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Morning Brief

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

Morning Quant Ride

Jun 19, 2018

US Stocks                                                                                                                                                                                                        Start Your Free Trial Today

  • Global stocks are in the red this AM as escalating trade tensions between the US and China are spooking investors
  • US equity index futures are declining for the second day in a row with the Dow Jones minis -0.41%, S&P500 minis -0.21% and Nasdaq 100 minis +0.01%
  • The VIX is currently at 14.60 after closing last week at 11.98
  • EEM July 20 OTM Puts, Banc of America (BAC) June 22 OTM Calls, EFA July 20 OTM Calls & Puts, XLF July 20 OTM Calls are the most heavily traded options contracts in the US pre-market this AM
  • The yield on the US 10-year government bond is down to 2.875% after closing last week at 2.921%
  • Global sovereigns are rallying this morning with yields down across the board for G7 government debt
  • The USD$ Index is +0.47% with a strengthening JPY¥ +0.66% offset by declines in EUR€ -0.64%, GBP£ -0.66%, AUD$ -0.96%, and ZAR -1.71%, the Euro trading at 1.154 to the dollar while the Yen is trading at 109.80 to the dollar   
  • Oil prices are down across the board with WTI -1.69% at US$64.84 and Brent -0.77% at US$75.04
  • Precious metals are notable outliers this morning with Gold -0.40% and Silver -1.06%
  • Major cryptocurrencies are up across the board with Bitcoin (BTC) +4.83%, Ethereum (ATH) +8.35% and Ripple (XRP) +6.73%

International Stocks

  • European stocks are trading at a 2-month low as European investors digest the possibility of an all-out trade war between the US and China
  • Mining, auto and tech stocks are the largest laggards across Europe this AM with the Euro Stoxx 600 -0.75%, FTSE 100 -0.51%, CAC 40 -1.07% and DAX -1.37%
  • As highlighted yesterday, Euro Stoxx 600 remains below its 50-day and 200-day moving averages
  • VSTOXX, the European stocks equivalent of the VIX, is at 15.5016
  • Asian stocks declined for the fifth straight day after China said it will retaliate if the US were to raise tariffs on an additional USD$200bn imports from China
  • Japanese stocks slid the most in 3-months with Nikkei 225 -1.77% and TOPIX -1.55% -- chemicals and electronics manufacturers stocks were the largest underperformers
  • Chinese and Hong Kong stocks opened the week negative following Tuen Ng Festival on Monday.  Hang Seng -2.78%, Hang Seng China Enterprise -3.18% and CSI 300 -3.53%

Cryptos

  • Three separate industry trackers have compiled data for cryptocurrency hedge fund performance for May and year to date. While all three benchmarks reflect declines roughly in the same amount, the difference between benchmarks are due to tracking different funds. Barclay hedge showed that cryptocurrency hedge funds were up 44.86% in April, yet they were down 19.09% in May and are down 34.57% YTD.
  • The Malta Stock Exchange (MSE) has announced that cryptocurrency exchange Binance will be supporting its newly launched program to support FinTech and crypto startups. The stock exchange recently tweeted that twelve FinTech companies will be utilizing their facilities as an accelerator program.
  • The Swiss Crypto Fund AG has received a license to distribute crypto funds to qualified investors in Switzerland. This decision has been backed by the country’s financial regulator, FINMA. The fund is a subsidiary of the Swiss Crypto Finance Group (CFG). It is reported that this is the first time a crypto business has been granted permission to distribute funds by the authorities in Switzerland.
  • The city of Zug, home of the Swiss Crypto Valley, is accepting payments in bitcoin and ether for municipal services, including company registrations

*Data in Price Return, Source: Stockdio

S&P 500 Sector Performance

*Data in Total Return as of Previous Day’s EOD, Source: Capital IQ

Conviction Buy Laggards From Yesterday We Are Watching Today

Click name for Q-Factor rating and financial data.

