Quantamize End of Day Market Update April 11

Apr 11, 2018
US Market Recap

US equities finished mixed, with major indices declining from midday levels. Market sentiment appeared neutral early but turned negative causing equities to fall towards the close. Positive outlook from deflating Sino-American trade pressure was overshadowed by President Trump’s aggressive response to Russia’s defense of Syria, as well as the FOMC meeting minutes for March. The VIX finished down from the open but rose to 20.24 from 19.76 midday.

While the market views the FOMC meeting report as aggressive, it frequently coupled hawkish comments with dovish caveats. The notes mentioned that the FOMC “did not see the steel and aluminum tariffs, by themselves, as likely to have a significant effect on the national economic outlook”, which was followed by concerns that “retaliatory trade actions by other countries, as well as other issues and uncertainties associated with trade policies, [threatens] downside risks for the U.S. economy”.

Policymakers further suggested that they expect tax cuts and increases in federal spending to stimulate an economic “boost”, but were unsure of how big the impact is, or when it takes effect. FOMC members agreed that the “outlook for the economy beyond the current quarter had strengthened in recent months,” but that it may be beneficial to decide on rate hikes in future meetings.

The S&P 500 closed 0.55% lower, underperforming both the Russell 2000 and Nasdaq Composite. Energy rose 1.04%, finishing as the best performing sector in the S&P 500 for the second consecutive session. Real estate was the only other sector in positive territory, gaining 0.20%. Consumer stocks were broadly lower with consumer staples falling 0.22%, and consumer discretionary declining by 0.32%. Technology in the S&P 500 reversed from yesterday’s strong returns, as telecommunications (-1.49%) were the biggest underperformers and info tech retreated by 0.51%. Industrials (-0.75%), materials (-0.78%), and healthcare (-0.86%) were relatively in-line with each other.

The Nasdaq Composite finished down 0.36%, with technology offering relatively middling returns after being a strong outperformer yesterday.

Russell 2000 stocks advanced 0.22%, bucking the negative trend among major US indices. Energy and technology were the two biggest outperformers yesterday. They were again today as energy gained 2.15%, and technology advanced by 0.71%. Healthcare moved 0.48% higher, followed by returns in utilities (+0.37%). Small-cap consumer stocks were mixed as consumer discretionary stocks falling 0.18%, but consumer staples stocks gained 0.57%. Materials (-0.35%) were the worst performers, as aluminum producers continue to weigh the sector down.

Stocks Trending the News

CBS Corp. (CBS) CEO, Les Mooves, may be fired if the merger deal with VIACOM (VIA) falls through. CBS shares fell 2.13%, and Viacom shares fell 2.08%.

DAQO NEW ENERGY (DQ),  a Chinese polysilicon manufacturer, is set to sell 2 Million ADRs. Credit Suisse will be the underwriters of the offering. The proceeds will be used for corporate purposes such as capacity expansion. Daqo shares fell 2.95%.

KeyBanc assumed coverage of EBAY (EBAY), and rated the stock overweight, with a $50 price target. eBay shares rallied 0.61% today.

LONG BLOCKCHAIN (LBCC), formerly known as Long Island Iced Tea Corp., will be delisted from the Nasdaq on Thursday. Long Blockchain was not able to keep its market value above the $35 million market value requirement. Long Blockchain shares fell 37.14% today.

MYLAN (MYL) reaffirmed their guidance for 2018 during its investor meeting today. Mylan shares fell 2.72%.

S&P 500 Gainers

  • MAT +6.58%
  • HLT +6.13%
  • CXO +4.51%
  • EVHC +3.80%
S&P 500 Laggards
  • FAST -6.19%
  • GWW -4.39%
  • AAL -4.34%
  • UAL -4.02%
RTY 2000 Gainers
  • AVAV +17.06%
  • AAOI +14.51%
  • FATE +13.82%
  • ALRN +11.04%
RTY 2000 Laggards
  • QNST -17.69%
  • ALOG -13.22%
  • ARMO -7.33%
  • RGNX -6.42%
Rates & Commodities

