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Morning Brief

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Morning Quant Ride

Jul 06, 2018

US Stocks                                                                                                                                                                        Start Your Free Trial Today

  • Global stocks are mixed after a volatile trading week as the US and China formally implemented tariffs on USD$34bn in goods imported from each other last night
  • US stocks index futures are declining ahead of this morning’s June non-farm payrolls release with the Dow Jones minis -0.35%, S&P500 minis -0.19% and Nasdaq 100 minis -0.21%
  • The VIX is currently at 15.26 after closing at 14.97 yesterday
  • EEM OTM  August 17 Calls & Puts, XLU September 21 OTM Puts, SMH OTM August 17 Puts are the most heavily traded options contracts in the US pre-market
  • The yield on the US 10-year government bond is little changed at 2.829%
  • The USD$ Index (DXY) is -0.14% with a strengthening EUR€ (+0.21% to 1.1715) and AUD$ (+0.33% to 0.7412) driving the move in the greenback
  • Global oil prices are taking a pause from their recent rally with WTI -0.97% to USD$72.23/bbl and Brent -1.07% to USD$76.55/bbl on fears that escalating Sino-US trade tensions will curb global demand.  Yesterday’s surprise gain in US inventories reinforced investor concerns about demand/supply dynamics as Saudia Arabia recently increased production to offset supply disruptions to global oil markets from Venezuela and Iran

International Stocks

  • European stocks are mixed at their midday after the US formally institute tariffs on USD$34bn in imports from China: Euro Stoxx 600 -0.09%, FTSE 100 -0.31%, DAX +0.02%, and CAC 40 -0.05%
  • Global sovereign bonds are mixed with 10-year yields on New Zealand and Australia sovereign bonds up 3 basis points compared to a sell-off in Hong Kong  and Singapore 10-year yields which are down about 5 basis points, and European bonds are little changed
  • Auto and mining stocks are the biggest laggards in Europe as investors rotate into more defensive sectors like consumer staples and utilities
  • Market breadth in Europe is mixed with the advance/decline ratio sitting at 1.17
  • VSTOXX, the European stocks equivalent of the VIX, is flat at 15.7342 after closing at 15.7310; its high this week was 19.5604, which was reached this past Monday
  • Asian stocks shrugged off the news that the US and China have formally instituted trade tariffs on imports from each other to finish their trading sessions positive with the Nikkei 225 +1.12%,  CSI 300 +0.68%, HSI +0.47% and Hang Seng China Enterprise +0.14%
  • After the recent pullback in Asian stocks, the Hang Seng is currently trading with a Forward 12-months P/E of 10.72x while the Nikkei 225 is trading with a Forward 12-months P/E of 15.14x
  • The Hang Seng is trading with a Forward 12-months P/E that is the cheapest it has been since the first half of CY2016

Cryptos

  • Europe’s largest trader of ETFs, Flow Traders NV, is moving into cryptocurrencies. The Amsterdam-based speed trader is making markets in ETNs based on Bitcoin or Ether. This move follows the big five US speed traders that have been making markets in cryptocurrency futures or the underlying digital tokens. The firm traded USD$284bn of ETFs globally in the first quarter. The firm’s regulator, the AFM, does not like involvement by individuals and institutions in the cryptocurrency space. However, since the ETNs are regulated, there is little the regulator can do at this point
  • US cryptocurrency firm, Bittrex is joining London FinTech firm invest.com to launch a new cryptocurrency trading platform that is focused on the European market. Bittrex has consistently been one of the top cryptocurrency exchanges over the past couple of years. While the initial focus will be on EU customers in the beginning, Bittrex will be expanding services to other global markets.
  • SIX, the owner and operator of the Swiss stock exchange is launching a new fully-regulated cryptocurrency exchange. The newly announced digital exchange will be overseen by the Swiss national bank and the Swiss regulator, FINMA. The exchange is planned to launch in the first half of 2019 and will offer end-to-end trading, settlement and custody service for digital assets.
  • Quoine’s ICO platform is now allowing Bitcoin Cash users to use their BCH to take part in ICOs and private sales. The platform previously was permitting use of BTC, ETH, and Qash. Quoine’s ICO Platform, ICO Mission Control, claims to eliminate common risks associated with ICOs such as hacks, scams phishing and data leaks
  • Quantamize’s AI Machine Learning 3-Day Crypto Trading Signals were released yesterday and will be updated 7/8/2018. Currently, 18 cryptocurrencies have a rating of Buy. Quantamize’s AI/ML CryptoFolios were updated this Monday and will next be updated on 7/9/2018.

*Data in Price Return; Source: Stockdio

S&P 500 Sector Performance

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

Conviction Buy Laggards From Yesterday We Are Watching Today

Click name for Q-Factor rating and financial data.

