blog

Latest from the Quantamize Blog

Quantamize End of Day Market Update April 18

Apr 18, 2018

Key Highlights

  • US equities higher on mostly positive 1Q earnings with S&P +0.08%, RTY +0.24%, NDX +0.19%
  • Technology significantly unperformed, reversing from yesterday
  • European stocks broadly advanced, boosted by dovish ECB comment
  • Cryptocurrencies at highest levels since the last week of March, picked up momentum over past week and a half
  • WTI Crude Oil at highest level since December 2014

 

US Market Recap

US stocks advanced for the 3rd straight session but were below midday levels. Corporate earnings have materially improved investor sentiment, with stocks trading higher since the slew of releases last Friday. The VIX closed at 15.60 up from 15.25 at the open. Technology was the biggest laggard today, relinquishing gains from yesterday, while the rotation into energy continued.  

S&P 500 stocks edged 0.08% higher. Market breadth was modestly positive with 282 of 500 stocks advancing. Energy (+1.55%), industrials (+1.02%), and materials (+0.73%) were the most significant outperformers, while defensive stocks struggling as consumer staples (-0.86%), telecommunications (-0.44%), and utilities (-0.39%) were the biggest decliners.

The Nasdaq Composite rose 0.19%, while the Nasdaq 100 moved 0.25% higher. Market breadth for the Nasdaq Composite was relatively neutral as 1170 stocks advanced against 1196 declines. Volume was heavy with the Nasdaq Composite trading at 78% of its 30-day average.

The Russell 2000 gained 0.24% with market breadth slightly positive (1057 advances and 943 declines). Small-cap energy (+3.63%) continues to provide robust returns, followed by materials (+0.74%) and consumer discretionary while consumer staples (-0.75%), utilities (-0.35%), and financials (-0.29%) were the only sectors to finish in the red. Financials continue to be a relative laggard.

 

Stocks Trending the News

American Express (AXP) reported 1Q adjusted EPS of $1.86, beating estimates of $1.71. American Express 1Q revenue was $9.7 billion, beating estimates of $9.14 billion. Shares are up 3.36% post-market. 

Alcoa Corp. (AA) reported 1Q adjusted EPS of $0.77, beating estimates of $0.70. American Express 1Q revenue was $3.09 billion, beating estimates of $3.08 billion. Alcoa also raised its 2018 earnings guidance, as the price of aluminum hit a 6-year high. Alcoa shares rose 3.70% post-market.

Kinder Morgan (KMI) is raising its quarterly dividend 60%, to $0.20 per share. Kinder Morgan shares are up 1.61% post-market.

Pier 1 Imports (PIR) will be halting its dividend to reallocate its resources to focus on its 3-year plan to increase sales. Pier 1 shares are down 14.74% post-market.

United Rentals (URI) reported 1Q adjusted EPS of $2.87, beating estimates of $2.47. United Rentals 1Q revenue was $1.73 billion, beating estimates of $1.69 billion. Shares are down 2.78% post-market. 

 

S&P 500 Gainers

  • ISRG +8.17%
  • CSX +7.85%
  • DVN +7.15%
  • TXT +6.76%

 

S&P 500 Laggards

  • IBM -7.53%
  • AMAT -5.41%
  • JNPR -4.05%
  • LRCX -4.03%

 

RTY 2000 Gainers

  • GNMK +17.70%
  • VHI +14.51%
  • WTI +14.37%
  • SPWR +11.86%

 

RTY 2000 Laggards

  • BMI -9.11%
  • ICHR -8.36%
  • BGS -7.60%
  • ELY -7.45%

 

Cryptocurrencies

Major cryptocurrencies broke out from being mixed on the day and are all mostly positive. Bitcoin is up at $USD8,115.18, +2.84% over the last 24-hours. Bitcoin Cash, Stellar, Icon, Steem are top performers; up 15.95%, 12.95% and 11.77% and 13.35% respectively. Three recent Princeton University graduates have received USD$133mm in backing from Silicon Valley for their cryptocurrency startup called Basis. Basis claims that cryptocurrencies are too speculative and that it’s creating a cryptocurrency based on an algorithmic central bank that simulates inflation and deflation to control the price – just like a real currency. News is light on the day, however, a return to risk-assets across the globe is seen in cryptocurrencies as prices are at their highest levels in the past three weeks.

 

Latin American Equities

Latin American equities posted strong gains today. Brazil’s Ibovespa was +2.06%, Argentina’s Merval was +0.49% and Mexico’s Mexbol is +0.32%. Venezuelan state-run company Petroleos de Venezuela SA (PDVSA) has canceled plans to import American Crude oil in April and May as sellers are demanding payments ahead of delivery. PDVSA was planning on buying 3.5mm barrels of WTI and Domestic Sweet Blend as the country is experiencing a cash crunch. News is light otherwise in LatAm today.

 

Rates & FX

US bonds finished mostly lower with a sell-off equally distributed across all maturities. The US 10-Year Swap Yield moved the most today as the 10-Year Swap Yield is now at 2.903% from 2.942% this morning. The spread between the US 10 Year Bond Yield and the 1-Year LIBOR is at 12bps, just above the low hit 12 days ago at 6bps. The USD$ continues its gains on the week and is higher at 89.62, up 15bps. Notably, the USD$ is posting gains against CAD$ (1.2626) and MXN$ (18.09) up 55bps and 39bps. The US has said today that it is seeking a NAFTA deal finalized in three weeks.

 

Commodities

Precious metals remain posted solid returns today. Gold was up 11bps, silver was up 243bps, platinum was up 48bps, and palladium was up 226bps. WTI rallied sharply today, WTI is up 3340bps at USD$68.74/barrel. Oil prices have not been this high

 

EU Market Recap

European equities closed broadly higher, contrasting mixed returns earlier. Markets in the region traded on above average volume with the European Composite +113.91% of its 30-day average. Francois Villeroy, Governor of the Bank of France and ECB policymaker, provided dovish remarks stating that ECB plans to curtail QE may be “adapted, depending on the ultimate impact on inflation prospects”.

The Euro Stoxx 600 advanced 0.30% reversing from negativity midsession. Market breadth was notably positive with 417 of 600 stocks in the black. Basic resources +4.37% was a significant outperformer, compounding on yesterday’s strong returns. Autos & parts fell 1.00%, conceding most of the gains from the previous session. Technology retreated 0.32% after providing robust returns yesterday.

Regional markets rose across the board. The FTSE 100 (+1.30%) was the best performing index, followed by the CAC40 (+0.50%0), while the DAX (+0.09%) was a relative laggard.

 

EU Gainers

  • DIREN.FR +30.6%
  • RIO.LN +5.4%
  • NK.FR +5.2%
  • SHP.LN +3.6%

 

EU Laggards

  • JUP.LN -4.7%
  • CON.GR -4.1%
  • INTU.LN -4.0%
  • IIA.AV -3.7%