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Morning Brief

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Morning Quant Ride

Jul 12, 2018

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US Stocks

  • Global stocks are advancing this morning following news that the US and China continue to hold talks over trade with Dow Jones minis +0.74%, S&P500 minis +0.51% and Nasdaq 100 minis +0.49%
  • The VIX is currently at 12.99 after reaching as high as 14.15 yesterday
  • Transocean (RIG) January 2019 OTM Puts and July 13 & July 20 OTM 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 2.862%
  • Global sovereign bonds are relatively stable for the second day in a row as the average move on 10-year sovereign yields in the range of 1 to 2 basis points
  • The USD$ Index (DXY) is +0.18% with a weakening EUR€ (-0.15% to 1.1655) and JPY¥ (-0.44% to 112.51) driving strength in the greenback
  • JPY¥ has weakened 1.44% for the week and is back to early 2018 levels as it appears the JPY¥ is no longer a go-to safe haven asset with escalating Sino-US trade tensions
  • Global oil prices are rebounding this this morning with WTI +0.72% to USD$70.91/bbl and Brent +1.17% to USD$74.26/bbl after a sharp sell-off yesterday that was the largest since CY2016
  • International Energy Agency (IEA) warns that total OPEC production may be capped by supply losses.  This commentary should support global crude oil prices at current levels.

International Stocks

  • European stocks have reversed from yesterday’s negative trading, as Sino-American trade war jitters subside following reports of potential US-China trade discussions: Euro Stoxx 600 +0.68%, FTSE 100 +0.80%, DAX +0.64%, and CAC 40 +0.71%
  • Media, travel & leisure, and healthcare stocks are leading the rise in European stocks this AM
  • VSTOXX is at 13.79 today, down 5.55% after closing at 14.59 yesterday
  • Asian stocks finished broadly higher on positive trade sentiment, with the Hang Seng +0.60%, the CSI 300 +2.16%, and the Shanghai Composite +2.16%

Cryptos

  • Etoro, the social media-based trading platform is looking to add up to six more cryptocurrencies on its platform. The firm is performing due diligence on six crypto tokens and will likely add four or five tokens. One of the firm’s managing directors, Iqbal Ganhdam claimed that the recent downturn in crypto demand has allowed companies and exchanges to update their systems. The managing director also mentioned that mainstream media needs to be more patient with crypto as email took 35 years to develop and noted that powerhouses such as eBay and Amazon had scalability issues when they were first launched
  • The Shanghai Stock Exchange is looking to use a distributed ledger technology (DLT) in the securities market. The exchange published a research paper this week, analyzing DLT in the different stages of a security transaction. The Shanghai Stock Exchange is currently the fourth largest in the world with a market capitalization of USD$5.12 trillion
  • Lightspeed Venture Partners, a venture capital firm that was an early investor in Snap has recently raised USD$1.8bn for new investments, including cryptocurrency projects. The fund is looking to expand into Southeast Asia which has a thriving digital ecosystem.
  • Quantamize’s AI Machine Learning 3-Day Crypto Trading Signals were updated yesterday morning. 6 cryptocurrencies are currently rated as buy. The next update will be 7/14/18. Quantamize’s CryptoFolios were updated this past Monday and will be updated next Monday

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

S&P 500 Sector Performance

*Data in price return.

Conviction Buy Laggards From Yesterday We Are Watching Today

Click name for Q-Factor rating and financial data.

Expeditors International of Washington, Inc. - 7.22% off its 52wkH on 06/12/2018, reports earnings on 08/07/2018

Ichor Holdings, Ltd. - 40.72% off its 52wkH on 10/20/2017, reports earnings on 08/07/2018

Louisiana-Pacific Corporation - 11.35% off its 52wkH on 04/17/2018, reports earnings on 08/01/2018

MCBC Holdings, Inc. - 8.09% off its 52wkH on 05/18/2018, reports earnings on 09/07/2018

Rudolph Technologies, Inc. - 14.91% off its 52wkH on 05/30/2018, reports earnings on 07/27/2018

The TJX Companies, Inc. - 1.51% off its 52wkH on 06/20/2018, reports earnings on 08/21/2018

Stocks Trending in the News

Click name for Q-Factor rating and financial data.

