Global stocks rallying to start the week as focus shifts back to historically strong 3Q earnings season

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by QuantalyticsResearch

US Stocks

  • Global stocks are rallying to start the week as markets shift their focus back to a strong C3Q earnings season for US stocks
  • US stocks index futures are pointing to be a bounce back in US markets to start the week with the Dow Jones minis +0.53%, S&P500 minis +0.88% and Nasdaq 100 minis +1.18%
  • The VIX is little changed this morning and is currently at 23.51 after closing at 24.16 last week
  • On Friday, the VXX ETN saw inflows of USD$117.59mm — the VXX is an ETN that gives investors “long” exposure to the VIX through the use of VIX futures
  • SPY November 16 OTM Puts, EEEM November 16 OTM Puitgs, and GE January 2019 OTM Puts are the most heavily traded options contracts in US pre-market trading
  • US 10-Year Treasury Bonds are lower with yields up 0.76 basis points to 3.0831%
  • The US Treasury 2s-10s Spread has widened 0.35 basis points to 0.27%
  • WTI Crude is currently up 0.39% to USD$67.59/bbl with the Brent-WTI spread down USD$-0.88 to USD$9.29/bbl
  • Gold is currently down -0.36% to USD$1229.1/oz

Stocks Trending in the News

  • Apple (AAPL) is reinitiated as “Buy” at Jefferies with a price target of USD$265, implying an additional 23% upside from current price levels.  At the moment, Apple has 30 buys, 16 holds and 2 sells across different Street analysts.  Apple is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Info Tech Global Top Stock Ideas.
  • BASF SE (DB:BAS) has its price target cut to 95 Euros from 105 Euros at Credit Suisse.  The investment bank keeps its “Outperform” rating for BASF SE but after the recent 3Q earnings missing, Credit Suisse remains concerned aboutr the increasing challenges to the demand outlook for BASF SE.  BASF SE is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • HSBC Holdings (LSE:HSBA) reports C3Q results which came in ahead of Street expectations.  Adjusted revenues grew 9% Y/Y in the quarter while costs only grew +2% Y/Y for HSBC in C3Q.  The improvement in top-line, combined with a continued focus on cost cutting is boost investor sentiment for the stock.  HSBC is rated “Unattractive” in our United Kingdom Global Top Stock Ideas.
  • Red Hat (RHT) is set to be acquired by IBM (IBM) in a USD$33 billion takeover, the second-largest technology deal ever.  The deal is an all cash deal.  IBM hopes the acquisition of Red Hat helps it catch up with cloud computing market leaders Amazon (AMZN) and Microsoft (MSFT).  Red Hat is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Info Tech Global Top Stock Ideas.  IBM is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Info Tech Global Top Stock Ideas.
  • Sony’s (TSE:6758, ADR:SNE) Playstation 4 (PS4) unit is enjoying an unusually strong product cycle, selling more than 4 times the number of consoles than Microsoft’s XBOX One.  Sony’s position in the console gaming industry should help the company weather the upcoming shift to cloud gaming, where games are delivered via a cloud console, rather than on a local piece of hardware.  Sony PS4 has sold 84 million unites vs. 39 million units for the Microsoft XBOX One as a point of reference.  Sony is rated “Neutral” in our Japan Large-Cap Global Top Stock Ideas.
  • Tencent (SEHK:700, ADR:TCEHY) subsidiary Futu Securities, an online brokerage focused on Chinese and Hong Kong investors which filed from an IPO last week, is seeing more competition in public markets after Tiger Brokers, a Chinese online brokerage backed by Jim Rogers, has announced a USD$200mm IPO.  Tencent is rated “Attractive” in our China All-Cap Global Top Stock Ideas.
  • European auto stocks Volkswagen (XTRA:VOW3)Daimler AG (XTRA:DAI) and BMW(DB:BMW) are up on news that the National Development and Reform Commission, the top economic planning committee in China, is considering cutting the sales tax on new car purchases in half.  Volkswagen is rated “Neutral”, Daimler is rated “Unattractive, and BMW is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
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European Stocks

  • European stocks appear to have found a “bid” to start the week following better than expected earnings from HSBC Holdings (HSBA LN) and a rally in European auto stocks following news that Chinese officials are considering cutting the sales tax applied to new car sales in half
  • German political landscape further upset as CDU and SPD lose big in Hesse election.  Greens and AfD gain, but AfD less than expected.  Merkel, after 2 decades as chair of the CDU, will resign as chair in December
  • The Euro Stoxx 600 is currently up +0.96%, the FTSE 100 is higher by +1.32%, the DAX has advanced +1.21%, and the CAC 40 has risen +0.26%
  • Investor sentiment for European stocks is positive with the advance/decline ratio for the Euro Stoxx 600 currently at 4.61x
  • Banks (+1.81%), Health Care (+1.65%), and Automobiles & Parts (+1.37%) stocks are the top performers in the Euro Stoxx 600 today
  • Food & Beverage (-0.03%), Personal & Household Goods (+0.16%), and Retail (+0.19%) stocks are the worst performers in the Euro Stoxx 600 today
  • 8 stocks in the Euro Stoxx 600 are at 4-week highs while 161 stocks are at 4-week lows
  • 4 stocks in the Euro Stoxx 600 are overbought while 169 stocks are oversold according to the 16-day RSI Measure
  • VSTOXX, the European stocks equivalent of the VIX, is  moving down this morning and is currently at 21.83 after closing at 23.74 yesterday
  • EUR€ is currently little changed against the USD$ at 1.1388
  • GBP£ is currently little changed against the USD$ at 1.2821
  • CHF is currently down -0.299% against the USD$ to 0.9999
  • German 10-Year Bunds are lower with yields up 3.6 basis points to 0.388%
  • UK 10-Year GILTs are lower with yields up 2.1 basis points to 1.404%
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Asian Stocks

  • Asian stocks finished little changed in overnight trading with traders unsure of directional bias
  • The Nikkei 225 finished down –0.16%, the Hang Seng ended up +0.38%, the Hang Seng China Enterprise declined -0.46%, and the CSI 300 was -3.05%
  • Chinese stocks were the only notable major Asian market which found a directional bias, down, as traders continue to debate the impact of a decelerating outlook for domestic consumer demand
  • Investor sentiment for Japanese stocks finished positive with the advance/decline ratio for the Nikkei 225 closing at 1.21x
  • 1 stocks in the Nikkei 225 hit 4-week highs while 146 stocks reached 4-week lows
  • 0 stocks in the Nikkei 225 closed overbought while 70 stocks 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 1.5x
  • 2 stocks in the Hang Seng hit 4-week highs while 16 stocks reached 4-week lows
  • 0 stocks in the Hang Seng closed overbought while 7 stocks closed oversold according to the 16-day RSI Measure
  • Japan 10-Year Government Bonds are higher with yields down -0.3 basis points to 0.11%
  • JGBs 2s-10s Spread has widened 0.1 basis points to 0.23%
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