Deckers Outdoor Corporation - 6.68% off its 52wkH on 06/21/2018, reports earnings on NA

Dollar General Corporation - 7.28% off its 52wkH on 01/29/2018, reports earnings on 08/24/2018

GMS Inc. - 34.97% off its 52wkH on 12/07/2017, reports earnings on 08/31/2018

SpartanNash Company - 7.81% off its 52wkH on 07/27/2017, reports earnings on 08/15/2018

The TJX Companies, Inc. - 1.81% off its 52wkH on 06/20/2018, reports earnings on 08/21/2018

Western Digital Corporation - 27.58% off its 52wkH on 03/16/2018, reports earnings on 07/26/2018

Stocks Trending in the News

Click name for Q-Factor rating and financial data.

Daimler AG (XTRA:DAI) is down 0.29% to €58.39 after sales of the company’s Mercedes-Benz vehicles fell 2.2% Y/Y in June

Deutsche Bank (DB:DBK) stock is up 3.33% to €9.86 per share, after a report from German magazine WirtschaftsWoche remarked that JP Morgan Chase (JPM) was interested in acquiring a stake in the beleaguered bank. JP Morgan has since denied the report. The Industrial and Commercial Bank of China (SEHK: 1938) was also reported to be interested in potentially acquiring Deutsche Bank

Biogen Inc (BIIB) shares are trading 11.61% higher to $333.50 pre-market, following positive results from the clinical trial of the company’s BAN2401 experimental drug, intended to treat Alzheimer’s

Inmarsat Plc (LSE: ISAT) has rejected a $4.2 billion acquisition proposal from EchoStar Corp (SATS). Inmarsat’s stock is down 7.03% to €4.89 per share following this development

Rolls-Royce Holdings (LSE:RR) has agreed to sell its loss-making ship-building unit to Norway’s Kongsberg Gruppen ASA (OB:KOG) for $660 million. Most of the 3,600 workers who were employed by the unit are based in Norway 

Starbucks Inc (SBUX) shares are up 0.19% pre-market to $48.70 after the company was upgraded from sell to a hold rating at DZ Bank

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
Facebook, Inc. FB Information Technology Internet Software and Services 2.97% 2.13% 12.46%
Lam Research Corporation LRCX Information Technology Semiconductor Equipment 2.73% -0.60% -6.66%
Micron Technology, Inc. MU Information Technology Semiconductors 2.64% 0.76% 28.50%
Broadcom Inc. AVGO Information Technology Semiconductors 2.55% 1.14% 0.00%
McCormick & Company, Incorporated MKC Consumer Staples Packaged Foods and Meats 2.44% 1.75% 15.91%

 

Losers Ticker Sector Industry 1 Day Return 5 Day Return  YTD
Old Dominion Freight Line, Inc. ODFL Industrials Trucking -0.75% -1.77% -1.77%
CME Group Inc. CME Financials Financial Exchanges and Data -0.51% -2.21% -2.21%
MSCI Inc. MSCI Financials Financial Exchanges and Data -0.49% -0.31% -0.31%
The Progressive Corporation PGR Financials Property and Casualty Insurance -0.41% -0.14% -0.14%
Copart, Inc. CPRT Industrials Diversified Support Services -0.31% 1.06% 1.06%

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
AnaptysBio, Inc. ANAB Healthcare Biotechnology -5.67% -3.25% -3.25%
Global Blood Therapeutics, Inc. GBT Healthcare Biotechnology -4.41% -4.90% -4.90%
EverQuote, Inc. EVER Information Technology Internet Software and Services -4.33% -1.32% -1.32%
Pivotal Software, Inc. PVTL Information Technology Application Software -1.96% -3.05% -3.05%
CNX Resources Corporation CNX Energy Oil and Gas Exploration and Production -1.94% -3.43% -3.43%

 

Losers Ticker Sector Industry 1 Day Return 5 Day Return  YTD
ImmunoGen, Inc. IMGN Healthcare Biotechnology 6.56% 13.46% 72.23%
Avaya Holdings Corp. AVYA Information Technology Application Software 5.72% 5.88% 21.14%
Loxo Oncology, Inc. LOXO Healthcare Biotechnology 4.45% 8.49% 123.57%
Airborne Wireless Network ABWN Telecommunication Services Alternative Carriers 4.17% -47.92% -99.94%
GameStop Corp. GME Consumer Discretionary Computer and Electronics Retail 4.13% 0.41% -18.50%

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
Celanese Corporation CE 7/15/2018 Estimated Earnings Release Date US Large-Cap: B
Mattel, Inc. MAT 7/15/2018 Estimated Earnings Release Date US Large-Cap: F, US Consumer Discretionary: F
PacWest Bancorp PACW 7/15/2018 Estimated Earnings Release Date US Large-Cap: B
The Charles Schwab Corporation SCHW 7/15/2018 Estimated Earnings Release Date US Large-Cap: C
HK Electric Investments and HK Electric Investments Limited SEHK:2638 7/15/2018 Estimated Earnings Release Date China All-Cap: B
Vinda International Holdings Limited SEHK:3331 7/15/2018 Estimated Earnings Release Date China All-Cap: C

Source: S&P Capital IQ