Broadcom Inc. - 2.69% off its 52wkH on 11/17/2017, reports earnings on 09/06/2018

American Eagle Outfitters, Inc. - 4.51% off its 52wkH on 06/11/2018, reports earnings on 08/17/2018

Huntsman Corporation - 9.81% off its 52wkH on 01/25/2018, reports earnings on 07/27/2018

Applied Materials, Inc. - 22.56% off its 52wkH on 03/12/2018, reports earnings on 08/16/2018

Intel Corporation - 7.60% off its 52wkH on 06/04/2018, reports earnings on 07/26/2018

Lam Research Corporation - 25.83% off its 52wkH on 03/13/2018, reports earnings on 07/26/2018

Stocks Trending in the News

Click name for Q-Factor rating and financial data.

According to a New York Times report, the Trump Administration told Apple Inc (AAPL) CEO Tim Cook that the company would be spared from any tariffs on China. Apple Inc’s iPhone is manufactured in China. Apple Inc’s iPhone is manufactured in China. Apple Inc has sold more iPhones in China than in the US over the last 3 years, and the company derives 18% of its annual revenue from mainland China, according to the NYT report

GameStop (GME) is reportedly gauging buyout interest with private equity firms, as the struggling company fails to compete with other online retailers such as Amazon (AMZN). Shares of GameStop traded up 9% yesterday

The US Senate approved a defense bill that effectively blocks Chinese telecom firm ZTE Corp (763 HK) from buying US technology components. This comes after the Trump Administration had announced a deal with ZTE Corp earlier this month, in which the company would pay a $1.2 billion in exchange for resuming the purchase of US technology. ZTE Corp shares traded 24.80% lower today, to HK$9.85

Debenhams Plc (DEB.LN) trading 7.96% lower to £18.04 after the British department store company lowered its profit forecast for FY2018 for the third time this year, as the company boosts its spending in turnaround efforts.

Roche (ROG.SW), a Swiss drug maker, has agreed to buy Foundation Medicine (FMI) for $2.4 billion, or $137 per share. Foundation Medicine’s stock is up 28.32% before the open to $136.60

Sirius XM Holdings (SIRI) shares are down 1.44% to $7.53 pre-market, after the company was downgraded to a hold from a buy rating at Pivotal Research Group LLC.

A disgruntled Tesla Inc (TSLA) employee broke into the firm’s manufacturing operations system and sent highly sensitive data to unidentified third parties according to an email sent by Elon Musk to his staff. Tesla stock is down 1.71% to $364.50 pre-market.

Volkswagen AG (VOW.GR) has named Bram Schot at the interim CEO of the company’s Audi division, following the arrest of former CEO Rupert Stadler. Volkswagen’s shares are down 2.14% to 150.70

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
FleetCor Technologies, Inc. FLT Information Technology Data Processing and Outsourced Services 6.45% 6.15% 14.56%
VeriSign, Inc. VRSN Information Technology Internet Software and Services 2.05% 4.20% 26.87%
Broadridge Financial Solutions BR Information Technology Data Processing and Outsourced Services 1.82% 0.62% 28.57%
Tractor Supply Company TSCO Consumer Discretionary Specialty Stores 1.63% 0.52% 1.15%
Total System Services, Inc. TSS Information Technology Data Processing and Outsourced Services 1.61% 0.05% 11.06%
Losers Ticker Sector Industry 1 Day Return 5 Day Return  YTD
Comcast Corporation CMCS.A Consumer Discretionary Cable and Satellite -3.84% 0.80% 4.49%
CDK Global, Inc. CDK Information Technology Application Software -2.81% -1.40% -0.09%
The Hershey Company HSY Consumer Staples Packaged Foods and Meats -2.61% 0.36% 1.68%
Lam Research Corporation LRCX Information Technology Semiconductor Equipment -2.15% -5.12% -11.00%
Colgate-Palmolive Company CL Consumer Staples Household Products -2.19% 0.40% 0.35%

