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Morning Brief

Wake up to the Morning Quant Ride, your global markets update every morning!

Global Stocks starting the week positive

Aug 06, 2018

As of 7:45am

US Stocks

  • Global stocks are advancing this AM as intensifying discussions between the US and China over trade and tariffs continues to limit investor sentiment
  • US stocks index futures are pointing to a positive open in NY with the Dow Jones minis +0.13%, S&P500 minis +0.11% and Nasdaq 100 minis +0.17%
  • The VIX is little changed this morning and is currently at 11.74 after closing at 11.64 last week
  • GoPro (GPRO) January 2019 OTM Puts, Apple (AAPL) August 10 OTM Calls, SPY August 10 OTM Calls and VXX OTM August 10 OTM Puts are the most heavily traded options contracts in the US pre-market
  • US 10-Year Treasury Bonds are lower with yields up 0.18 basis points to 2.9506%
  • The US Treasury 2s-10s Spread has narrowed 0.43 basis points to 0.3%
  • WTI Crude is currently down -0.68% to USD$68.49/bbl with the Brent-WTI spread up USD$1.38 to USD$4.84/bbl
  • Gold is currently down -0.27% to USD$1211.59/oz

International Stocks

  • European stocks are moderately positive this morning following a weak German factory orders print for the month of June
  • The Euro Stoxx 600 is currently up +0.11%, the FTSE 100 is higher by +0.02%, the DAX has risen +0.34%, and the CAC 40 is up +0.14%
  • Month over month, German factory orders contracted 4.0% compared to expectations for a contraction of 0.5% and has renewed worries about the impact of rising US-Sino trade tensions on global growth
  • Basic Resources (-1.36%), Telecommunications (+0.26%), and Real Estate (-0.24%) stocks are the top performers in the Euro Stoxx 600 today
  • Investor sentiment for European stocks is positive with the advance/decline ratio for the Euro Stoxx 600 currently at 1.64x
  • VSTOXX, the European stocks equivalent of the VIX, is little changed this morning and is currently at 13.24 after closing at 13.4 yesterday
  • EUR€ is currently little changed against the USD$ at 1.1557
  • GBP£ is currently down -0.377% against the USD$ to 1.2952
  • CHF is currently little changed against the USD$ at 1.0045
  • German 10-Year Bunds are lower with yields up 0.3 basis points to 0.411%
  • Asian stocks closed their trading sessions mixed escalating rhetoric on trade between Washington and Beijing weighed in investor sentiment in the region  
  • The Nikkei 225 finished down --0.08%, the Hang Seng ended up +0.52%, the Hang Seng China Enterprise up +0.08%, and the CSI 300 was -1.27%
  • 16 stocks in the Nikkei 225 hit 4-week highs while 26 stocks reached 4-week lows
  • Investor sentiment for Japanese stocks finished negative with the advance/decline ratio for the Nikkei 225 closing at 0.61x
  • Japan 10-Year Government Bonds are flat with yields little changed 0 basis points to 0.11%
  • JGBs 2s-10s Spread has narrowed 0.4 basis points to 0.22%
  • JPY¥ is currently little changed against the USD$ at 111.33

Cryptos

  • Yeoman Capital founder and well-known cryptocurrency evangelist David Johnson argues the strategy of massively distributing new crypto tokens to users that already own cryptocurrencies should be replaced by a smarter, targeted approach that he calls “smartdrops”.  The idea behind the “smartdrops” framework, which is already beginning to gain momentum, would help blockchain startups market to users who are interested in being stakeholders.
  • Co-Founder of Finder.com, Fred Schebesta, is looking to open a crypto bank in Australia.  In an interview with News.com.au, Schebesta argues that the growing interest in cryptocurrencies means at some point users will need a formal institution that can service their cryptocurrency needs.
  • UK digital coin miner Argo Blockchain has raised USD$32.5mm in an IPO on the London Stock Exchange.  Argo Blockchain’s market capitalization is estimated to be ~USD$61.1mm.
  • Starbucks clarifies reports that it will not accept cryptocurrencies as payments following reports Friday afternoon that it would.  The company is part of a global initiative called “Bakkt”, organized by the New York Stock Exchange and Intercontinental Exchange, to create a “new global platform and ecosystem for digital assets “.
  • JP Morgan Chase CEO Jamie Dimon continues to be positive about the impact of blockchain technology and how it can help JP Morgan in an interview with the Harvard Business Review.  Dimon avoided talking about cryptocurrencies and highlights that fiat payment apps are the “biggest potential disruption” to JP Morgan’s business.

*Data in Total Return; Source: S&P Capital IQ

S&P 500 Sector Performance

Light green is month to date, dark green in year to date

Data in Total Return as of Previous Day's EOD, Source: S&P Capital IQ

Russell 1000 Factor Performance

Light green is month to date, dark green in year to date

Data in Total Return as of Previous Day's EOD, Source: S&P Capital IQ

Stocks Trending in the News

Click name for Q-Factor rating and financial data.

