morning-quant-ride

Morning Brief

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

Easter Bunny comes early, leaving strong earnings in investors' baskets, sending US futures and Europe higher

Apr 18, 2019

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

 

 

Market data as of 7am EST

 

US Stocks Preview Ahead of the Open

  • Solid earnings this morning from both sides of the Atlantic are fueling risk-appetite today with global markets rising and US futures flat after being lower earlier
  • JP Morgan (JPM) CEO Jamie Dimon said he thinks the Fed did the right thing pausing rate hikes and he does not see a recession in the US over the next couple of years
  • Pinterest will place its IPO today, pricing it at $19 per share, $2 above the high end of its indicated placement range and trade under the symbol PINS; attention will be intense when trading begins, with investors curious to see if Lyft's (LYFT) performance is replicated-Lyft is trading 17% below its recent IPO placement price
  • Goldman Sachs is out arguing that the best way to play corporate earnings via options is to enter a trade 5 day before the announcement.  Interesting enough, the best time to exit the options trade is a few days AFTER the announcement.   
  • The United States will announce March retail sales data at 8:30 AM today. Economists expect a 1.0% m/m increase compared to a 0.2% m/m decline in the prior period.  
  • The vote on Brazil's pension reform bill - central to President Jair Bolsonaro's reform agenda - was delayed from yesterday until next Tuesday, weighing on Brazilian stocks
  • China is experiencing an outbreak of African swine fever in its pork population, requiring higher imports and sending global pork prices higher
  • Read more on the healthcare sell-off: Band-Aid Please! Health Care Stocks Lick Their Wounds and Search for Ointment Amid a Sector Meltdown
  • A trade deal is getting closer: Get the Pens! US-China trade deal could be signed as soon as late May
  • Check out these Top Buy sin stocksNO CONFESSION NEEDED! These SIN STOCKS are what your portfolio needs NOW!
  • Value stocks you need to check out: Everyone loves OUTSTANDING VALUE! These TOP BUY QUALITY VALUE stocks are what your portfolio needs NOW!
  • The VIX is little changed this morning and is currently at 12.12 after closing at 12.6 yesterday
  • SPDR S&P 500 ETF (SPY) April 18 OTM Calls and April 17 OTM Puts, iShares MSCI Brazil ETF (EWZ) May 17 OTM Puts and iShares China Large-Cap ETF (FXI) April 18 OTM Calls & Puts are the most actively traded options contracts in US pre-market trading this morning
  • US 10-Year Treasury Bonds are higher with yields down -3.62 basis points to 2.5578%
  • The US Treasury 2s-10s Spread has narrowed 1.41 basis points to 0.18%
  • WTI Crude is currently down -0.45% to USD$63.76/bbl with the Brent-WTI spread up USD$0.49 to USD$7.35/bbl
  • Global oil prices are stabilizing at the current price levels with worries about a slowdown in global growth offsetting large supply cuts by OPEC members and their allies.  Just as a point of reference, the IMF is forecasting that economic growth this year will be the weakest in a decade. 
  • Gold is currently little changed 0.13% to USD$1275.59/oz

Stocks Trending in the News

 

Click name for Q-Factor breakdown, latest price details, more financial info and sentiment data.

Global Consumer Stocks Trending in the News

  • Las Vegas Sands (LVS) reported first quarter adjusted EPS of 91 cents, beating consensus of 86 cents.  Revenue of $3.65 billion beat $3.5 billion consensus.  Macau revenue of $2.33 billion came ahead of $2.2 billion expected.  Las Vegas Sands confirmed work on the Four Seasons Suites Macau and Londoner Macau “is progressing.”  Las Vegas Sands is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Nestle (SWX:NESN) reported first quarter results that beat expectations.  Nestle saw strong sales growth in North America with higher prices and solid pet care sales.  Nestle posted organic sales growth of 3.4% in the Americas, above the 2.8% growth expected.  Total sales were 22.18 billion Swiss francs.  Nestle saw significant price gains in Brazil, its biggest market.  Nestle’s performance puts in a position to deliver sales growth in the mid to single digits.  Nestle is rated “Attractive” in our European Large-Cap Global Top Stock Ideas 
  • Philip Morris (PM) posted earnings that beat expectations.  Philip Morris first quarter EPS of $1.09 came better than $1.00 consensus.  Revenue ex-excise taxes of $6.75 billion came in line with $6.74 billion consensus.  Philip Morris EPS guidance for 2019 of $4.87-$5.23, a slight cut from $4.90-$5.25 previously.  Philip Morris is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Staples Global Top Stock Ideas.      

Global Financial Stocks Trending in the News

  • American Express (AXP) reported weaker than expected first quarter results.  American Express saw loan-loss provision grow 4% and expenses that grew 11% versus a year ago.  First quarter adjusted  EPS of $2.01 was a touch better than $1.98 consensus.  First quarter revenue at American Express was $10.36 billion, trailing $10.50 billion consensus.  American Express reported $809 million in loan-loss provisions, above $755 million from a year ago.  American Express reaffirmed full year 2019 EPS guidance of $7.55-$8.35.  American Express is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.  
  • BBT&T (BBT) reported first quarter results ahead of consensus.  BB&T first quarter adjusted EPS if $1.05 beat $1.03 consensus.  BB&T first quarter net interest margin of 3.51% came a touch ahead of 3.49% consensus.  Credit loss provisions in the quarter totaled $155 million.  BB&T said it continues to prepare for its integration with SunTrust Bank (STI).  BB&T is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.  SunTrust Bank is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  
  • Citizens Financial Group (CFG) reported first quarter results ahead of consensus.  Citizens Financial Group first quarter adjusted EPS if $0.93 beat $0.89 consensus.  Citizens Financial Group first quarter net interest margin of 3.25% came a touch behind 3.27% consensus.  Credit loss provisions in the quarter totaled $85 million.  Citizens Financial Group posted net interest income growth of 6%.  Citizens Financial Group is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • E-Trade Financial (ETFC) reported first quarter results that beat consensus expectations.  First quarter EPS of $1.09 beat $0.93 consensus.  E-Trade Financial first quarter revenue was $755 million, ahead of $738 million consensus.  First quarter net interest income was $492 million.  Daily average trades were 279,405.  E-Trade Financial is rated “Neutral” in our US Large-Cap Global Top Stock Ideas 
  • SunTrust Bank (STI) reported first quarter results ahead of consensus.  SunTrust Bank first quarter adjusted EPS if $1.33 beat $1.30 consensus.  SunTrust Bank first quarter net interest margin of 3.27% matching consensus of 3.27%.  Credit loss provisions in the quarter totaled $155 million.  Sun Trust said it continues to prepare for its integration with BBT&T (BBT) and will not use its remaining $500 million authorization for share repurchases.  SunTrust Bank is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.  SunTrust Bank is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  

