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Morning Brief

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Morning Quant Ride

Jul 05, 2018

US Stocks                                                                                                                                                                               Start Your Free Trial Today

  • Global stocks are mixed ahead of the July 6th self-imposed deadline for the US to implement tariffs on USD$34bn worth of imports from China
  • US stocks index futures are advancing after the 4th of July holiday with the Dow Jones minis +0.66%, S&P500 minis +0.67% and Nasdaq 100 minis +0.76%
  • The VIX is currently at 14.90 after reaching 18.08 this past Monday
  • SPY OTM July 20 Puts, Altaba (AABA) July 20 and August 17 OTM Calls & Puts, and QQQ July 20 OTM Puts are the most heavily traded options contracts in the US pre-market
  • The yield on the US 10-year government bond is +2.9 basis points to 2.860%
  • Global sovereign bonds are flat to negative this morning with the yields on across all tenors are up in the range of 1 to 3 basis points this morning
  • The USD$ Index (DXY) is -0.26% with a strengthening  GBP£ (+0.24% to 1.3262) and EUR€ (+0.42% to 1.1706)
  • EUR€-USD$ is rising on speculation of earlier than expected monetary tightening by European Central Bank (ECB) with the next ECB meeting scheduled for July 26
  • Oil prices continue their positive move this week with WTI +0.66% to USD$74.62/bbl and Brent +0.12% to USD$78.33/bbl as an increase in production from Saudi Arabia is expected to be more than offset by the loss in supply from Venezuela and Iran

International Stocks

  • European stocks are advancing on expectations for a cross-Atlantic trade deal with the Euro Stoxx 600 +0.82%, FTSE 100 +0.59%, DAX +1.52%, and CAC 40 +1.24%
  • Auto, banks and energy stocks are leading the positive move in European stocks
  • European energy stocks are rallying on the move in oil with Royal Dutch Shell (ENXTAM:RDSA) +2.08% and the top mover in the FTSE 100; Total SA (ENXTPA:FP) is +2.46% and one of the top movers in the Euro Stoxx 50 and Euro Stoxx 600
  • Market breadth in Europe is positive with 458 of the 600 stocks in the Euro Stoxx 600 positive this morning
  • VSTOXX, the European stocks equivalent of the VIX, is sitting at 15.4250 after reaching as high as 19.5604 this past Monday
  • Asian stocks fell across the board with the Nikkei 225 -0.78%,  CSI 300 -0.63%, HSI -0.21% and Hang Seng China Enterprise -0.98% ahead of this Friday’s deadline for the US to implement tariffs on imports on goods from China worth USD$34bn
  • Beijing officials said they won’t implement tariffs ahead of the US government and stated that approximately 60% of the goods set to be affected by the tariffs are made by non-Chinese companies
  • Japanese electronics stocks sold off in sympathy with Chinese stocks with the China tech-focused Shenzhen composite -2.20%

Cryptos

  • Transaction costs for Ethereum have been much higher than usual over the past few days. It is reported that miners have been collecting 10x more fees than average over the past 5 days. It is reported that this increase is caused by a cryptocurrency exchange China, FCoin, which has inappropriately incentivized users to deposit tokens. As a result, there has been an influx of ERC20 tokens. The reason for the deposits is because FCoin is letting users vote via depositing tokens for its next cryptocurrency listing
  • Thailand will govern initial coin offerings (ICOs) with a new rule which takes effect on July 16th. Any project that wishes to conduct an ICO must file an application with regulators before the token sale. However, Thailand’s SEC will first screen ICO portals, where ICO token sales take place. Approved ICO portals will be responsible for screening ICOs primarily and then the SEC will make a final decision
  • Independent Reserve, the first regulated cryptocurrency exchange in Australia is expanding and will be listing Ripple. The platform also allows trading in Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. Users can purchase Ripple in $USD, $AUD, and $NZD
  • Malta has established a comprehensive legal framework for cryptocurrencies. The parliament of Malta has passed three bills regulating cryptocurrency activities: the Malta Digital Authority Act (MDIA), the Innovative Technological Arrangement and Services Act (ITASA) and the Virtual Financial Asset Act (VFA). Malta’s Junior Minister for Financial Services, Silvio Schembri claims that the country is the first to provide legal certainty to the cryptocurrency field

*Data in Price Return; Source: Stockdio

S&P 500 Sector Performance

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

Conviction Buy Laggards From Tuesday We Are Watching Today

Click name for Q-Factor rating and financial data.

Advanced Energy Industries, Inc. - 39.42% off its 52wkH on 10/30/2017, reports earnings on 08/01/2018

Broadcom Inc. - 11.96% off its 52wkH on 01/00/1900, reports earnings on 09/06/2018

Ichor Holdings, Ltd. - 43.09% off its 52wkH on 10/20/2017, reports earnings on 08/07/2018

Lam Research Corporation - 28.79% off its 52wkH on 03/13/2018, reports earnings on 07/26/2018

Micron Technology, Inc. - 20.38% off its 52wkH on 05/30/2018, reports earnings on 09/28/2018

SMART Global Holdings, Inc. - 45.81% off its 52wkH on 01/00/1900, reports earnings on 09/28/2018

Stocks Trending in the News

Click name for Q-Factor rating and financial data.

