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Morning Brief

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Global stocks declining as global growth jitters push markets down

Jan 22, 2019

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Market data as of 7am EST

 

US Stocks

  • Yesterday’s release by China’s National Bureau of Statistics that shows China 4Q GDP slowing to 6.4% in CY2018 vs 6.8% in CY2017 has rekindled worries about a deceleration in global growth 
  • US stocks index futures are dropping to start the week after yesterday’s MLK holiday with front-month Dow Jones minis –0.56%, S&P 500 minis -0.65%, and Nasdaq 100 minis -0.84% 
  • Global growth will be in focus this week as the 2019 Annual World Economic Forum in Davos begins today
  • The S&P 500 is on pace to enter an “earnings recession” with expectations for earnings growth for 1Q falling to 5.9% and forecasted 2Q earnings growth falling to 3.6% 
  • 55 members of the S&P 500 has reported 4Q earnings so far with 76.4% beating estimates 
  • Analysis by Bloomberg, Dealogic and Goldman Sachs suggests IPOs as a percentage of the S&P 500 market capitalization is set to double the rolling 5-year average with several maturing unicorns expected to come to market over the next few years.  The expected increase would be the largest increase since 19945 when IPOs spike to more than 3 times the annual average change. 
  • The rally in oil prices YTD in CY2019 is driving the S&P 500 energy sector to be the top performing sector in the S&P 500.  Too fast, too soon?  We will have to wait and see.
  • The VIX is little changed this morning and is currently at 18.71 after closing at 17.8 yesterday
  • SPY February 15 OTM Calls & Puts, QQQ February 15 OTM Calls and EEM February 15 OTM Calls & Puts are some of the most actively traded US options contracts in the US pre-market today
  • UBS believes the VIX has now dropped below fair value, introducing real risks to US stocks.  UBS believes the drop in VIX last week offered the largest discount to other market indicators since 1990 and is a real risk to “quality” stocks
  • US 10-Year Treasury Bonds are higher with yields down -3.61 basis points to 2.7481%
  • The US Treasury 2s-10s Spread has narrowed 1.12 basis points to 0.16%
  • WTI Crude is currently up 3.32% to USD$53.8/bbl with the Brent-WTI spread down USD$-5.6 to USD$7.15/bbl
  • Gold is currently little changed 0.24% to USD$1283.6/oz

Stocks Trending in the News

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

  • Allegheny Technologies Inc. (ATI) reported CY4Q2018 earnings that fell short of analyst estimates despite reporting sales that beat the highest analyst estimate. Allegheny generated USD$1.04bn of sales in CY4Q2018 while analyst estimates ranged between USD$956.0mm and USD$1.03bn. Allegheny’s CY4Q2018 EPS of USD$0.30/share missed analysts’ consensus of USD$0.34/share. Allegheny is rated “Neutral” in our US Large-Cap Global Top Stock Ideas. 
  • Fifth Third Bancorp (FITB) reported fourth quarter adjusted EPS of 69 cents while consensus was for 66 cents.   Fifth Third Bancorp fourth quarter loan loss provisions came at USD$95 million, up from USD$84 million a year earlier.  Fifth Third Bancorp is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Halliburton (HAL) reported fourth quarter EPS from continuing operations of 41 cents while consensus was for 37 cents.  Halliburton fourth quarter revenue came at USD$5.9 billion while USD$5.87 billion was consensus.  Halliburton is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Hugo Boss AG (DB: BOSS) announced CY4Q2018 financials that largely surpassed analyst estimates. Hugo Boss reported CY4Q2018 sales of 783.0mm euros, beating the highest analyst estimates that ranged between 744.0mm euros and 775.0mm euros. Hugo Boss is rated “Attractive” in our European SMID-Cap Global Top Stock Ideas.
  • Johnson & Johnson (JNJ) reported adjusted fourth quarter EPS of USD$1.97 while consensus was for USD$1.95.  Johnson & Johnson fourth quarter revenue came at USD$20.4 billion while USD$20.2 was consensus.  Johnson & Johnson is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
  • SGS SA (SWX: SGSN) reported full-year adjusted operating income that came in-line with the average analyst estimate. SGS generated adjusted operating income of 1.05bn Swiss francs in its fiscal year while analyst estimates called for 1.06bn Swiss francs. SGS’ full-year revenue of 6.71bn Swiss francs fell slightly short of analysts’ consensus, which called for 6.75bn Swiss francs. SGS is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Soitec SA (ENXTPA: SOI) reported revenue growth guidance that surprised investors amid a weaker broad semiconductor industry. Soitec raised its revenue growth outlook to 40%, guidance that Jefferies analysts believe is, “reasonable.” Jefferies cited overwhelming content per device/use cases as the driver for Soitec’s projected revenue growth. Soitec is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas.
  • Stanley Black & Decker (SWK) reported fourth quarter EPS of USD$2.11 while consensus was for USD$2.10.  Stanley Black & Decker fourth quarter revenue came at USD$3.63 billion versus USD$3.62 billion expected.  Stanley Black & Decker sees 2019 EPS coming at USD$8.45-8.65.  Stanley Black & Decker is rated “Attractive” in our US Large-Cap Global Top Stock Ideas. a
  • Steel Dynamics (STLD) reported fourth quarter EPS of USD$1.31 while consensus was for USD$1.21.  Steel Dynamics fourth quarter revenue came at USD$2.9 billion while USD$2.93 billion was consensus.  Steel Dynamics is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Tesla (TSLA) plans acquire batteries for its new China factory from Panasonic (TSE: 6752), according to Nikkan Kogyo.  The new arrangement will be an expansion of their existing relationship.  Presently, Panasonic is the main supplier of batteries to Telsa.  Tesla is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.  Panasonic Tesla is rated “Top Buy” in our Japan Large-Cap Global Top Stock Ideas 
  • Travelers (TRV) reported fourth quarter EPS of USD$2.13 while consensus was for USD$2.08.  Travelers fourth quarter revenue came at USD$7.8 billion while USD$7.7 billion consensus.  Travelers return on equity in the fourth quarter was 10.9%.  Travelers is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • UBS (SWX: UBS) reported USD$13 billion withdrawals by its customers.  UBS said it saw USD$8 billion withdrawn from its wealth management unit while USD$5 billion was withdrawn from its asset management unit.  UBS comments that it does not believe the weakness of the fourth quarter has completely passed.  UBS Travelers is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
     

