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Morning Brief

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Morning Quant Ride

May 25, 2018

US Stocks

  • US equity index futures are advancing this AM with Dow Jones minis +0.11%, S&P500 minis +0.08% and Nasdaq 100 minis +0.22%
  • Global stocks are bouncing back following a measured response from North Korea to US President Donald Trump’s decision to cancel the June summit with North Korean Supreme Leader Kim Jong-un
  • Foot Locker (FL) is up 14.3% in pre-market trading after reporting better than expected earnings this AM
  • Ross Stores (ROST) is down 4.3% in pre-market trading after giving 2Q2018 guidance that was below expectations
  • US$ Index is +0.21% on the back of a weakening EUR€ -0.20%, GBP£ -0.29%, and JPY¥ -0.14%
  • Oil prices are down for the second day in a row this AM with WTI -2.25% (USD$69.16/bbl) and Brent -2.54% (USSD$77.03/bbl) 
  • WTI has broken below USD$70/bbl this morning and is currently trading around USD$69/bbl
  • US government bonds are little changed to positive this AM with the yield on the US 10-year now at 2.957%
  • The yield on the 10-year closed at 3.057% last Friday

International Stocks

  • European stocks are rallying this morning with the Euro Stoxx 600 +0.29%, FTSE 100 +0.19%, CAC 40 +0.42% and DAX +0.97%
  • European food & beverage stocks are seeing a large jump in volume - - already 53% above the sector’s 30-day average
  • Italian stocks remain under pressure with the FTSE MIB -0.61% over concerns about higher government borrowing costs
  • Italian sovereign bonds are selling off this morning with the Italian 10-year +9.3 basis points to 2.476%
  • Spanish stocks are declining for the third day in a row with the IBEX 35 -1.57% with Banco Santander –3.39% leading the decline
  • Spanish government bond yields are rising with the yield on the 10-year +10.5 basis points to 1.484%
  • Spanish securities are selling off over concerns about a snap election following news that Prime Minister Mariano Rajoy will receive a no-confidence vote from the centrist party Ciudadanos
  • Asian stocks finished their trading sessions mixed with the Nikkei 225 +0.06%, Hang Seng -0.56%, Hang Seng China Enterprise -0.86%
  • The MSCI Asia Pacific index finished the week down for the second week in a row
  • Samsonite (SEHK:1910) finished down 12.35% after trading resumed following the suspension of trading on Thursday following the release of short-sale report by Blue Orca Capital
  • Japanese stocks were weighed down again by mega-cap auto manufacturers like Toyota (TSE:7203) and Honda (TSE:7267) as well as banks stocks Mitsubishi UFJ (TSE:8306) and Sumitomo Mitsui (TSE:8316)
  • Hong Kong 10-year sovereign bonds are rallying this morning with the yield down 4.8 basis points to 2.109%

Cryptos

  • A study examining more than a year's worth of weekly trading patterns published by Warwick Business School found that there are no fundamental economic factors underpinning cryptocurrencies and that investors' buying and selling of cryptoocurrencies is driven by sentiment and mood
  • A Czech Republic utility company will begin accepting payments in cryptocurrencies. Pražská Plynárenská is one of the major suppliers of natural gas in the Czech Republic. In June it will establish a payment payment gateway which will transfer bitcoin payments into fiat currency
  • Bitcoin Gold (BTG) has suffered from a 51% attack resulting in a loss USD$17.5mm. The 51% attack permitted double spending to occur. According to the Bitcoin Gold (BTG) team, exchanges have been targeted rather than individual users
  • In Colombia, two Bitcoin Cash (BCH) proponents have developed a payment processor called Bitek.co. The Bitek platform provides merchants with the ability to accept BCH and covert all or a percentage of the funds into Colombian pesos

*Data in Price Return

S&P 500 Sector Performance

*Data in Total Return

Conviction Buy Laggards From Yesterday We Are Watching Today

Click name for Q-Factor rating and financial data.

Allison Transmission Holdings, Inc. - 5.71% off its 52wkH on 10/31/2017, reports earnings on 07/27/2018

Axcelis Technologies, Inc. - 41.63% off its 52wkH on 11/24/2017, reports earnings on 08/02/2018

Generac Holdings Inc. - 8.27% off its 52wkH on 11/01/2017, reports earnings on 08/02/2018

Intel Corporation - 1.86% off its 52wkH on 04/27/2018, reports earnings on 07/26/2018

Lumentum Holdings Inc. - 16.26% off its 52wkH on 03/12/2018, reports earnings on 08/07/2018

MCBC Holdings, Inc. - 3.39% off its 52wkH on 05/18/2018, reports earnings on 09/07/2018

Stocks Trending in the News

Click name for Q-Factor rating and financial data.

Autodesk (ADSK) reported 1Q2018 that was modestly higher than the consensus ($0.06 vs $0.03 projected). Shares are down 4.69% pre-market.

Bayer AG (DB:BAYN) announced that it expects to close its merger deal with Monsanto in the “near future” after receiving approvals from the EU.

Cloud communications firm 8x8’s (EGHT) stock is down by 9.30% before the start of US trading after being downgraded to neutral at Bank of America. 

FirstCash Inc (FCFS) was downgraded to neutral at Credit Suisse, with a price target set at $92 per share (currently trading at $91.70).

Foot Locker (FL) Footlocker (FL) stock is 12.42% higher pre-market after reporting 1Q2018 EPS that were significantly above expectations ($1.45 vs $1.25 projected).