Boeing Co (BA) is creating a joint-venture with Brazilian partner Embraer SA (BOVESPA:EMBR3), worth $4.75 billion, as Boeing expands its reach into the South American market for small jetliners. Based on the agreement, Boeing will own 80 percent of Embraer’s commercial airplane and services business, while Embraer maintains 20 percent ownership

Daimler AG (XTRA:DAI), Volkswagen AG (XTRA:VOW3), and Bayerische Motoren Werke (DB:BMW) are trading 3.24%, 3.81%, and 3.56% higher today, respectively. According to a Handelsblatt report, Richard Grenell, the US ambassador to Germany, has informed German auto makers that the US would support a 0% tariff for US and European car manufacturers

Glencore Plc (LSE:GLEN) shares are trading 2.94% higher to £3.29 per share after the company announced that it will be repurchasing up to USD$1 billion worth of shares

Praxair Inc (PX) has agreed to divest a significant portion of its European operations to Taiyo Nippon Sanso Corp for $5.85 billion, in order to meet the requirements of European regulators ahead of Praxair’s planned $80 billion merger with Linde AG (DB:LIN). The union of Praxair and Linde would create the world’s largest supplier of industrial gasses

Qorvo Inc (QRVO) is trading 2.27% higher to $79.20 after the company was upgraded from to overweight from a sector weight rating at KeyBanc Capital Markets

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
Mettler-Toledo International Inc. MTD Healthcare Life Sciences Tools and Services 1.71% 0.34% -6.29%
WellCare Health Plans, Inc. WCG Healthcare Managed Healthcare 1.16% 1.40% 24.16%
ServiceMaster Global Holdings, Inc. SERV Consumer Discretionary Specialized Consumer Services 1.06% 0.98% 17.13%
PPL Corporation PPL Utilities Electric Utilities 1.04% 1.72% -6.17%
Berry Global Group, Inc. BERY Materials Metal and Glass Containers 0.98% 1.11% -20.83%

 

Losers Ticker Sector Industry 1 Day Return 5 Day Return  YTD
Analog Devices, Inc. ADI Information Technology Semiconductors -1.87% -1.47% -1.47%
PVH Corp. PVH Consumer Discretionary Apparel, Accessories and Luxury Goods -1.79% -2.57% -2.57%
CME Group Inc. CME Financials Financial Exchanges and Data -1.75% -1.71% -1.71%
Kansas City Southern KSU Industrials Railroads -1.59% -0.76% -0.76%
Apple Inc. AAPL Information Technology Technology Hardware, Storage and Peripherals -1.74% -0.64% -0.64%

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
Vistra Energy Corp. VST Utilities Independent Power Producers and Energy Traders -5.00% -3.59% -3.59%
Puma Biotechnology, Inc. PBYI Healthcare Biotechnology -3.41% -2.87% -2.87%
AnaptysBio, Inc. ANAB Healthcare Biotechnology -3.56% 2.56% 2.56%
Pivotal Software, Inc. PVTL Information Technology Application Software -2.83% -1.11% -1.11%
Domo, Inc. DOMO Information Technology Application Software -2.27% -14.98% -14.98%

 

Losers Ticker Sector Industry 1 Day Return 5 Day Return  YTD
Tricida, Inc. TCDA Healthcare Pharmaceuticals 9.76% 10.17% 0.00%
Airborne Wireless Network ABWN Telecommunication Services Alternative Carriers 9.09% -50.00% -99.94%
Overstock.com, Inc. OSTK Consumer Discretionary Internet and Direct Marketing Retail 8.98% 9.96% -42.10%
Esperion Therapeutics, Inc. ESPR Healthcare Biotechnology 7.78% 12.04% -33.31%
Roku, Inc. ROKU Consumer Discretionary Consumer Electronics 5.20% 6.85% -12.05%

Source: S&P Capital IQ

Events Calendar

On Mobile/Tablet scroll to the right.

Company Name Ticker Event Date Event Type Q-Factor Score
Healthcare Services Group, Inc. HCSG 7/9/2018 Estimated Earnings Release Date US Large-Cap: D, US Industrials: C
PepsiCo, Inc. PEP 7/10/2018 Earnings Release Date US Large-Cap: C, US Consumer Staples: B
MSC Industrial Direct Co., Inc. MSM 7/10/2018 Estimated Earnings Release Date US Large-Cap: B, US Industrials: A
Fastenal Company FAST 7/11/2018 Earnings Release Date US Large-Cap: B, US Industrials: B
Delta Air Lines, Inc. DAL 7/11/2018 Estimated Earnings Release Date US Large-Cap: C, US Industrials: B
Bank of the Ozarks OZRK 7/11/2018 Estimated Earnings Release Date US Large-Cap: C
Commerce Bancshares, Inc. CBSH 7/12/2018 Earnings Release Date US Large-Cap: B
Cintas Corporation CTAS 7/12/2018 Estimated Earnings Release Date US Large-Cap: A, US Industrials: B
First Horizon National Corporation FHN 7/12/2018 Estimated Earnings Release Date US Large-Cap: C
YUM! Brands, Inc. YUM 7/12/2018 Estimated Earnings Release Date US Large-Cap: C, US Consumer Discretionary: B
JPMorgan Chase & Co. JPM 7/13/2018 Earnings Release Date US Large-Cap: B
The PNC Financial Services Group, Inc. PNC 7/13/2018 Earnings Release Date US Large-Cap: C
Citigroup Inc. C 7/13/2018 Earnings Release Date US Large-Cap: B
Wells Fargo & Company WFC 7/13/2018 Earnings Release Date US Large-Cap: D
First Republic Bank FRC 7/13/2018 Earnings Release Date US Large-Cap: C

Source: S&P Capital IQ