 

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European Stocks

  • European stocks are declining for a second straight trading session as the twin concerns of decelerating growth in China and ongoing BREXIT saga weighs on investor sentiment
  • The Euro Stoxx 600 is currently down -0.4%, the FTSE 100 has declined -0.68%, the DAX has fallen -0.58%, and the CAC 40 is lower by -0.64%
  • According to Bank of America fund manager surveys, underweight/short British stocks is one of the most popular trades.  HSBC believes this pessimism is overdone and that investors are missing the fact that the FTSE 100 offers a dividend yield of 4.9%, one of the most attractive yields in developed markets.  Just as a point of reference the FTSE 100 dividend yield is more than double that of the S&P 500! 
  • Investor sentiment for European stocks is negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.59x
  • Oil & Gas (-1.21%), Telecommunications (-0.47%), and Basic Resources (-1.23%) stocks are the top performers in the Euro Stoxx 600 today
  • Automobiles & Parts (-0.99%), Food & Beverage (+0.29%), and Utilities (+0.1%) stocks are the worst performers in the Euro Stoxx 600 today
  • 248 stocks in the Euro Stoxx 600 are at 4-week highs while 3 stocks are at 4-week lows
  • 40 stocks in the Euro Stoxx 600 are overbought while 2 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 15.94 after closing at 15.39 yesterday
  • EUR€ is currently little changed against the USD$ at 1.1361
  • GBP£ is currently little changed against the USD$ at 1.2904
  • CHF is currently little changed against the USD$ at 1.0036
  • German 10-Year Bunds are higher with yields down -0.7 basis points to 0.248%
  • UK 10-Year GILTs are flat with yields little changed 0 basis points to 1.323%

Asian Stocks

  • Asia stocks close negative in overnight trading as investors digest yesterday’s disappointing CY2018 China GDP data release
  • The Nikkei 225 finished down --0.47%, the Hang Seng ended down -0.7%, the Hang Seng China Enterprise declined -0.93%, and the CSI 300 was -1.33%
  • Investor sentiment for Japanese stocks finished negative with the advance/decline ratio for the Nikkei 225 closing at 0.36x
  • 151 stocks in the Nikkei 225 hit 4-week highs while 0 stocks reached 4-week lows
  • 1 stock in the Nikkei 225 closed overbought while 0 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 0.25x
  • 28 stocks in the Hang Seng hit 4-week highs while 1 stock 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 flat with yields little changed 0 basis points to -0.167%
  • Japan 10-Year Government Bonds are higher with yields down -0.5 basis points to 0.003%
  • JGBs 2s-10s Spread has narrowed 0.5 basis points to 0.17%
  • JPY¥ is currently down -0.255% against the USD$ to 109.39