  • Berkshire Hathaway (BRK/A), with US$111bn in cash, has yet to detail how share buybacks may work as investors get antsy for an answer.  Results released over the weekend did not contain any details as many were expecting.
  • Cardinal Health (CAH) reported 4Q revenue growth of 7% coming at US$35bn wiht full year revenue growing 5% to US$137bn.  Full year GAAP operating earnings were US$126mn
  • HSBC (HSBA LN) saw operating costs rise 7% in the quarter while trading revue fell 17% contributing to a lackluster quarter overall, especially compared with most large global banks.
  • Jacobs (JEC) reported 3Q results ahead of expectations with revenue of US$4.16bn versus US$3.99bn expected, EPS of US$1.35 compares to US$1.20 expected.  Full year EPS guidance of US$5-5.40 is in line as backlog grew to US$27.19bn
  • JP Morgan (JPM) CEO Jamie Dimon said he thinks US 10 year bond rates could hit 5% in the coming years after previously warning about the 4% level in the past.
  • Kraft Heinz (KHC) has narrowed the list of bidders for its Indian assets with Tata Group and Dabur India Ltd making the short list according to press reports.  The assets are expected to sell for about US$1bn.
  • Linde (LIN GR) and Praxair (PX) could see their US$47bn merger get derailed as antitrust authorities are making demands that could prove too much for both companies.
  • Pepsi (PEP) announced CEO Indra Nooyi would step down after a 12 year run and be replaced by Ramon Laguarta, who Europe Sub-Saharan Africa before recently becoming president.
  • Softbank (9984 JP) saw operating profit rise 49% this quarter to 715bn yen on revenue of 2.27 trillion yen, both well above market estimate.  Softbank is on track for an IPO of their domestic wireless business and still intends to sell it Sprint Corp (S) stake to T-Mobile (TMUS).  
  • Subaru (7270 JP) reported 1Q results below market expectations with sales of 709bn yen coming in below the 752bn estimate while operating income of 57.58bn yen fell below 47.78bm expected.  Full year guidance of 300 bn yen of operating income came below 357.7bn consensus
  • Taiwan Semiconductor (2330 TT) was forced to shut down several plants due to a computer virus infection similar to the “wanna cry” virus of 2017.  The company has warned of delays in shipping chips and said revenue will be affected by up to 2%.
  • Tesco (TSCO LN)  and Carrefour (CA FP) formally confirmed they have entered a long-term strategic alliance.  They will work on joint purchasing and will be governed by a 3-year operational framework.

Cryptocurrencies Today

*Source: Stockdio

Stock Movers

Top Buy Winners and Losers
WINNERS TICKER SECTOR INDUSTRY 1 DAY RETURN 5 DAY RETURN YTD
JEFFERIES FINANCIAL GRP INC JEF Financials Diversified Financial Services 3.45% -1.01% -7.99%
KELLOGG CO K Consumer Staples Food Products 3.2% 1.04% 7.6%
COMCAST CORP CMCSA Consumer Discretionary Media 2.2% 0.94% -13.7%
ALLEGHANY CORP Y Financials Insurance 2.09% 2.84% 9.84%
DISCOVER FINANCIAL SVCS DFS Financials Consumer Finance 2.05% 0.25% -3.85%
LOSERS TICKER SECTOR INDUSTRY 1 DAY RETURN 5 DAY RETURN YTD
WESTERN UNION CO WU Information Technology IT Services -5.95% -4.34% 3.51%
MOTOROLA SOLUTIONS INC MSI Information Technology Communications Equipment -3.22% -4.8% 27.13%
FLEETCOR TECHNOLOGIES INC FLT Information Technology IT Services -2.52% -2.18% 10.84%
EPAM SYSTEMS INC EPAM Information Technology IT Services -2.35% -4.25% 14.36%
STERLING BANCORP STL Financials Banks -2.16% -3.27% -9.68%

On Mobile/Tablet scroll to the right Source: S&P Capital IQ

Top Short Winners and Losers
WINNERS TICKER SECTOR INDUSTRY 1 DAY RETURN 5 DAY RETURN YTD
FLUOR CORP FLR Industrials Construction & Engineering 7.36% 9.91% 6.96%
GLOBAL BLOOD THERAPEUTICS GBT Health Care Biotechnology 6.43% 10.52% 11.24%
TANDEM DIABETES CARE INC TNDM Health Care Health Care Equipment & Supplies 5.09% 25.48% 256.53%
HERTZ GLOBAL HOLDINGS INC HTZ Industrials Road & Rail 4.11% 13.08% -37.25%
ALTICE USA INC ATUS Consumer Discretionary Media 4.08% 3.36% -10.81%
LOSERS TICKER SECTOR INDUSTRY 1 DAY RETURN 5 DAY RETURN YTD
CAESARS ENTERTAINMENT CORP CZR Consumer Discretionary Hotels, Restaurants & Leisure -3.67% -18.5% -28.63%
CHEGG INC CHGG Consumer Discretionary Diversified Consumer Services -3.05% -0.62% 49.43%
SAREPTA THERAPEUTICS INC SRPT Health Care Biotechnology -2.71% 1.44% 73.0%
REGENXBIO INC RGNX Health Care Biotechnology -2.57% 3.38% 68.95%
ARRAY BIOPHARMA INC ARRY Health Care Biotechnology -2.55% 0.26% 10.96%

On Mobile/Tablet scroll to the right  Source: S&P Capital IQ