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Quantamize Afternoon Market Update April 3

Apr 03, 2018

US Markets Midday Review

US equities are higher at midday, in sharp contrast to steep declines during yesterday’s trading. Investor sentiment has improved significantly in comparison to yesterday as markets further digest US-Chinese trade tensions. The sell-off in technology has slowed, though the sector trails the advances in the broader market. An S&P 500 advance/decline ratio of 3.69 (395 advances and 107 declines) and the VIX receding to 22.25 (-5.80%) are both indicators of improving investor disposition.   

Automotive sales for US manufacturers rose in March with the sales of General Motors (+16%), Ford (+3.4%), and Fiat Chrysler (+14%) all growing on a Y/Y basis. US auto sales outperformed those of various Japanese brands as Toyota increased by only 3.5% in March, while Nissan’s sales declined by 3.6%.

The S&P 500 has advanced by 0.33%. All of the sectors in the S&P 500 are in positive territory today, in direct opposition to midday yesterday. Technology continues to be a laggard, as information technology (+0.13%) and telecommunications (+0.17%) are the two worst performing sectors in the S&P 500. Semiconductors are 1.02% higher today, reversing a recent trend of disappointing returns. Materials (+0.77%) are the best performers in the S&P 500.  Consumers stocks are broadly higher with consumer discretionary and consumer staples rising 0.55% and 0.76%, respectively. Strong returns in footwear (+2.26%) and tobacco (+2.01%) lifted their respective sectors higher. Healthcare and energy were in-line, both rising by 0.55%.

Russell 2000 stocks are up 0.82%, as small-cap stocks outperform the broader market. Technology is the worst performing sector relative to the Russell 2000, gaining only 0.64%. Consumer stocks advanced with consumer discretionary rising 1.03%, and consumer staples advancing 0.88%. Energy and materials are both more than 1% higher at midday. No sector in the Russell 2000 is posting negative returns.

The Nasdaq Composite has edged 0.08% higher, though technology continues to underperform. FAANG stocks are mostly lower with Facebook (-0.48%), Apple (-0.31%), Amazon (-0.11%), Alphabet (-0.51%) retreating, while only Netflix (+0.31%) is posting positive returns. Twitter (-2.50%) and Snap Inc (-3.60%) have also moved lower as, along with Facebook, social media technology stocks continue to offer weak returns.

Stocks Trending in the News

CELEGENE (CELG) shares are down 2.55% today on news that COO Scott Smith will be leaving the company.

JPMORGAN CHASE (JPM)’s asset management is looking to raise $250 million to start a special situations group. JPMorgan shares are up 0.44%.

RBC analyst, Glenn Novarro, sent JOHNSON & JOHNSON (JNJ) shares higher after a positive note this morning. Novarro believes that Johnson & Johnson will beat revenue estimates for 1Q2018. JNJ shares are up 2.11%.

LOCKHEED MARTIN (LMT) was awarded a $247.5 million NASA contract to build a supersonic jet. Lockheed Martin shares are up 0.55%.

PROCTER & GAMBLE (PG) is considering purchasing PFIZER (PFE)’s Consumer Unit. Procter & Gamble shares are up 0.54%, while Pfizer shares are up 0.74%.

TESLA (TSLA) produced 2,020 Model 3 cars in the last week of March. Tesla’s goal was to produce 2,500 cars. Elon Musk said that there will be an acceleration over the next few months to meet the company’s goals. Tesla shares are up 4.01%. 

S&P 500 Gainers

  • UAA +4.25%
  • ALK +3.12%
  • FL +2.90%
  • UAL +2.89%
Russell 2000 Gainers
  • ALNA +15.68%
  • FLX +12.41%
  • EHTH +10.84%
  • CLXT +9.05%
S&P 500 Laggards
  • VIAB -4.58%
  • AYI -2.89%
  • CERN -2.59%
  • TTWO -2.14%
Russell 2000 Laggards
  • ISCA -11.02%
  • JNCE -9.41%
  • HF -7.68%
  • MXL -6.28%

Latin American Equities

Latin America equities are trading higher today with Brazil’s Ibovespa up 54bps, Mexico’s Mexbol up 76bps and Argentina’s Merval up 38bps. LatAm markets seem to be trading with a positive bias following the buying today in US equities. News was mixed in the LatAm region today. Brazil’s industrial production increased +0.2% in February vs. a forecast of an increase of 0.6%. UBS said today that Mexican equities should rise irrespective of the election result and that more inflows into LatAm equities should occur, continuing trends from Q1 of this year.

Rates & Commodities Review

US bonds are lower to start today with bond yields higher across the curve. The 10-Year yield is moderately higher at 2.768% from today’s open of 2.750% and the US 30-Year Yield and is back above 3.0% at 3.006% from today’s open of 2.971%. The USD$ is moderately higher as of midday, currently at 90.19, up 18bps. The USD$/JPY¥ pair continues to be higher and is up 55bps at 106.48. Additionally, the USD$ is stronger against the CHF by 44bps (.9593). North American currencies, CAD (1.278) and MXN$ (18.20) are stronger against the USD$ by 24bps and 96bps respectively as a NAFTA deal appears to be progressing between the three nations. Gold and silver remain lower from this morning and are down 66bps at USD$ 1332.38/ounce, and down 113bps at USD$ 16.41 respectively. Platinum (USD$ 921.77) -1.36% and palladium (USD$ 932.32) -0.49%. are following, as metals are underperforming in today’s risk-on attitude. Lastly, WTI Crude oil remains up on the day is now at USD$ 63.35/barrel, up 54bps. UAE Minister Suhail Al Mazrouei has said that the global deal to rein in oil output has reduced 85% of the problem and that the world economy is benefitting from the supply cuts.

Cryptocurrency Review

Major cryptocurrencies remain higher as of midday, after trading higher this morning. Bitcoin is trading at USD$ 7,445.92 up 5.94%, Ethereum is following at USD$ 406.35, up 4.47% and Ripple at USD$ .5400 up 8.78%, to round out the top three. Crypto news is very light on the day. Liechtenstein is reportedly hoping to avoid excessive blockchain regulation according to the Prime Minister, Adrian Hasler. Liechtenstein has just recently proposed a bill called “The Blockchain Act” that will avoid creating regulations that are excessive and lacking in practical relevance. It will be interesting to see if other countries follow Liechtenstein’s lead.