Gap Inc’s (GPS) 1Q2018 EPS came in moderately below estimates ($0.42 vs $0.46 anticipated). Gap’s shares are trading down 7.74% pre-market.

Hibbett Sports (HIBB) posted 1Q2018 EPS that was softer than anticipated ($1.12 vs $1.15 forecasted). Hibbet’s stock is down 13.47% before the open.

JetBlue (JBLU) is repurchasing 5.3 million shares from Citibank, for a value of $125 million. After this reacquisition, JetBlue is still authorized to repurchase an additional $500 million of stock.

PayPal (PYPL) has been upgraded to a buy rating from a hold AT Stifel Nicolaus, with a price target adjusted upwards to $99 per share. PayPal’s stock closed yesterday at $81.58, and has gained 1.35% pre-market.

Ross Stores (ROST) announced 1Q2018 EPS that was higher than consensus ($1.11 vs $1.07 forecasted). Shares are down 4.30% pre-market.

Samsung Electronics’ (KOSE:A005930) appeal of ruling that the company infringed upon Apple Inc’s (AAPL) smartphone design has backfired, with Samsung ordered to pay $140 million. This development comes after Samsung was ordered to pay an original amount of $399 million, bringing Samsung’s total payout to $539 million.

Telia (OM:TELIA) stock is trading 3.57% lower today after it was reported that the company was close to purchasing Bonnier AB’s television operations.

Cryptocurrencies Today

Stock Movers

Conviction Buy Winners and Losers

On Mobile/Tablet scroll to the right.

Winners  Ticker Sector Industry 1 Day Return 5 Day Return  YTD
ON Semiconductor Corporation ON Information Technology Semiconductors 3.60% 5.57% 19.48%
Micron Technology, Inc. MU Information Technology Semiconductors 2.53% 15.17% 49.54%
Lowe's Companies, Inc. LOW Consumer Discretionary Home Improvement Retail 1.90% 11.76% 3.82%
Assurant, Inc. AIZ Financials Multi-line Insurance 1.88% 1.27% -3.67%
Genesee & Wyoming Inc. GWR Industrials Railroads 1.64% 0.88% -0.77%

 

Losers Ticker Sector Industry 1 Day Return 5 Day Return  YTD
AbbVie Inc. ABBV Healthcare Biotechnology -2.33% -2.68% 6.83%
Principal Financial Group, Inc. PFG Financials Life and Health Insurance -1.41% -0.39% -1.10%
Eagle Materials Inc. EXP Materials Construction Materials -1.35% -1.78% 8.59%
ICU Medical, Inc. ICUI Healthcare Healthcare Supplies -1.19% -0.76% 8.50%
Mohawk Industries, Inc. MHK Consumer Discretionary Home Furnishings -1.05% -1.58% 1.09%

Source: S&P Capital IQ

Conviction Short Winners and Losers

On Mobile/Tablet scroll to the right.

Winners Ticker Sector Industry 1 Day Return 5 Day Return  YTD
Carrizo Oil & Gas, Inc. CRZO Energy Oil and Gas Exploration and Production -3.80% -6.59% 24.91%
Pure Storage, Inc. PSTG Information Technology Technology Hardware, Storage and Peripherals -3.13% -10.68% 3.54%
Energous Corporation WATT Industrials Electrical Components and Equipment -3.16% 3.72% 2.39%
Apache Corporation APA Energy Oil and Gas Exploration and Production -3.08% -6.04% 0.76%
Overstock.com, Inc. OSTK Consumer Discretionary Internet and Direct Marketing Retail -2.74% -6.33% -6.82%

 

Losers Ticker Sector Industry 1 Day Return 5 Day Return  YTD
nLIGHT, Inc. LASR Information Technology Electronic Equipment and Instruments 21.52% 21.35% 0.00%
Smartsheet Inc. SMAR Information Technology Application Software 9.72% 11.76% 0.00%
Zuora, Inc. ZUO Information Technology Systems Software 5.00% 6.81% 0.00%
Blueprint Medicines Corporation BPMC Healthcare Biotechnology 4.49% 2.72% 11.79%
Roku, Inc. ROKU Consumer Discretionary Consumer Electronics 4.17% 1.67% -30.49%

Source: S&P Capital IQ

Events Calendar

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Company Name Ticker Event Date Event Type Q-Factor Score
Foot Locker, Inc. FL 5/25/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: D
China Resources Gas Group Limited SEHK:1193 5/25/2018 Estimated Earnings Release Date China All-Cap: B
YiChang HEC ChangJiang Pharmaceutical Co., Ltd. SEHK:1558 5/25/2018 Estimated Earnings Release Date China All-Cap: B
Kingboard Laminates Holdings Limited SEHK:1888 5/25/2018 Estimated Earnings Release Date China All-Cap: C
China Traditional Chinese Medicine Holdings Co. Limited SEHK:570 5/25/2018 Estimated Earnings Release Date China All-Cap: B
HP Inc. HPQ 5/29/2018 Estimated Earnings Release Date US Large-Cap: A, US Information Technology: A
Momo Inc. MOMO 5/29/2018 Earnings Release Date China All-Cap: A
Noah Holdings Limited NOAH 5/29/2018 Earnings Release Date China All-Cap: C
Booz Allen Hamilton Holding Corporation BAH 5/29/2018 Earnings Release Date US Large-Cap: C, US Information Technology: B
salesforce.com, inc. CRM 5/29/2018 Earnings Release Date US Large-Cap: C, US Information Technology: C