 

*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 182 3.43 -11 -5 -0.91% -0.88%
Goldman Sachs Group Inc/The 98 2.14 -18 -12 -1.3% -4.73%
Wells Fargo & Co 45 1.14 -8 -17 0.67% 0.47%
Exxon Mobil Corp 33 1.57 -11 -4 -11.15% -21.69%
QUALCOMM Inc 29 1 -3 -11 -1.56% 8.27%

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
JPMorgan Chase & Co 182 3.43 -11 -5 -0.91% -0.88%
Mastercard Inc 7 3.29 2 24 -0.06% 4.55%
Caterpillar Inc 7 3 0 3 -0.5% 2.2%
Berkshire Hathaway Inc 26 3 -1 0 -0.46% -0.91%
NextEra Energy Inc 12 2.71 0 -3 0.81% 4.42%

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 14.15 60.71% 15.85 70.44% 1.12 64.09% -14.32 1.98% -8.5 1.59%
QQQ 19.5 62.3% 19.84 66.67% 1.02 52.98% -15.1 1.19% -13.22 0.4%
IWM 18.39 70.24% 18.01 71.43% 0.98 33.33% -9.19 3.97% -8.56 0.4%
FEZ 14.46 38.49% 15.37 49.21% 1.06 71.43% -5.65 7.94% -3.86 6.35%
EEM 17.37 30.16% 18.81 42.06% 1.08 89.48% -0.38 50.79% -4.68 6.75%

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
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
EDWARDS LIFESCIENCES CORP EW Health Care Health Care Equipment & Supplies 5.68% 9.73% 41.17%
OLD DOMINION FREIGHT ODFL Industrials Road & Rail 4.8% 6.65% 2.07%
LULULEMON ATHLETICA INC LULU Consumer Discretionary Textiles, Apparel & Luxury Goods 4.66% 14.03% 64.62%
FISERV INC FISV Information Technology IT Services 4.36% 4.9% 17.72%
ALIGN TECHNOLOGY INC ALGN Health Care Health Care Equipment & Supplies 3.43% 10.45% -2.04%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
FORTINET INC FTNT Information Technology Software -3.0% -3.85% 46.35%
MELLANOX TECHNOLOGIES LTD MLNX Information Technology Semiconductors & Semiconductor Equipment -1.22% -3.15% 24.49%
PREMIER INC PINC Health Care Health Care Providers & Services -1.06% 0.94% 28.68%
SUN COMMUNITIES INC SUI Real Estate Equity Real Estate Investment Trusts (REITs) -0.83% 1.32% 16.3%
EXELIXIS INC EXEL Health Care Biotechnology -0.75% -4.78% -32.66%

Source: S&P Capital IQ, StockDio

Top Short Winners and Losers

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Winners Ticker Sector Industry 1D Return 5D Return YTD
ESPERION THERAPEUTICS INC ESPR Health Care Biotechnology -2.09% -1.96% -43.48%
PLANTRONICS INC PLT Information Technology Communications Equipment -1.92% 1.03% -35.82%
MATTEL INC MAT Consumer Discretionary Leisure Products -1.83% 1.54% -25.29%
ROKU INC ROKU Consumer Discretionary Household Durables -1.57% 3.5% -23.95%
GENERAL ELECTRIC CO GE Industrials Industrial Conglomerates -0.88% 1.33% -65.72%
 
Losers Ticker Sector Industry 1D Return 5D Return YTD
BANK OZK OZK Financials Banks 14.98% 20.38% -38.51%
VISTEON CORP VC Consumer Discretionary Auto Components 6.45% 14.97% -55.07%
SANDERSON FARMS INC SAFM Consumer Staples Food Products 6.37% 7.44% -9.09%
SHAKE SHACK INC SHAK Consumer Discretionary Hotels, Restaurants & Leisure 5.88% -2.8% 12.29%
VIKING THERAPEUTICS INC VKTX Health Care Biotechnology 5.86% 5.38% 67.29%

