US Stocks
- Global stocks are dropping this morning as US treasury yields continue to rally after the yield on the US 10-year hit the highest level since 2011 in yesterday’s trading
- US Federal Reserve Chairman Jerome Powell, during a presentation yesterday, suggested current US interest levels are nowhere near “neutral” — this side comment is what helped fuel the sell-off in US treasuries
- Bloomberg is reporting that Chinese spies were able to successfully hack 30 major US companies, including Amazon (AMZN) and Apple (AAPL), by placing tiny chips on server motherboards produced by Super Micro Computer (SCMI) in China
- US stocks index futures are pointing to a positive open in NY with the Dow Jones minis +0.21% S&P500 minis +0.26% and Nasdaq 100 minis +0.27%
- The VIX is little changed this morning and is currently at 11.78 after closing at 11.61 yesterday
- EEM November 16 OTM Calls, SPY October 5 OTM Calls & Puts, Bank of America (BAC) October 5 OTM Calls and Apple (AAPL) October 5 OTM Calls are the most heavily traded options contracts in the US pre-market
- US 10-Year Treasury Bonds are lower with yields up 2.84 basis points to 3.2097%
- The US Treasury 2s-10s Spread has widened 1.61 basis points to 0.33%
- WTI Crude is currently up 1.57% to USD$76.41/bbl with the Brent-WTI spread down USD$-1.44 to USD$9.79/bbl
- Gold is currently little changed 0.12% to USD$1198.84/oz
- Global oil prices are 4-year highs with WTI now up more than 4% this week alone
Stocks Trending in the News
- Bang & Olufsen (BO DC) shares are falling 3.4% at 140.60 krona after reporting 5mm krona for 1Q ebit, below expectations. Bang & Olufsen maintained full year guidance of 10% revenue growth at ebit margin 7-9% for full year. Bang & Olufsen is rated ‘Neutral’ in our European SMID-Cap Global Top Picks
- Bilibili (BILI) closed 8% higher at $14.37 yesterday after Tencent (700 HK) said it would invest USD$ 300mm in the company. Tencent will hold roughly 12.3% of Bilibili after the transaction is complete. Bilibili came public in March and subsequently rose 70% since then. Tencent closed 2.4% lower in Hong Kong at HKD$308.40
- CNOOC (883 HK) was downgraded at UBS to neutral from buy although the price target of HKD$16.60 was maintained. CNOOC has risen 38% year-to-date and UBS sees the stock as fairly valued after the rise given the 27% increase in Brent crude this year. CNOOC closed 3.5% lower at HKD$1504. CNOOC is rated “Top Buy’ in our China All-Cap Global Top Picks.
- Danske Bank (DANSKE SS) reported that the US Justice Department has launched a money laundering investigation into its Estonian unit. The investigation joins those happening in Estonia and Denmark into Danske Bank’s movement of cash through Estonia. Danske is trading 3% lower at 161.20 krona. Danske Bank is rated ‘Top Short’ in our European Large-Cap Global Top Picks
- Eli Lilly (LLY) said results from an experimental diabetes drug included a 12.7% loss of weight for patients. With that, Eli Lilly will conduct a “very broad” trial to investigate its use for other ailments, including obesity. Eli Lilly is rated ‘Neutral’ in our US Large-Cap Global Top Picks.
- Google (GOOGL) may be investigated by the US Department of Justice according to a report in the NY Post today. The article states Makan Delrahim, the DOJ antitrust chief, told senators Wednesday that he may investigate Google and its Android operating system though there has been no official word from the government. Google (Alphabet) is rated ‘Neutral’ in both our US Large-Cap and US Information Technology Global Top Picks
- Kering (KER FP) shares are falling 5% at 439.70 francs after social media reports speculating that China may increase scrutiny of what its citizens are bringing into China. China is crucial for luxury goods sellers as its millennials are key buyers of goods from Kering and other luxury goods sellers. Kering is rated ‘Attractive’ in our European Large-Cap Global Top Picks
- Nintendo (7974 JP) will release a new Switch console in the second half of 2019, according to a report in the Wall Street Journal. Daiwa upgraded Nintendo to a buy from hold with a price target hike to 55,200 yen from 46,200. Despite the news, Nintendo closed 1.3% lower at 40,790 yen. Nintendo is not rated in our Global Top Picks
- Swedbank (SWEDA SS) shares are falling 2.5% at 201 krona despite comments from the Swedish FSA downplaying the chance for money laundering in its Estonian operations. This comes after a Bloomberg story yesterday highlighting the large flow of funds through Estonia that the regulator seemed to downplay. Swedbank is rated ‘Attractive’ in our European Large-Cap Global Top Picks
European Stocks
- European stocks are declining this morning, as investors continue to assess US Fed Chairman’s Powell’s comments and the impact of higher US Treasury yields on asset allocation
- The Euro Stoxx 600 is currently down -0.84%, the FTSE 100 has declined -1.06%, the DAX has fallen -0.31%, and the CAC 40 is lower by -1.08%
- Investor sentiment for European stocks is negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.27x
- Insurance (+0.94%), Banks (+0.44%), and Oil & Gas (-0.06%) stocks are the top performers in the Euro Stoxx 600 today
- Personal & Household Goods (-2.57%), Real Estate (-2.16%), and Utilities (-1.75%) stocks are the worst performers in the Euro Stoxx 600 today
- 62 stocks in the Euro Stoxx 600 are at 4-week highs while 51 stocks are at 4-week lows
- 25 stocks in the Euro Stoxx 600 are overbought while 23 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 14.23 after closing at 14.61 yesterday
- EUR€ is currently up +0.157% against the USD$ to 1.1496
- GBP£ is currently up +0.332% against the USD$ to 1.2983
- CHF is currently little changed against the USD$ at 1.0085
- German 10-Year Bunds are lower with yields up 5.7 basis points to 0.532%
- UK 10-Year GILTs are lower with yields up 7.9 basis points to 1.654%
Asian Stocks
- Asian stocks closed in the red overnight following the jump in US treasury yields in yesterday’s trading
- The Nikkei 225 finished down -0.56%, the Hang Seng ended down -1.73%, the Hang Seng China Enterprise declined -2.21%, and the CSI 300 was +1.04%
- While Chinese stocks are closed for Golden Week, Hong Kong stocks continue to be under pressure as a strengthening USD$ and improving economic outlook in the United States is leading to a flow of funds into US assets at the expense of Hong Kong and Chinese assets
- Investor sentiment for Japanese stocks finished neutral with the advance/decline ratio for the Nikkei 225 closing at 1.06x
- 34 stocks in the Nikkei 225 hit 4-week highs while 2 stocks reached 4-week lows
- 48 stocks 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 negative with the advance/decline ratio for the Hang Seng closing at 0.11x
- 1 stock in the Hang Seng hit 4-week highs while 7 stocks reached 4-week lows
- 2 stocks in the Hang Seng closed overbought while 2 stocks closed oversold according to the 16-day RSI Measure
- Japan 10-Year Government Bonds are lower with yields up 1.8 basis points to 0.159%
- JGBs 2s-10s Spread has widened 1.2 basis points to 0.27%
- JPY¥ is currently down -0.201% against the USD$ to 114.3
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