blog

Latest from the Quantamize Blog

Take me higher! A sixth day of gains puts the S&P 500 even closer to a record, trade optimism fuels risk-on sentiment

Apr 04, 2019

 

Better Research, Better Investments.Better Research, Better Investments.
Better Research, Better Investments.Better Research, Better Investments.

US Markets End of Day Snapshot

  • US stocks close mostly higher, notching a sixth day of gains with a generally positive sentiment surrounding a trade agreement with China
  • The S&P 500 finished up 0.21%, Nasdaq Composite is down 0.05%, and Russell 2000 up 0.42%
  • President Trump is set to meet Vice-Premier Liu He as trade negotiations enter the final phase, with hopes for a final deal that could be signed by President Trump and President XI at a summit in the near future
  • Reports are that a summit could be announced for a signing of an agreement soon; the agreement would give China until 2025 to comply fully
  • Read more on US-China trade talks in our blog post: Let's make a deal! China looking to close a trade deal with US as negotiators arrive in Washington
  • US Initial Jobless Claims for the week ending March 30th were 202k, coming better than the 215k expected and 211k from the prior week
  • Did you know that the S&P 500 has ONLY risen each month of the 1st quarter 20 times since 1950?  If history is any guide, US stocks should continue to rally with the average return +9.5% for the rest of the year when the S&P 500 was positive in January, February and March.
  • JPMorgan (JPM) CEO James Dimon said the volatility investors saw in the fourth quarter is a sign of what's to come, in a letter to shareholders that had a noticeable negative outlook to it
  • Check out these Tech Top Picks: Forget the FANGs, THESE Titans of Techs are what your portfolio NEEDS NOW!
  • We highlight ETFs in this post today: Could ingrained beliefs about low-cost ETFs be mistaken? A new study suggests perhaps so
  • German factory orders fell 4.2% in February, coming much worse than the 0.3% growth expected
  • Italy is slashing its growth forecast to just 0.1% for the coming year while increasing the expected budget deficit to between 2.3% and 2.4% of GDP
  • The VIX is getting cheap just in time!  Earnings season is right around the corner and that means there will be a lot of opportunities to play stocks announcements!
  • Materials (+1.01%), Energy (+0.86%), and Consumer Discretionary (+0.71%) stocks were the top performers in the S&P 500 today
  • Real Estate (-0.29%), Utilities (-0.39%), and Tech (-0.44%) stocks were the worst performers in the S&P 500 today
  • Investor sentiment for US stocks finished positive with the advance/decline ratio for the S&P 500 closing at 1.55x
  • 182 stocks in the S&P 500 hit 4-week highs while 16 stocks reached 4-week lows
  • 65 stocks in the S&P 500 closed overbought while 2 stocks closed oversold according to the 16-day RSI Measure
  • 146 stocks in the Nasdaq Composite hit 4-week highs while 77 stocks reached 4-week lows
  • 443 stocks in the Nasdaq Composite closed overbought while 143 stocks closed oversold according to the 16-day RSI Measure
  • The VIX finished flat at 13.58 after closing at 13.74 yesterday

Stocks Trending in the News

Click name for Q-Factor rating and financials data.

Global Consumer Stocks Trending in the News

  • Amazon (AMZN) is set to enter the generic drug market as soon as October, according to a note from Cleavland Research.  The note comments that Amazon will likely make a “more meaningful move” into the pharmacy business over the next 12 months.  Amazon also announced it has added some health-related functions to Alexa, including scheduling doctor visits and checking prescriptions.  Amazon is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.   
  • Constellation Brands (STZ) is selling a group of wine brands to E&J Gallo.  Constellation is selling about 30 brands to Gallo, all of which sell for less than $11.   The brands being sold represented about 40% of Constellation’s wine sales.  Constellation has been looking to sell its low margin brands after reporting weak earnings in the last quarter.  Constellation Brands is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Office Depot Inc. (ODP) shares fell by the most in nearly a year and a half after the company warned investors that its upcoming quarterly results will be worse than expected. Office Depot told investors that it expects to report quarterly revenue of USD$2.76bn on May 8th, slightly below analyst consensus of USD$2.82bn. Office Depot explained that continued cash burn at its newly acquired CompuCom division is a problem that continues to persist. Office Depot is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Target (TGT) is boosting the minimum wage it pays employees to $13 per hour, a $1 hike, that will take effect in June.  The hike is part of Target’s announced goal of getting to $15 by the end of 2020.  Target did not say how many employees would see a raise from the move.  Wages at retailers have been rising amid a tight labor market.  Retailers are the largest private employer in the US.  Target is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Tesla (TSLA) has sold almost as many cars as Porsche (DB:PAH3) in its second month of sales in Germany.  Tesla sold 2,367 cars in March in Germany while Porsche sold 2,744.  Porsche saw a 9% sales drop due to new emissions standards while Tesla saw a five-fold jump from its first month to second.  Tesla is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  Porsche is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas

Global Information Technology and Communication Services Stocks Trending in the News