Global Industrial Stocks Trending in the News

  • Honeywell (HON) posted earnings that beat expectations and increased guidance for 2019.  Honeywell first quarter EPS of $1.92 came better than $1.83 consensus.  Revenue of $8.88 billion came in line with $8.63 billion consensus with organic sales growing 8%.  Honeywell EPS guidance for 2019 of $4.87-$5.23, a slight cut from $4.90-$5.25 previously.  Honeywell is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Industrials Global Top Stock Ideas.
  • Schlumberger (SLB) reported first quarter earnings that matched expectations.  Schlumberger reported first quarter EPS of 30 cents, matching consensus.  First quarter revenue of $7.88 billion came ahead of $7.80 billion.  Revenue in North America and Latin America grew while Europe and Middle East revenue was lower.  Schlumberger sees a good 2019 commenting “we expect oil market sentiment to steadily improve over the course of 2019.”  Schlumberger is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.  
  • Union Pacific (UNP) reported results for the first quarter that beat consensus.  Union Pacific reported first quarter EPS of $1.93 that beat $1.88 consensus.  Operating revenue for the first quarter was $5.38 billion, below $5.49 billion consensus.  Energy and agricultural freight revenues fell while Industrial and Premium freight revenues grew versus a year ago.  First quarter operating ratio was 63.6%.  Union Pacific is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas   
  • United Rentals (URI) reported first quarter results that beat expectations.  First quarter EPS of $3.31 beat $3.03 consensus.  United Rentals first quarter revenue was $2.12 billion, ahead of $2.06 billion consensus.  United Rentals reaffirmed revenue guidance for full year 2019 of $9.15-$9.55 billion.  United Rentals CEO said he expects a strong year saying “customer sentiment remains positive.”  United Rentals is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas

Global Commodity & Power Stocks Trending in the News

  • Alcoa (AA) reported first quarter results that were worse than expected.  Alcoa reported a 23 cents per share loss in the first quarter, worse than the 9 cents per share loss expected.  Adjusted ebitda of $467 million was better than the $403 million expected.  Revenue in the first quarter of $2.72 billion trailed the $2.81 billion expectation.  Alcoa cut its aluminum demand growth forecast to 2-3%, down from 3-4%.  Alcoa also cut its global aluminum deficit guidance to 1.5-1.7 million metric tons, down from 1.7-2.1 million metric tons.  Alcoa is rated “Top Short” in our US Large-Cap Global Top Stock Ideas

 

Better Data for Better Investment DecisionsBetter Data for Better Investment Decisions
Better Data for Better Investment DecisionsBetter Data for Better Investment Decisions

International Stock Markets Recap

  • The Euro Stoxx 600 is currently up +0.21%, the FTSE 100 is down -0.14%, the DAX has risen +0.52%, and the CAC 40 is up +0.27%
  • Automobiles & Parts (+0.92%), Media (+0.32%), and Insurance (-0.03%) stocks are the top performers in the Euro Stoxx 600 today
  • Health Care (-0.14%), Real Estate (-0.03%), and Basic Resources (+0.03%) stocks are the worst performers in the Euro Stoxx 600 today
  • Investor sentiment for European stocks is negative with the advance/decline ratio for the Euro Stoxx 600 currently at 0.97x
  • 242 stocks in the Euro Stoxx 600 are at 4-week highs while 69 stocks are at 4-week lows
  • 164 stocks in the Euro Stoxx 600 are overbought while 8 stocks are oversold according to the 16-day RSI Measure
  • The Nikkei 225 finished down --0.84%, the Hang Seng ended down -0.54%, the Hang Seng China Enterprise declined -0.68%, and the CSI 300 was -0.37%
  • Investor sentiment for Japanese stocks finished negative with the advance/decline ratio for the Nikkei 225 closing at 0.18x
  • 62 stocks in the Nikkei 225 hit 4-week highs while 26 stocks reached 4-week lows
  • 19 stocks in the Nikkei 225 closed overbought while 9 stocks closed oversold according to the 16-day RSI Measure
  • Investor sentiment for Hong Kong stocks finished negative with the advance/decline ratio for the Hang Seng closing at 0.32x
  • 9 stocks in the Hang Seng hit 4-week highs while 4 stocks reached 4-week lows
  • 5 stocks in the Hang Seng closed overbought while 0 stocks closed oversold according to the 16-day RSI Measure

 

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

Stock Model PortfoliosMulti-factor quantitatively optimized portfolios risk-adjusted to provide investors an ATTRACTIVERISK/RETURN TRADE-OFF
Stock Model PortfoliosMulti-factor quantitatively optimized portfolios risk-adjusted to provide investors an ATTRACTIVERISK/RETURN TRADE-OFF