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Quantamize End of Day Update April 2

Apr 02, 2018

US Market Recap

US equities extended their sharp losses throughout the day, despite a rally near the close which moved equities off of session lows. Today marked the S&P 500’s worst first trading day of April since 1932. The S&P 500 stayed below its 200-day moving average, which has not happened in any of the 3-previous market sell-offs. This breaks a streak of 442 straight trading sessions above the 200-day moving average support level. Fears about escalation towards a trade war were exacerbated following the announcement by China’s Ministry of Finance that tariffs against the US would go into effect today, which continued to rattle US markets. The rout in technology has not abated.

S&P 500 stocks fell by 2.23%, and all the sectors in the index finished with negative returns. Consumer stocks were among the worst performing in the S&P 500 with consumer discretionary and consumer staples declining by 2.83% and 2.45%, respectively. Disappointing returns in retail (-3.88%), food & staples (-3.16%) and consumer durables (-2.47%) weighed their respective sectors down. Technology continued to move broadly lower, with information technology (-2.48%) and telecommunications (-1.44%) both retreating. Semiconductors (-4.38%), which were significant underperformers last month, have continued to decline sharply. Materials, financials, health care, industrials, and energy held losses from midday, and closed more than 2% lower. Utilities (-0.75%) were again the best performer, though they also fell from midday levels.

The Russell 2000 finished 2.41% lower. All sectors in the Russell 2000 closed with returns of -1.6% or more. Healthcare (-3.47%) was the biggest underperforming sector, due to weak returns in biotechnology (-4.52%) and pharmaceuticals (-4.01%). Energy (-2.98%) and materials (-2.80%) are significant laggards, while technology (-2.57%) continues to recede steeply. Financials (-1.63%) was the best performing sector relative to the Russell 2000 overall return.

Nasdaq Composite equities declined by 2.74% as instability in technology continued to plague US markets. Large-cap computer chip makers were hit hard as losses by NVIDIA (-4.55%), Intel Corp (-6.07%), Applied Materials (-4.89%), and Lam Research (-4.57%) were among the most severe in the Nasdaq Composite. `

Stocks Trending the News

ALLERGAN (AGN) is considering a sale of it’s Women’s Health Unit. The unit has been reportedly valued to be worth more than $5 billion. Shares of Allergan are down 3.57% today.  

CBS Corp (CBS) has reportedly sent an initial bid for VIACOM (VIA) that was below market value. Viacom shares closed down 2.02%, CBS shares closed down 1.34%.

INTEL (INTC) shares are down 6.07% today, on news that APPLE (AAPL) is preparing to create its own chips for Mac computers as soon as 2020. Intel’s chips are currently used in Mac computers. Apple shares closed down 0.66%.

LOGMEIN (LOGM) was initiated as a Buy at Mizuho Securities. The price target is $145, the stock closed today trading at $112.55. LogMeIn shares are up 0.98% after-hours.

OVERSTOCK.COM (OSTK) will not be proceeding with its public offering due to current market volatility. Overstock shares fell 9.38% today.

SPOTIFY (SPOT), the music streaming service, is set to begin publicly trading tomorrow morning. The IPO price has not yet been disclosed.

S&P 500 Gainers

  • HUM +4.42%
  • UNH +1.50%
  • SCG +1.30%
  • MCD +0.86%
RTY 2000 Gainers
  • MNOV +18.88%
  • ALNA +18.60%
  • NC +11.11%
  • CVLT +10.84%
S&P 500 Laggards
  • NKTR -7.05%
  • ALK -6.79%
  • CXO -6.59%
  • TSN -6.22%
RTY 2000 Laggards
  • SNX -18.24%
  • VRTV -18.24%
  • LKSD -18.17%
  • RYTM -14.47%
Rates & Commodities

US bonds rallied today, however, not as much as one might expect in an equity sell-off like today. The 10-Year yield is moderately lower at 2.735% from today’s open of 2.753% and the US 30-Year Yield and is at 2.971% from today’s open of 2.984%. The close of the US 10-Year is the lowest since February 6th. The USD$ is remains higher at the end of the day, currently at 90.04, up 7bps. Most notably, the USD$ gave back earlier gains against the MXN$ (18.24), now only up 30bps. Additionally, the USD$ is weaker by 39bps against the JPY¥ (105.90). Gold and silver are two of the top performing assets today, up 116bps at USD$ 1340.89/ounce, and up 140bps at USD$ 16.60 respectively. Platinum (USD$ 934.15) +0.22% and palladium (USD$ 935.15) -1.92%. are mixed, however, metals overall have performed well today. Lastly, WTI Crude oil is sharply lower amid USD$ strength and a recent surge over the past two weeks and continues to be down 270bps at 63.18/barrel.

Cryptocurrencies

Major cryptocurrencies given back gains as of the end of the day approaches, however, they are still positive over the last 24-hours. Bitcoin is trading at USD$ 7,023.48 still up 1.59%, Ethereum is following at USD$ 384.04, up 0.15% and Ripple at USD$ .4951 up 0.78%, to round out the top three. Notably, Stellar, USD$ 0.233 is up 13.42% on the day. Crypto news remained mostly positive after midday; Blockchain payment startup Bitpay reportedly has raised USD$ 40mm. Bitpay processes bitcoin and bitcoin cash payments for merchants and allegedly has processed close to USD$ 2bn in payments. South Korea’s Capital, Seoul, is developing its own cryptocurrency called the “S-Coin”. The cryptocurrency, will be used in city-funded social benefits programs, says Mayor Park Won-soon, in an interview with CoinDesk Korea. They Mayor has claimed that Seoul will be one of the world’s leaders in the fourth industrial revolution and believes blockchain technology will be consequential in this revolution.

Latin American Equities

Latin America equities are finished the day lower but did not experience the sharp sell-off that US equity markets did today.  Brazil’s Ibovespa finished down 91bps, Argentina’s Merval down 39bps and Mexico’s Mexbol down 57bps. Ten day realized volatility in Argentina finished lower than its 30D realized Vol, however, 10D Vol is noticeably higher than 30D realized Vol in Brazil and Argentina. The USDA FAS has said that imports on wheat and corn are projected to rise from Chile and Peru for the time of 2018-2019. Societe Generale said today that the emerging market bear case is growing on US Fed, and trade-war risks.