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Quantamize End of Day Update March 27

Mar 27, 2018

US Market Recap

After opening higher today, US markets reversed and closed broadly lower. A sell-off in technology was driven by reports that President Trump’s administration may consider tighter restrictions on Chinese investment into US technology that is deemed vital to national interests. Last week’s trade actions between the US and China may have magnified the negative market response to this news. The VIX fell to 20.36 at midday, but erased losses throughout trading, and rose to 22.55 (+7.23%) by the close. The advance/decline ratio for the S&P 500 slid from 0.74 midday to 0.20 (102 advances and 401 declines). Both developments are indicators of the increasing investor uncertainty throughout today’s session.

US consumer confidence in March came in 2.3 points lower m/m (127.7 vs 130.0). However, February’s consumer confidence levels were the highest since November of 2000. The S&P CoreLogic Case-Shiller 20-City Composite Home Price Index showed that housing prices in all 20 of the metropolitan areas studied increased by an average of 6.4% y/y.

Technology continued to produce some of the worst performing stocks in the US markets. Social media tech stocks such as Twitter (-12.28%), Facebook (-5.30%), and Snap Inc (-1.01%) declined today. Semiconductors were also heavy losers with Micron Technology (-5.64%), Lam Research (-5.83%), and Applied Materials (-5.34%) falling sharply.

The S&P 500 was down 1.73%, moving gradually lower throughout the day. The two worst performing sectors last week, information technology and financials, declined 3.47% and 1.98% respectively today. Disappointing returns in semiconductors (-3.90%) and banking (-2.38%) weighed on each sector. Consumer stocks were broadly higher midday but closed mixed. Consumer staples were effectively flat, edging 0.08% higher while consumer discretionary fell by 1.92% due to declines in retail (-2.92%). Utilities (+1.46%) were the best performing sector in the S&P 500.

The Nasdaq Composite index was a significant laggard, with stocks in the index falling 2.93%. A rout in technology pushed the index lower, and 6 of the worst performing stocks in the S&P 500 today are also listed on the Nasdaq.

Russell 2000 stocks slid and were off 1.95% as small-cap stock stocks underperformed the broader market. Utilities (+0.20) were the biggest outperformer and were the only sector with positive returns in the Russell 2000.  Consumer stocks were broadly lower as consumer staples and consumer discretionary declined 0.06% and 1.47%, respectively. Energy was the worst performing sector, led lower by losses in coal (-3.61%), crude (-3.91%), and oil well (-4.02%) stocks.

Stocks Trending the News

US Courts ruled that ALPHABET (GOOGL) violated ORACLE’s (ORCL) copyrights by using Oracle’s Java code in its Android mobile devices. Oracle is seeking $8.8 billion in damages, but it is still uncertain what the court will award. Shares of Alphabet closed down 4.47% today, while shares of Oracle closed down 2.37%.

US drivers are suing BMW (BMW.GR) for allegedly building cars that cheated diesel-emissions tests. BMW becomes the sixth car company that has been accused of cheating emissions tests. BMW shares closed up 0.70% today in Europe.

Wall Street is not taking too kindly to BROOKFIELD PROPERTY PARTNERS’ (BPY) bid for GGP INC. (GGP), as they feel the $23.50 bid is inadequate. Shares of GGP closed down 5.33% and closed at $20.08/per share. Brookfield Property Partners shares closed down 1.03%.

FACEBOOK (FB) CEO, Mark Zuckerberg, will testify in front of the US House Energy and Commerce Committee. This is after Zuckerberg said he will not appear in front of UK’s Parliament. Shares of Facebook closed down 4.90%.

GENERAL ELECTRIC (GE) shares rallied 4.27% today, on rumors that Warren Buffet is considering purchasing a stake in the company.

LULULEMON ATHLETICA (LULU) reported 4Q Adjusted EPS of $1.33, beating estimates of $1.27. Reported 4Q Revenues of $928.8 million, beating estimates of $912.4 million. Lululemon shares are up 5.41% Post-Market.

NETFLIX (NFLX) has started a controversy in Brazil after adding a show that was based on a multi-year corruption investigation known as Carwash. There is a #DeleteNetflix twitter campaign currently going on in Brazil. Netflix shares fell 6.14% today.

