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Quantamize End of Day Market Update April 12

Apr 12, 2018

US Market Recap

US equities finished higher, holding returns from earlier trading. Lingering Sino-American trade concerns and US-Russia geopolitical pressure continue to ease. Several major banks are scheduled to release earnings tomorrow, with market expectations for strong growth. Market breadth was positive with an S&P 500 advance/decline ratio of 2.37 (355 advances and 150 declines), and the VIX settling down at 18.49. Financials continued their strong performance from midday, while technology and industrials followed suit.

President Trump has reportedly instructed USTR Robert Lightizer and NEC director Larry Kudlow to reengage in negotiations with the goal of potentially rejoining the Trans-Pacific Partnership (TPP). President Trump stipulated that the US would only return under favorable terms. It is interesting to note that the TPP aims to counter the spread of China’s economic influence in Asia, in-line with President Trump’s sentiment. The US withdrew from the trade pact nearly a year ago.

The S&P 500 advanced 0.83%, led higher by returns in financials (+1.82%). Outperformance in large-cap banking (+2.29%), ahead of tomorrow’s heavy earnings schedule, lifted the S&P 500 financial sector. Industrials (+1.45%) were a big outperformer, as were materials (+.107%). Despite technology’s broad outperformance, large-cap technology was mixed with information technology rising 1.28%, but telecommunications finishing relatively flat (0.03%). Consumer stocks were also mixed as consumer discretionary advanced 0.45%, while consumer staples fell 0.19%. Utilities (-1.28%) and real estate (-1.15%) are strong underperformers, with defensive stocks providing disappointing returns.

Nasdaq Composite stocks gained 1.01%. The Nasdaq 100’s (+1.11%) outperformance of the broader Nasdaq Composite indicates strong performance in large-cap technology. Large-cap semiconductors (+2.32%) finished in-line with midday performance.

The Russell 2000 rose 0.68%, with small-cap stocks underperforming the broader market. Healthcare (+1.19%) was the strongest performer, with technology (+1.10%) and financials (+0.62%) also providing strong returns. Small-cap energy increased 0.15%, continuing a trend of positive trading. Utilities fell 0.95%, as the sector broadly underperformed in US markets.

Stocks Trending the News

Broadcom (AVGO) received approval from its board to repurchase $12 billion in stock. Broadcom shares fell 0.37%.

S&P may be downgrading Deutsche Bank (DBK.GR)’s credit rating. Deutsche Bank’s long-term debt is currently rated A-. Deutsche Bank shares gained 1.55%.

MGM RESORTS INTERNATIONAL (MGM) is reportedly in talks to purchase WYNN RESORTS (WYNN)’s Boston casino project according to the Wall Street Journal. MGM shares rallied 3.71% and Wynn shares closed 3.79% higher.

Micro Focus (MRCO.LN), a British infrastructure software company, is being pressured by Elliot Management, a hedge fund with $34 billion under management, to sell to a private equity firm. Elliot is rumored to have a stake in Micro Focus. Micro Focus shares closed 7.56% higher. 

S&P 500 Gainers

  • INCY +5.34%
  • MU +4.18%
  • HST +4.06%
  • DE +4.05%
S&P 500 Laggards
  • LB -4.62%
  • RE -3.60%
  • DLR -3.41%
  • HCP -2.75%
RTY 2000 Gainers
  • SELB +19.68%
  • SPRO +19.08%
  • QNST +16.77%
  • MBI +13.02%
RTY 2000 Laggards
  • HCC -24.55%
  • AGX -14.22%
  • APOG -8.86%
  • LRN -8.28%

Rates & Commodities

The US 10-Year yield closed at 2.84%, higher than this morning’s 10-Year Yield of 2.792%. The US 30-Year yield closed at 3.047%, higher than this morning’s level of 3.011%. The USD$ was higher today, closing at 89.76, up 28bps on the day. The US Dollar gained against most majors, but was notably weaker against the British Pound, falling 35bps to 1.4226. The dollar was significantly stronger against the Yen, gaining 52bps to 107.34. Most precious metals fell today with Gold (USD$ 1335.03/ounce), Silver (USD$ 16.47/ounce), and Platinum (USD$928.36/ounce) falling 136bps, 122bps, and 38bps respectively. Palladium (USD$ 966.11/ounce) was the lone precious metal to remain flat for the day, gaining 2bps. WTI Crude oil rose 43bps to USD$ 67.11/barrel.

Cryptocurrencies

Cryptocurrencies rallied today, with 24 of the top 25 cryptocurrencies by market cap rallying today. Tether (USDT) was the only negative cryptocurrency, falling 0.18%. Bytom (BTM) and OmiseGo (OMG) were the biggest gainers, gaining 33.76% and 22.24%, respectively. Bitcoin is trading at $7,671.65 up 11.09%, Ethereum is trading at $462.58, up 9.82%, Ripple at $0.5811 up 16.11%, Bitcoin Cash at $710.97 up 8.91%, and EOS at $8.90 up 15.20%. Bank of America is considering using blockchain to create a single transaction ledger. The US Patent and Trademark Office (USPTO) reported the patent application earlier today. Santander, a Spanish bank, is launching a Ripple payment app later this week. The service is called “One Pay FX” will be available in Spain, UK, Brazil, and Poland.

EU Market Recap

European equities closed higher, rising for the 3rd time in 4 sessions this week. De-escalating rhetoric between US, Russia, and other nations over atrocities in Syria provided positive sentiment. Technology and financials were the biggest outperformers in the region, and the sectors rallied globally.

The Euro Stoxx 600 finished up 0.70%, with 17 of 19 sectors positive. Technology advanced 1.33% with returns in telecommunications (+0.55%), which traded on 166% of its 30-day average volume, lifting the sector. Financials were led higher by strong returns in banking (+1.12%) and financial services (+0.86%). Basic resources rose 0.79%, elevated by robust returns in chemicals (+1.12%). Healthcare rose 0.91%, and autos & parts gained 1.06%, reversing recent negative trends.

Regional markets were mixed with the DAX and CAC40 rising by 0.98% and 0.59%, respectively, while the FTSE 100 finished relatively flat +0.02%.

EU Gainers

  • LNTA.LN +10.2%
  • SQZ.LN +9.9%
  • DNLM.LN +9.5%
  • OXIG.LN +9.0%
EU Laggards
  • CPR.LN -11.8%
  • SCPA.LN -10.0%
  • G1A.GR -8.1%
  • SAE.GR -6.1%