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Morning Brief

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Morning Quant Ride

Jun 14, 2018

US Markets                                                                                                                                                                    Start your free trial today

  • Global stocks are in the red this AM following hawkish comments from the US Fed and weaker than expected industrial output and retail sales for China in May
  • US equity index futures are little changed with the Dow Jones minis +0.04%, S&P500 minis +0.04% and Nasdaq 100 minis -0.03%
  • May retail sales data released at 8:30am will be closely followed by investors following the FOMC comments about a healthy US economy and accelerating inflation trends
  • The VIX continues to hold below its long-term trend level of 16 at 12.70 this morning
  • Merck (MRK) June 15 OTM Calls, SPY June 15 and December 2018 OTM Calls, HYG July 20 OTM Puts are the most heavily traded options contracts in the US pre-market this AM
  • The yield on the US 10-year government bond is little changed at 2.944%
  • The USD$ Index is down 0.20%  with strength in the GBP£ +0.28%, JPY¥ +0.25% and ZAR +0.87% pressuring the Greenback
  • AUD$ -0.36% is a notable laggard among G7 currencies following weaker than expected employment data for Australia
  • Precious metals are up across the board with Gold +0.35%, Silver +0.40%, Platinum +0.30%, and Palladium +0.45%

International Markets

  • European stocks are down following the the European Central Bank (ECB) decision to keep rates unchanged with the Euro Stoxx 600 -0.41%, FTSE 100 -0.02%, CAC 40 -0.17% and DAX -0.32%
  • ECB plans to keep rates unchanged until at least summer of 2019 though net asset purchases are expected to be halted by December 2018
  • The VSTOXX, the European stocks equivalent of the VIX, is down to 12.9324 after closing at 13.1980 yesterday – in contrast to the negative sentiment in stocks
  • Asia stocks finished their trading sessions negative with the Nikkei 225 -0.99%, Hang Seng -0.93%, Hang Seng China Enterprise -0.71%
  • Disappointing economic data out of China weighed on sentiment across the region
  • Negative investor sentiment to Asia stocks was further exacerbated by the People’s Bank of China (PBOC) decision not to raise borrowing costs
  • Industrial production Y/Y in China for the month of May slightly missed expectations at +6.8% vs. consensus of +7.0%
  • Retail sales Y/Y in China for the month of May was below expectations at +8.5% vs. expectations of +9.6%

Cryptos

  • Bitfi, a global payments technology company, is launching an open source hardware wallet. The wallet will support a number of cryptocurrencies including Monero (XMR). Bitfi is a global payments technology company that aims to enable businesses and consumers to participate in the digital currency economy
  • Fundstrat Global Advisors, a well-known research firm that covers Bitcoin (BTC), issued a report yesterday and noted that BTC could fall further to somewhere between USD$5,000 and USD$5,500. The firm further noted that prices over the long term could fall much further. Quantamize's AI Machine Learning 3-Day Trading Signal currently rates Bitcoin (BTC) as Don’t Own 
  • Thailand’s Securities and Exchange Commission (SEC) has provided details on the country’s regulatory framework for digital currencies and initial coin offerings (ICOs). Only five of the current 50 proposed ICO projects meet the registration requirements

*Data in Price Return, Source: Stockdio

S&P 500 Sector Performance

*Data in Total Return as of Yesterday's EOD, Source: Capital IQ

Conviction Buy Laggards From Yesterday We Are Watching Today

Click name for Q-Factor rating and financial data.

Louisiana-Pacific Corporation - 10.00% off its 52wkH on 04/17/2018, reports earnings on 08/01/2018

Macy's, Inc. - 7.16% off its 52wkH on 06/07/2018, reports earnings on 08/10/2018

Micron Technology, Inc. - 7.13% off its 52wkH on 05/30/2018, reports earnings on 06/20/2018

Norfolk Southern Corporation - 2.78% off its 52wkH on 06/12/2018, reports earnings on 07/26/2018

Tyson Foods, Inc. - 16.79% off its 52wkH on 12/04/2017, reports earnings on 08/06/2018

Westlake Chemical Corporation - 9.55% off its 52wkH on 05/22/2018, reports earnings on 08/01/2018

Stocks Trending in the News

Click name for Q-Factor rating and financial data.

21st Century Fox (FOXA) shares are up 2.40% before the open to $44.45 after receiving a $65 billion acquisition bid yesterday from Comcast Corporation (CMCSA). This bid represents a nearly $13 billion premium above the bid from The Walt Disney Company (DIS). If accepted, the $65 billion deal would be the largest all-cash deal ever, according to Thompson Reuters data.

Apple Inc (AAPL) has disclosed a new security feature for its iPhone products, called USB Restricted Mode, which will make it more difficult for other devices to retrieve user data from an iPhone.

Embattled Chinese telecommunications firm ZTE Corp (SZSE:000063) has proposed a $10.7 billion financing plan, and elected 8 new board members, as the company attempts to overhaul its management structure. Shares of ZTE Corp finished 1.07% lower today, after falling 41.58% in yesterday’s trading.

Kohl’s Corp (KSS) has been downgraded to neutral from a buy rating at Citi Group. Shares of Kohl’s are down 1.74% before the open to $74.40 per share. 

Michaels Companies Inc (MIK) reported 1Q2018 EPS that was relatively in-line with expectations ($0.39 vs $0.38 projected) but announced 2Q2018 EPS guidance that was below forecasts ($0.12-$0.14 vs $0.19 anticipated). Michaels Companies stock is down 11.99% pre-market to $19.30.