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
Ionis Pharmaceuticals, Inc. IONS Healthcare Biotechnology -6.37% -6.95% -6.53%
Pivotal Software, Inc. PVTL Information Technology Application Software -3.49% -1.20% 51.65%
EVO Payments, Inc. EVOP Information Technology Data Processing and Outsourced Services -3.48% 4.96% 3.35%
Incyte Corporation INCY Healthcare Biotechnology -2.62% 2.10% 5.49%
Array BioPharma Inc. ARRY Healthcare Biotechnology -2.40% -1.63% 7.03%
Losers Ticker Sector Industry 1 Day Return 5 Day Return  YTD
Longfin Corp. LFIN Financials Financial Exchanges and Data 32.81% 94.51% -84.90%
AnaptysBio, Inc. ANAB Healthcare Biotechnology 7.31% 14.47% -19.83%
Carrizo Oil & Gas, Inc. CRZO Energy Oil and Gas Exploration and Production 6.50% -0.18% 30.92%
Diamondback Energy, Inc. FANG Energy Oil and Gas Exploration and Production 6.06% 3.57% -2.91%
Editas Medicine, Inc. EDIT Healthcare Biotechnology 4.61% 8.34% 27.66%

Source: S&P Capital IQ

Events Calendar

On Mobile/Tablet scroll to the right

Company Name Ticker Event Date Event Type Q-Factor Score
Wynnstay Group plc WYN 6/19/2018 Estimated Earnings Release Date US Large-Cap: C, US Consumer Discretionary: B
Stream Ideas Group Limited SEHK:8401 6/19/2018 Earnings Release Date China All-Cap: F
Winnebago Industries, Inc. WGO 6/20/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: D
The Kroger Co. KR 6/20/2018 Estimated Earnings Release Date US Large-Cap: C, US Consumer Staples: D
Sa Sa International Holdings Limited SEHK:178 6/20/2018 Earnings Release Date China All-Cap: B
Pacific Textiles Holdings Limited SEHK:1382 6/20/2018 Earnings Release Date China All-Cap: B
iKang Healthcare Group, Inc. KANG 6/21/2018 Earnings Release Date China All-Cap: A
Darden Restaurants, Inc. DRI 6/21/2018 Earnings Release Date US Large-Cap: A, US Consumer Discretionary: A
Patterson Companies, Inc. PDCO 6/21/2018 Earnings Release Date US Large-Cap: C
Commercial Metals Company CMC 6/21/2018 Earnings Release Date US Large-Cap: D
Red Hat, Inc. RHT 6/21/2018 Earnings Release Date US Large-Cap: C, US Information Technology: C
Café de Coral Holdings Limited SEHK:341 6/21/2018 Earnings Release Date China All-Cap: C
China Gas Holdings Limited SEHK:384 6/21/2018 Earnings Release Date China All-Cap: A
RYB Education, Inc. RYB 6/21/2018 Estimated Earnings Release Date China All-Cap: F
CarMax, Inc. KMX 6/21/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: C
China Soft Power Technology Holdings Limited SEHK:139 6/21/2018 Estimated Earnings Release Date China All-Cap: F
Nameson Holdings Limited SEHK:1982 6/21/2018 Earnings Release Date China All-Cap: C
Concha plc CHA 6/21/2018 Estimated Earnings Release Date China All-Cap: C
Hailiang Education Group Inc. HLG 6/21/2018 Estimated Earnings Release Date China All-Cap: C
LEAP Holdings Group Limited SEHK:1499 6/21/2018 Earnings Release Date China All-Cap: C
Twintek Investment Holdings Limited SEHK:6182 6/21/2018 Earnings Release Date China All-Cap: D
Sparkle Roll Group Limited SEHK:970 6/21/2018 Earnings Release Date China All-Cap: D

Source: S&P Capital IQ