US bonds finished slightly higher from today’s open despite a cautious market today. The US 10-Year yield finished at 2.781% from today’s open of 2.772% and the US 30-Year Yield unchanged at 2.994%. The USD$ is at 89.52, lower by 11bps. The USD$ lost gains against the RUB? and is now down by -0.82%. The RUB? hit a low of 65 against the USD$ and is now trading at 62.39. The USD$ is weaker against the safe-haven JPY¥ by 31bps, currently at 106.79, however, surprisingly stronger against the CHF by 14bps at .9577.  All metals finished higher with gold up 94bps at USD$ 1352.18/ounce, silver up 55bps at USD$ 16.67/ounce, palladium up 140bps at USD$965.30 platinum up 21bps at USD$931.83, aluminum up 290bps at USD$2,201/contract, and copper up 168bps at USD$6,945/contract. WTI Crude oil held onto gains today, up 194bps at USD$ 66.78. Oil prices are being supported by tensions in the Middle East. UK Prime Minister May said the UK has moved submarines within range of Syria as of 4PM EST.

Latin American Equities

Latin American equities finished mixed today. Brazil’s Ibovespa was up 73bps, Argentina’s Merval was down 57bps and Mexico’s Mexbol was up 50bps. News was light in the LatAm region today. Newly elected Finance Minister for Brazil, Eduardo Guardia spoke in his first press conference today. He discussed how the government is not seeking to raise Brazil’s tax burden and that the privatization of Eletrobas is a priority.

Cryptocurrencies

Major cryptocurrencies have held onto gains today. All the big five remain higher today. The big five are trading at; Bitcoin USD$6,910.75 +1.00%, Ethereum USD$421.23 +2.65%, Ripple USD$0.5013 +2.01%, Bitcoin Cash USD$652.77 +0.30% and Litecoin USD$114.33 +0.04%. Notably, EOS and NEO are sharply higher today, up 26.56% and 12.0% respectively. Today, JPMorgan received a class action lawsuit alleging that the bank overcharged its credit card customers when they used funds to purchase cryptocurrencies. The damages claimed in the class action lawsuit equate to USD$1mm. ABT Financial, a Canadian firm will be providing banking services to a small group of cryptocurrency startups to understand how to mitigate barriers that exist in the industry. Nasdaq will be delisting Long Blockchain (LBCC) due to not meeting the minimum market capitalization requirement. LBCC is a beverage maker that changed its name from Long Island Iced Team Corp. back in December. Ripple has invested USD$25mm worth of its XRP token in a blockchain venture fund. The fund, Blockchain Capital Parallel IV is the first fund to accept capital calls in cryptocurrency. Lastly, it has been reported that corporations are bypassing South Korea’s ICO regulations by establishing cryptocurrency subsidiaries and subsequently launching ICO’s outside of the country. Corporations have been doing this in Japan, Switzerland, Singapore and Gibraltar.

EU Market Recap

European equities closed broadly lower, maintaining losses from earlier trading, and marking the region’s first negative session this week. Positive sentiment from abating Sino-American trade tension was negated by mounting geopolitical pressure between the US and Russia over atrocities in Syria.

The Euro Stoxx 600 receded 0.60%. Technology moved 0.40% lower, curtailing recent positive trading. Healthcare was an underperformer, falling 1.06%. Autos & parts (-0.71%) continued to decline, as did basic resources. Chemicals in the region continue to be a laggard, posting a return of -1.12%. Financials struggled with financial services retreating 1.16%, and banking declining 0.66%. Retail rose 0.91% and was the best performing sector in the Euro Stoxx 600.

The FTSE 100 edged 0.13% lower, while the DAX and CAC40 declined 0.83% and 0.56%, respectively. Region markets offered disappointing returns YTD with the FTSE 100 declining 5.56%, the DAX falling 4.83%, and the CAC40 retreating 0.65%. 

EU Gainers

  • OXIG.LN +10.6%
  • HAWK.LN +7.7%
  • SINT.SS +7.4%
  • MELE.BB +7.3%
EU Laggards
  • PIX.FP -12.5%
  • KMG.LN -8.8%
  • CAPIO.SS -8.6%
  • SUN.SW -8.5%