NVIDIA (NVDA) shares fell 7.76% after announcing that the company will be suspending its self-driving vehicle testing. This is coming after the fatality caused by Uber Technologies self-driving testing.

TESLA (TSLA) shares are falling today after the company is under investigation by the US National Transportation Safety Board for a Tesla car crash. Analysts are also concerned that the company will not meet its production targets for its Model 3 sedan. Tesla shares closed down 8.22% today.S&P 500 Gainers

  • GE +4.27%
  • PCG +2.50%
  • DRE +2.40%
  • XEL +2.20%
RTY 2000 Gainers
  • ANTX +12.96%
  • RYM +8.53%
  • KALA +7.77%
  • BBGI +6.31%
S&P 500 Laggards
  • NVDA -7.76%
  • ADBE -6.60%
  • NFLX -6.29%
  • LRCX -5.745
RTY 2000 Laggards
  • LFIN -41.50%
  • MGNX -18.37%
  • SGMO -15.74%
  • OSTK -14.97%
Rates & Commodities


US 10-Year yields fell to 2.775%, down from 2.845% on the open. The US 30-Year yield fell to 3.026%, down from 3.082% on the open. US markets had a risk-off sentiment today, in response to President Trump's comments on Chinese investments in US technology companies, sending risk assets lower. 2-Year fixed swap rates fell from 2.611% at yesterdays close to 2.544% today.

The US Dollar was stronger against all of the G10 currencies besides the Japanese Yen, with the Dollar Index (DXY) up 0.39%. USDJPY trading at 105.32, down 0.08% at 5 PM.

WTI Crude Oil is trading at $65.53/barrel down 0.50% today, as WTI continues to hold at the $65/barrel level. Energy investors should keep an eye out for the DOE’s Weekly Petroleum Status report which will be released tomorrow night. NYMEX Gold closed at $1,354/oz, up 0.38% today. Gold has rallied 2.86% over the past week, as risk-off sentiment has swept the markets.


Bitcoin was positive today, up 0.58%, and trading back over $8,000. The other major cryptocurrencies were lower, with Ethereum and Litecoin both down over 3%. EOS had a sharp rally, up 10.67%. News was relatively light today, with the only major headline being Coinbase is planning to support ERC20 coins on the exchange, (see today's Morning Quant Ride report).

EU Market Recap

Following disappointing returns yesterday, European equities traded broadly higher. Today’s returns were the biggest 1-day increase in regional markets in more than 6 weeks. Easing trade tension between the US and China lifted markets in the region.

Ewald Nowonty, a member of the ECB Governing Council, offered hawkish sentiment regarding the ECB’s future QE policy stating that “if things continue as they are, [the] ECB will be able to reduce asset purchases significantly”.

The European Commission is reportedly discussing options for addressing the budget deficit created by Brexit. Plans include diverting profits from the central banks of the 19 EU member nations, raising an estimated $56 billion to help fund the EU over the next 7 years.

The Euro Stoxx 600 closed 1.18% higher today. Market breadth for the index was positive, with 89% of stocks in the Euro Stoxx 600 advancing (536 advances and 60 declines). Technology (+1.89%) was the biggest outperformer, in contrast to poor returns in the sector yesterday. Basic resources (+1.52%) performed well today as returns in chemicals (+1.74%) lifted the sector higher. The healthcare (+1.65%) and industrial goods (+1.64%) sectors also outperformed the overall Euro Stoxx 600 index. All the sectors in the Euro Stoxx 600 finished in positive territory today, with retail (+0.55%) being the biggest laggard.

Regional markets were in-line with broader European markets. The FTSE 100 rebounded by 1.54% after sinking to a 15-month low yesterday. The DAX advanced by 1.60%, though it is still down nearly 11% since the end of January. The CAC40 rose by 0.93%.EU Gainers

  • LN +6.7%
  • GR +4.9%
  • FP +4.0%
  • NA +3.6%
EU Laggards
  • LN -7.0%
  • B.SS -5.1%
  • LN -4.8%
  • FP -3.1%