  • Facebook (FB) data is still being found online.  Cybersecurity firm UpGuard found a large stash of Facebook user data stored on Amazon’s (AMZN) cloud service.  UpGuard found a digital platform that used the Facebook data has personal information of 540 million Facebook users in plain sight for anyone who knew how to look closely, according to a Bloomberg report.  Facebook has been able to remove the data in each case but the fact that they are there in the first place concerns security specialists.  Facebook is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.  Amazon is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Micron Technology (MU) was downgraded to equal-weight from overweight at Morgan Stanley.  Micron’s $32 price target was maintained but the recent move up of the stock makes Morgan Stanley cut the rating, Micron has rallied 51% since December.  Morgan Stanley reiterated that it sees too much optimism in the semiconductor sector.  Micron is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.  
  • Roku (ROKU) was downgraded at Guggenheim to neutral from buy.  Roku also saw it price target trimmed to $72 from $77.  Roku is facing competition from a number of large players making its platform vulnerable.  Free content from bigger players on their own platforms is threatening Rolu’s growth outlook, Guggenheim notes, saying Roku is fairly valued at these levels.  Roku is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas .
  • Tencent (TCEHY, SEHK:700) closed Asia’s largest bond placement in over a year, placing $6 billion in bonds.  Tencent placed five, seven, ten and 30-year bonds in the sale.  The largest chunk was #3 billion of 10-year bonds and Tencent looked to lock in low rates for its borrowing.  These priced at 1.45% above US 10-year Treasuries.  Most if the bonds were sold without any yield premium, showing the strong demand for these bonds.  Tencent is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
  • Twitter (TWTR) saw its price target hiked to $41 from $33 at Guggenheim while its buy rating was maintained.  Guggenheim says Twitter is “well positioned to exceed investor expectations over the next several years.”  Guggenheim sees this for Twitter given the steps they have taken to improve the health of the platform.  Twitter is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas
  • Verizon (VZ) launched the 5G era in the US Wednesday, launching a week ahead of schedule in Chicago and Minneapolis.  South Korea also launched its 5G and it is not clear who was first.  Verizon launched first as a show of technological prowess.  5G networks can provide connections that are up to 100 times faster than present connections.  Verizon is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas

Global Industrials Stocks Trending in the News

  • Boeing’s (BA) flight control system was to blame for the crash of the most recent 737 Max, according to a preliminary report from Ethiopian investigators.  The report says pilots followed Boeing’s emergency procedures but were unable to save the jet.  The report puts the spotlight on Boeing to come up with a fix.  Press reports are that a fix from Boeing should come shortly.  Boeing is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas
  • Caterpillar (CAT) was downgraded to hold from buy at Deutsche Bank today.  Deutsche cut Caterpillar’s price target significantly, to $128 from $152.  Deutsche said it is “becoming increasingly clear” that Caterpillar’s backlog growth is about to turn negative, an ominous sign.  Caterpillar faces the prospect of collapsing global growth, Deutsche warns.  The Chinese land cycle is rolling over and there is a glut of equipment in the US.  Caterpillar is rated  is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas
  • Embraer (ERJ) won an order from Africa’s Peace Air worth $2.1 billion.  Peace air ordered 10 Embraer 195 E2 planes with options for another 20 planes.  This will be the first sale of 195 jets in Africa.  Peace Air will use the new planes to expand service as part of its “no city left behind” initiative of expansion.  Embraer is rated “Unattractive” in our Brazil All-Cap Global Top Stock Ideas.

Global Financial Stocks Trending in the News

  • Blackstone Group (BX) has raised $22 billion for its flagship buyout fund and it is not done.  Analysts expect Blackstone could raise $25 billion for the fund amid a strong fundraising environment.  Blackstone has not yet set a limit on the pool but is seeking to raise a total of $100 billion this year.  $566 billion was raised by private equity funds in 2017 with $432 billion raised last year.  Blackstone Group is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  
  • Commerzbank AG (DB: CBK) and Deutsche Bank AG (DB: DBK) are heading into a key weekend that will determine whether merger talks deepen or if they are broken off, according to people brief on the matter. Reports detail that both Commerzbank and Deutsche Bank are favoring intensifying merger talks, but nothing is certain. Both banks declined to comment on the reports. Commerzbank is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas. Deutsche Bank is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.  
  • Nomura Holdings Inc. (TSE: 8604) announced a plan to cut USD$1bn in costs at the company's struggling investment bank. The largest securities firm in Japan will also cut roughly 150 jobs across its locations in the Americas, the Middle East, Europe, and Africa. These job cuts are in addition to previously planned reductions at its Hong Kong and Singapore locations. Nomura is rated “Attractive” in our Japan Large-Cap Global Top Stock Ideas.
  • TradeWed Markets (TW) placed its IPO and started trading Thursday.  Share were priced at $27 and the shares opened the day 27% higher at $34.26.  TradeWeb sold 40 million shares raising $1.1 billion in the sale and twice increased the size of the offering due to demand.  The IPO values TradeWed at $7.9 billion.  TradeWeb is not yet rated in our Global Top Stock Ideas.
  • UniCredit SpA (BIT: UCG) is said to be preparing a rival bid for Commerzbank AG (DB: CBK) in the event that merger talks with Deutsche Bank AG (DB: DBK) fizzle out. According to a report by the Financial Times, UniCredit’s plan would involve purchasing a stake in Commerzbank and merging the financial institution with its own HypoVereinsbank. UniCredit is rated “Top Short” in our European Large-Cap Global Top Stock Ideas. Commerzbank is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas. Deutsche Bank is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.

