receive 70% of revenue from the advertisement while Brave will receive the other 30%.  
  • Several notable oil and energy companies are set to join Vakt, a blockchain platform for energy commodity trading based in the UK, according to a report by Reuters. Chevron, one of the largest US-based multinational energy companies, Total, a notable French multinational oil and gas company, and Reliance Industries, a large Indian oil refiner, have all joined the Vakt platform. Vakt already features notable global energy industry members like BP, Shell, and Equinor. 

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
The Bank of New York Mellon Corporation BK 1/16/2019 Earnings Release Date US Large-Cap: D
Bank of America Corporation BAC 1/16/2019 Earnings Release Date US Large-Cap: C
BlackRock, Inc. BLK 1/16/2019 Earnings Release Date US Large-Cap: B
The PNC Financial Services Group, Inc. PNC 1/16/2019 Earnings Release Date US Large-Cap: C
U.S. Bancorp USB 1/16/2019 Earnings Release Date US Large-Cap: C
The Goldman Sachs Group, Inc. GS 1/16/2019 Earnings Release Date US Large-Cap: D
Comerica Incorporated CMA 1/16/2019 Earnings Release Date US Large-Cap: B
CSX Corporation CSX 1/16/2019 Earnings Release Date US Large-Cap: A, US Industrials: A
Alcoa Corporation AA 1/16/2019 Earnings Release Date US Large-Cap: D
Fastenal Company FAST 1/16/2019 Estimated Earnings Release Date US Large-Cap: C, US Industrials: B
Commerce Bancshares, Inc. CBSH 1/17/2019 Earnings Release Date US Large-Cap: C
Morgan Stanley MS 1/17/2019 Earnings Release Date US Large-Cap: D
BB&T Corporation BBT 1/17/2019 Earnings Release Date US Large-Cap: C
PPG Industries, Inc. PPG 1/17/2019 Earnings Release Date US Large-Cap: C
Signature Bank SBNY 1/17/2019 Earnings Release Date US Large-Cap: D
KeyCorp KEY 1/17/2019 Earnings Release Date US Large-Cap: C
MGIC Investment Corporation MTG 1/17/2019 Earnings Release Date US Large-Cap: C
M&T Bank Corporation MTB 1/17/2019 Earnings Release Date US Large-Cap: B
Netflix, Inc. NFLX 1/17/2019 Earnings Release Date US Large-Cap: D, US Consumer Discretionary: C
People's United Financial, Inc. PBCT 1/17/2019 Earnings Release Date US Large-Cap: D
J.B. Hunt Transport Services, Inc. JBHT 1/17/2019 Earnings Release Date US Large-Cap: B, US Industrials: A
Bank OZK OZK 1/17/2019 Earnings Release Date US Large-Cap: F
PacWest Bancorp PACW 1/17/2019 Estimated Earnings Release Date US Large-Cap: C
Regions Financial Corporation RF 1/17/2019 Earnings Release Date US Large-Cap: C

Source: S&P Capital IQ

 

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