Source: S&P Capital IQ, StockDio

Cryptos

  • Cryptocurrency prices fell slightly lower overnight as the price of Bitcoin (BTC) dropped 0.28% over the last 24 hours to USD$3,574.31. TRON (TRX) and Monero (XMR) were among the few positive coins in overnight trading, appreciating 2.91% and 1.67% in the last 24 hours to USD$0.025844 and USD$45.04, respectively. Binance Coin (BNB) also moved against the broader crypto market decline, 0.22% in the last 24 hours to USD$6.53, amid the success of its Binance Blockchain Week in Singapore. Cardano (ADA) is the worst performing major coin in the day’s trading, down 1.32% in the last 24 hours to USD$0.042720.  
  • A new report published by the Bank for International Settlement (BIS) finds that problems in Bitcoin (BTC) will only be solved if the network departs from a proof-of-work (PoW) verification protocol. As per the report published on Monday, “Simple calculations suggest that once block rewards are zero, it could take months before a Bitcoin payment is final, unless new technologies are deployed to speed up payment finality.” The report goes on to discuss that, although second-layer network solutions like the Lightning Network may help scaling, “the only fundamental remedy would be to depart from proof-of-work.” The report notes that such a departure from PoW would likely come from social coordination or institutionalization.  
  • A report published by crypto analytics firm Diar indicates that on-chain Ethereum (ETH) transaction value hit an all-time high in December 2018. Users conducted transactions worth 115mm ETH in December 2018, the largest monthly total excluding activity following a hard fork caused by a DAO hack in 2016. The US dollar value of ETH on-chain transactions in December 2018, however, recorded a 22-month low of USD$815mm, down from USD$1.1bn a year prior.  
  • De Nederlandsche Bank (DNB), the Dutch central bank, and the Netherlands Authority for the Financial Markets, the country’s financial regulator, are planning a regulatory framework that could introduce a licensing scheme for domestic cryptocurrency exchanges and wallet service providers. A joint report published by the two Dutch authorities cites, “high financial crime risks,” as reasoning for the licensing scheme pertaining to domestic cryptocurrency industry. 

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
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 Travelers Companies, Inc. TRV 1/22/2019 Earnings Release Date US Large-Cap: C
Stanley Black & Decker, Inc. SWK 1/22/2019 Earnings Release Date US Large-Cap: C, US Industrials: C
Allegheny Technologies Incorporated ATI 1/22/2019 Earnings Release Date US Large-Cap: C
F.N.B. Corporation FNB 1/22/2019 Earnings Release Date US Large-Cap: C
Johnson & Johnson JNJ 1/22/2019 Earnings Release Date US Large-Cap: B
Fifth Third Bancorp FITB 1/22/2019 Earnings Release Date US Large-Cap: D
Halliburton Company HAL 1/22/2019 Earnings Release Date US Large-Cap: D
Steel Dynamics, Inc. STLD 1/22/2019 Earnings Release Date US Large-Cap: C
Prologis, Inc. PLD 1/22/2019 Earnings Release Date US Large-Cap: D
Zions Bancorporation, National Association ZION 1/22/2019 Earnings Release Date US Large-Cap: C
Interactive Brokers Group, Inc. IBKR 1/22/2019 Earnings Release Date US Large-Cap: D
TD Ameritrade Holding Corporation AMTD 1/22/2019 Earnings Release Date US Large-Cap: B
Capital One Financial Corporation COF 1/22/2019 Earnings Release Date US Large-Cap: C
Waters Corporation WAT 1/22/2019 Estimated Earnings Release Date US Large-Cap: C
The Charles Schwab Corporation SCHW 1/22/2019 Estimated Earnings Release Date US Large-Cap: C
Lam Research Corporation LRCX 1/22/2019 Estimated Earnings Release Date US Large-Cap: C, US Information Technology: C
Amphenol Corporation APH 1/22/2019 Earnings Release Date US Large-Cap: A, US Information Technology: A
Aspen Technology, Inc. AZPN 1/22/2019 Earnings Release Date US Large-Cap: C, US Information Technology: C
Hess Corporation HES 1/22/2019 Estimated Earnings Release Date US Large-Cap: F
Hexcel Corporation HXL 1/22/2019 Earnings Release Date US Large-Cap: B, US Industrials: B
Jefferies Financial Group Inc. JEF 1/22/2019 Estimated Earnings Release Date US Large-Cap: D
The Procter & Gamble Company PG 1/22/2019 Estimated Earnings Release Date US Large-Cap: B, US Consumer Staples: B
Texas Instruments Incorporated TXN 1/22/2019 Earnings Release Date US Large-Cap: A, US Information Technology: A
Wintrust Financial Corporation WTFC 1/22/2019 Estimated Earnings Release Date US Large-Cap: C
Xilinx, Inc. XLNX 1/22/2019 Earnings Release Date US Large-Cap: B, US Information Technology: B

Source: S&P Capital IQ

 

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