Microsoft (MSFT) announced that it is working on technology that will eliminate cashiers and checkout lines in brick and mortar stores and has been in talks with Walmart (WMT) about a potential partnership. Microsoft’s biggest challenge may be competing with Amazon’s (AMZN) Amazon Go automated grocery stores.

Oracle Corp (ORCL) stock has fallen 2.26% pre-market to $47.18 after the company was downgraded to neutral from a buy rating at JP Morgan. 

Renault SA (ENXTPA:RNO) CEO Carlos Ghosn is likely to step down from his position before the end of this term in 2022, according to a Financial Times report.

Rolls-Royce Holdings PLC (LSE:RR) will be cutting 4,600 jobs, or 8.4% of the company’s entire workforce, in a cost cutting measure. Significant problems have emerged with the engines that Rolls-Royce supplied to Boeing Co (BA) for Boeing’s 787 Dreamliners, which has placed tremendous stress on the firm.

Royal Caribbean Cruise Lines (RCL) has purchased a 66.7% stake in Silversea Cruises Ltd, for a value of $2 billion.

Terex Corporation (TEX) is down 2.99% to $40.49 pre-market after the company was downgraded to sell from a neutral rating at Goldman Sachs.

Unilever NV (ENXTAM:UNA) is “extremely unlikely” to remain in the blue-chip FTSE 100 Index, according to Unilever CFO Graeme Pitkethly. Unilever recently moved its corporate headquarters to the Netherlands.

Cryptocurrencies Today

Source: Stockdio

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
Anthem, Inc. ANTM Healthcare Managed Healthcare 1.99% 3.50% 5.02%
The Walt Disney Company DIS Consumer Discretionary Movies and Entertainment 1.90% 2.24% -1.12%
Dollar Tree, Inc. DLTR Consumer Discretionary General Merchandise Stores 1.61% 6.47% -18.01%
MSCI Inc. MSCI Financials Financial Exchanges and Data 1.45% 3.55% 36.08%
FleetCor Technologies, Inc. FLT Information Technology Data Processing and Outsourced Services 1.31% 2.55% 7.91%

 

Losers Ticker Sector Industry 1 Day Return 5 Day Return  YTD
Louisiana-Pacific Corporation LPX Materials Forest Products -7.63% -6.68% -3.80%
Service Corporation International SCI Consumer Discretionary Specialized Consumer Services -3.29% -3.71% -3.79%
Berry Global Group, Inc. BERY Materials Metal and Glass Containers -2.97% -1.95% -3.98%
The Hershey Company HSY Consumer Staples Packaged Foods and Meats -2.10% -0.54% 1.19%
Genesee & Wyoming Inc. GWR Industrials Railroads -2.02% -1.97% 0.56%

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
ACADIA Pharmaceuticals Inc. ACAD Healthcare Biotechnology -8.43% -8.07% -10.61%
Portola Pharmaceuticals, Inc. PTLA Healthcare Biotechnology -4.53% -3.50% 2.51%
California Resources Corporation CRC Energy Oil and Gas Exploration and Production -4.50% -5.47% 3.87%
Sage Therapeutics, Inc. SAGE Healthcare Biotechnology -3.55% 13.98% 11.02%
Array BioPharma Inc. ARRY Healthcare Biotechnology -2.89% -1.66% 8.81%

 

Losers Ticker Sector Industry 1 Day Return 5 Day Return  YTD
Pivotal Software, Inc. PVTL Information Technology Application Software 32.96% 35.58% 0.00%
Madrigal Pharmaceuticals, Inc. MDGL Healthcare Biotechnology 10.80% 10.70% 241.26%
Longfin Corp. LFIN Financials Financial Exchanges and Data 8.71% 16.53% -92.24%
EVO Payments, Inc. EVOP Information Technology Data Processing and Outsourced Services 5.75% 3.27% 0.00%
ImmunoGen, Inc. IMGN Healthcare Biotechnology 5.19% 3.35% 61.31%

Source: S&P Capital IQ

Events Calendar

On Mobile/Tablet scroll to the right.

Company Name Ticker Event Date Event Type Q-Factor Score
The Michaels Companies, Inc. MIK 6/14/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: D
Jabil Inc. JBL 6/14/2018 Earnings Release Date US Large-Cap: C, US Information Technology: A
Finisar Corporation FNSR 6/14/2018 Earnings Release Date US Large-Cap: F, US Information Technology: D
CMBC Capital Holdings Limited SEHK:1141 6/14/2018 Estimated Earnings Release Date China All-Cap: D
China Merchants Port Holdings Company Limited SEHK:144 6/14/2018 Estimated Earnings Release Date China All-Cap: C
Sunac China Holdings Limited SEHK:1918 6/14/2018 Estimated Earnings Release Date China All-Cap: B
Hopson Development Holdings Limited SEHK:754 6/14/2018 Estimated Earnings Release Date China All-Cap: C
KB Home KBH 6/14/2018 Estimated Earnings Release Date US Large-Cap: D, US Consumer Discretionary: D
Lennar Corporation LEN 6/14/2018 Estimated Earnings Release Date US Large-Cap: D, US Consumer Discretionary: D
The 13 Holdings Limited SEHK:577 6/14/2018 Estimated Earnings Release Date China All-Cap: F
Vitasoy International Holdings Limited SEHK:345 6/14/2018 Earnings Release Date China All-Cap: A
Dali Foods Group Company Limited SEHK:3799 6/15/2018 Estimated Earnings Release Date China All-Cap: C

Source: Capital IQ