blog

Latest from the Quantamize Blog

Quantamize End of Day Market Update April 6

Apr 06, 2018

US Market Recap

US equities closed sharply lower. Renewed Sino-American trade tensions and a disappointing US jobs report for March drove today’s market negativity. Investor sentiment was forced down further by Treasury Secretary Steven Mnuchin’s remark that “there is the potential of a trade war”. NEC director Larry Kudlow attempted to assuage trade fears when he said “back-channel discussions” have been held regarding a resolution. The VIX jumped to 21.49 (+13.46%) as US financial markets continue to be rattled.

The S&P 500 fell 2.19%, snapping a 3-day winning streak. Only 12 stocks in the S&P 500 advanced (492 declines), an indication of a growing risk-off mentality. Industrials declined 2.73% and were the worst performers. Information technology and telecommunications fell by 2.53% and 1.46%, respectively, reversing from yesterday’s positive trading. All sectors in the S&P 500 finished in negative territory. Financials, materials, healthcare, and consumer discretionary advanced losses from midday, all finishing more than 2% lower. Utilities (-0.71%) were the best performers.

Losses in the Nasdaq Composite (-2.28%) outpaced the broader market, and technology underperformed significantly. Semiconductors retreated by 3.20%, building on lower mid-session levels. Social media technology stocks moved lower, with Facebook (-1.34%), Snap Inc (-0.97%), and Twitter (-1.89%) declining today.

Russell 2000 stocks ended 1.92% down, as small-cap stock moderately outperformed the broader market. Energy (-2.97%) and healthcare (-2.54%) closed as the two worst performers, as sectors in the Russell 2000 mostly held positioning within the index. Technology fell by 2.04%, relatively in-line with the sector’s performance in the broader market. Consumer staples were the best performers, though finished with negative returns.

Stocks Trending the News

FACEBOOK (FB) is revising its advertising policies and will make it harder to create fake accounts. Facebook shares fell 1.34%.

MERCK (MRK) and INCYTE (INCY)’s cancer drug, epacadostat, failed in the trial stage. Merck shares fell 2.15%, and Incyte shares fell 22.93%.

SUPERVALU (SVU), a grocery wholesaler, is considering a potential sale. Supervalu shares rose 9.33%. 

S&P 500 Gainers

  • VTR +0.76%
  • ULTA +0.65%
  • CPB +0.57%
  • WELL +0.51%
S&P 500 Laggards
  • INCY -22.93%
  • NKTR -7.46%
  • XLNX -6.22%
  • DOV -4.61%
RTY 2000 Gainers
  • PRCX +12.88%
  • FRPT +10.06%
  • DCPH +9.89%
  • SVU +9.33%
RTY 2000 Laggards
  • ALNA -19.50%
  • SNDX -18.74%
  • AKCA -12.58%
  • EVI -10.23%
Cryptocurrencies

Major cryptocurrencies have posted losses over the past week. Bitcoin is trading at USD$ 6,632.98 down from USD$ 6859.30 a week ago and a high of USD$ 7529.83 hit on Tuesday. Ethereum is down to USD$ 370.10, from USD$ 383.65 a week ago and a high of USD$ 418.97 hit on Tuesday as well. Lastly, Ripple is at USD$ 0.4722 from USD$ .5022 a week ago and an earlier high of USD$ .5602 this week to round out the top three. OmiseGO, Verge, and Ontology are the only positive cryptocurrencies in the top 25 by market capitalization, up 9.08% and 13.58% respectively. News was light today. However, Indian cryptocurrency exchanges are looking to fight back against India’s central bank. This follows news that the central bank is disallowing companies over which it has oversight on to work with cryptocurrency services.

Latin American Equities

Latin American equities were mixed today following the decline in US markets. Brazil’s Ibovespa was down 71bps, Argentina’s Merval was down 34bps and Mexico’s Mexbol was up 12bps. As of market close, Brazil’s former President Lulu has still not turned himself into the police as his court-ordered deadline has expired. His final emergency appeal was rejected Friday afternoon. Lula has been sentenced to a 12-year prison sentence for corruption and money-laundering and Brazilian equity markets may further react next week following any developments on this issue. Brazil’s finance minister Henrique Meirelles said he will be stepping down from his position and will consider running for President. With Lula out of the picture, a frontrunner for the Presidency is now unclear. Mexican stocks posted their best week since December 2016 on optimism that a NAFTA deal will reach an initial resolution as early as next week. Mexican equities have risen ~4% over the past 5 days. Analysts from Itau are warning that risks remain on Mexican equities; the potential for earnings and economic growth to slow before the July election. Additionally, the frontrunner Loprez Obrador, is seen as unfriendly to business.

Rates & Commodities

US bonds traded higher today as the 10-Year yield closed at 2.773%, lower from today’s open of 2. 825% and the US 30-Year Yield closed at 3.019% from today’s open of 3.067%. Jerome Powell spoke after midday and said the case remains for further rate hikes and he still sees some labor market slack. The USD$ gave back some gains today, and ended the week at 90.14, down 34bps on the day. In a risk-off sentiment today, the USD$ finished lower against the JPY¥ by 15bps at 106.94. Precious metals finished the day mixed with Gold at (USD$ 1333.54/ounce) and Platinum (USD$ 916.36/ounce), higher by 53bps and 42bps respectively. Palladium was down 42bps at (USD$ 903.65) and silver finished down 35bps at USD$ 16.38 Lastly, WTI Crude oil closed sharply lower, down 252bps at USD$ 61.94/barrel.

EU Market Recap

European equities broadly declined, but outperformed US markets. Positive sentiment from yesterday failed to carry over, as Sino-American trade tension drove equities in the region down. China has demanded EU cooperation in combating harsh US protectionist trade actions. European autos underperformed significantly and German manufacturers, including BMW (BMW.GR) and Daimler AG (DAI.GR), are concerned that subsidiaries in China will be negatively impacted by US proposed tariffs.

The Euro Stoxx 600 fell 0.35% but rose 1.07% this week. Autos & parts (-1.76%) were the biggest laggard today, followed by basic resources (-1.61%). Trade actions between the US and China may provide headwinds for both sectors globally. Technology fell 0.49%, reversing from yesterday’s higher trading. Media (+0.56%) offered relatively strong returns. Defensive utilities (+0.33%) were outperformers

Regional markets declined broadly with the FTSE 100 (-0.22%), Dax (-0.52%), and CAC40 (-0.35%) all retreating.

EU Gainers

  • LN +10.1%
  • SS +9.9%
  • IM +6.9%
  • LN +6.3%
EU Laggards
  • SW -5.6%
  • NA -5.3%
  • NO -4.2%
  • SM -2.4%