Global Commodities & Power Stocks Trending in the News

  • PG&E (PCG) has chosen the head of the Tennessee Valley Authority as its next CEO.  Bill Johnson will take over as its new CEO and a completely new board will be installed.  PG&E is facing $30 billion in liabilities and is trying to steer out of bankruptcy.  Mr Johnson is being chosen for his safety and operational expertise.  PG&E is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  
  • Weatherford International (WFT) shares slid after BMO analyst Daniel Boyd wrote in a note to clients that the company's cash burn is expected to be more than USD$150mm for CY1Q2019 as it continues with its transformation program. Analysts expect Weatherford to report a loss excluding certain items in CY1Q2019 of USD$0.12/share. Weatherford is not rated in our Global Top Stock Ideas.

Global Healthcare Stocks Trending in the News

  • Abeona Therapeutics (ABEO) shares traded slightly higher after its ABO-101 gene therapy program for patients with Sanfilippo syndrome type B received fast-track designation from the FDA. Abeona expects to activate additional study sites for the drug across the globe later in the year with current study sites in the US and Spain. Abeona is rated “Unattractive” in our US SMID-Cap Global Top Stock Ideas.  
  • Canopy Growth Corp (TSX:WEED) started trading 5 years ago this week as the first listed pot stock.  Canopy Growth has risen 2,159% since going public, rising higher in a cloud of smoke.  What started as a listing on the Toronto Exchange’s Venture Market with a stock a bot over $1, is now a $15 billion company.   Canopy Growth is rated “Unattractive” in our Canada All-Cap Global Top Stock Ideas
 

 

Actionable and Transparent Quantitative ResearchActionable and Transparent Quantitative Research
Actionable and Transparent Quantitative ResearchActionable and Transparent Quantitative Research

US Treasuries

  • US 2-Year Treasury Notes are lower with yields up 0.21 basis points to 2.33%
  • US 5-Year Treasury Bonds are higher with yields down -1.17 basis points to 2.31%
  • US 10-Year Treasury Bonds are higher with yields down -1.44 basis points to 2.50%
  • The US Treasury 2s-5s Spread has narrowed 1.38 basis points to -0.02%
  • The US Treasury 2s-10s Spread has narrowed 1.65 basis points to 0.17%
  • US Treasury 5s-10s Spread has narrowed 0.27 basis points to 0.19%

Currencies

  • EUR€ is little changed 0.089% against the USD$ in after hours to 1.1223
  • GBP£ is down 0.585% against the USD$ in after hours to 1.3081
  • CHF is down 0.18% against the USD$ in after hours to 1
  • JPY¥ is little changed 0.099% against the USD$ in after hours to 111.6

Commodities

  • WTI Crude is down -0.58% to USD$62.1/bbl with the Brent-WTI spread little changed USD$0.1 to USD$6.74/bbl
  • Gold is up 0.26% to USD$1293.23/oz

 

*Data in Price Return and Updated Real-Time (with a delay), Source: StockDio

S&P 500 Sector ETFs - End of Day

*Data in Price Return and Updated Real-Time (with a delay), Source: StockDio

Russell 1000 Factor ETFs - End of Day

*Data in Price Return and Updated Real-Time (with a delay), Source: StockDio

 

Get Unbiased Quantitative Investment Research from Advanced AI Machine Learning Technology and Maximize your ReturnsGet Unbiased Quantitative Investment Research from Advanced AI Machine Learning Technology and Maximize your Returns
Get Unbiased Quantitative Investment Research from Advanced AI Machine Learning Technology and Maximize your ReturnsGet Unbiased Quantitative Investment Research from Advanced AI Machine Learning Technology and Maximize your Returns

S&P 500 Movers

On Mobile/Tablet scroll to the right.

Outperformers Sector Price 1D % Chg Volume
Constellation Brands Inc Consumer Staples 160 6.54%                364,779
Macy's Inc Consumer Discretionary 24.9 5.61%            2,642,770
Capri Holdings Ltd Consumer Discretionary 40.4 5.03%                650,870
Foot Locker Inc Consumer Discretionary 57.2 4.29%                580,778
Perrigo Co PLC Health Care 45.1 3.94%                423,479
 
Underformers Sector Price 1D % Chg Volume
Fortinet Inc Information Technology 74.6 -4.56%                338,982
Take-Two Interactive Software Inc Communication Services 106 -4.30%                437,147
FirstEnergy Corp Utilities 38.1 -4.02%            2,794,581
Lamb Weston Holdings Inc Consumer Staples 68.9 -3.79%                577,510
Arista Networks Inc Information Technology 223 -2.67%                177,765
Morning BriefA quick GLOBAL RECAP TO START YOUR DAY
Morning BriefA quick GLOBAL RECAP TO START YOUR DAY