  • Bayerishce Motoren Werke (BMW.GR) shares are trading 1.13% higher to €79.68 today, after reports that the company is set to become the first foreign automaker to control a Chinese joint venture. China reformed regulations in the automotive industry earlier this year, allowing foreign companies to acquire larger stakes in Chinese auto firms. BMW currently holds a 50% stake in a partnership with Brilliance China Automotive Holdings (SEHK:1114)
  • Comcast Corp (CMCSA) has increased its bid for Sky Plc to £14.75/share, or £26bn total, to rival the previous bid from Twenty-Frist Century Fox (FOXA)
  • Commerce Bancshares (CBSH) reported 2Q2018 EPS that was higher than expected. Shares of Commerce Bancshares are up 7.09% to $71.10 pre-market
  • Delta Airlines (DAL) reported 2Q2018 EPS that was higher than the consensus ($1.77 vs $1.72 projected). Delta is trading 1.12% higher to $50.40 pre-market
  • Johnson & Johnson (JNJ) has been upgraded to neutral from a sell rating at Goldman Sachs. John & Johnson shares are 0.84% higher to $127.30 before the open
  • Netflix Inc (NFLX) is down 0.72% pre-market to $415.65, after the company was downgraded from buy to a neutral rating at UBS
  • Papa John’s (PPZA) chairman John Schnatter has resigned from his position after admitting to and apologizing for the use of a racial slur during a conference call. Papa John’s stock is up 1.90% to $49.25 before the open
  • ZTE Corp (SEHK:763) traded 25.00% higher today to HKD$ 13.94, after the company signed a deal with the Trump Administration which will allow the company to continue doing business with US suppliers. Allowing ZTE Corp back into the US market was a key trade demand by Chinese officials

Cryptocurrencies Today

*Source: StockDio

Stock Movers

Conviction Buy Winners and Losers

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Winners  Ticker Sector Industry 1 Day Return 5 Day Return  YTD
Micron Technology, Inc. MU Information Technology Semiconductors -2.80% 1.78% 31.76%
HP Inc. HPQ Information Technology Technology Hardware, Storage and Peripherals -3.39% 0.22% 9.76%
IDEXX Laboratories, Inc. IDXX Healthcare Healthcare Equipment 0.03% 3.83% 49.74%
Church & Dwight Co., Inc. CHD Consumer Staples Household Products 0.35% 0.00% 8.95%
AbbVie Inc. ABBV Healthcare Biotechnology -3.93% -2.02% -1.81%
Losers Ticker Sector Industry 1 Day Return 5 Day Return  YTD
Zoetis Inc. ZTS Healthcare Pharmaceuticals -1.99% -2.72% -0.81%
Fortive Corporation FTV Industrials Industrial Machinery -1.06% -1.27% -1.13%
Chemed Corporation CHE Healthcare Healthcare Services 0.46% 0.20% 0.17%
Zions Bancorporation ZION Financials Regional Banks -0.49% 0.95% 0.76%
Jones Lang LaSalle Incorporated JLL Real Estate Real Estate Services -2.55% -1.95% -0.39%

Source: S&P Capital IQ

Conviction Short Winners and Losers

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Winners Ticker Sector Industry 1 Day Return 5 Day Return  YTD
Airborne Wireless Network ABWN Telecommunication Services Alternative Carriers -25.00% -53.85% -75.00%
Global Blood Therapeutics, Inc. GBT Healthcare Biotechnology -0.58% -8.61% -10.12%
Loxo Oncology, Inc. LOXO Healthcare Biotechnology 2.88% -4.69% 4.37%
Spark Therapeutics, Inc. ONCE Healthcare Biotechnology -0.19% -4.81% 6.27%
Geron Corporation GERN Healthcare Biotechnology -0.28% -4.27% 4.66%
Losers Ticker Sector Industry 1 Day Return 5 Day Return  YTD
Neuronetics, Inc. STIM Healthcare Healthcare Equipment 0.08% 2.51% 0.00%
AK Steel Holding Corporation AKS Materials Steel -2.12% 0.44% -18.55%
United States Steel Corporation X Materials Steel -0.68% 2.66% 3.10%
Coty Inc. COTY Consumer Staples Personal Products -2.70% -0.78% -29.36%
Sage Therapeutics, Inc. SAGE Healthcare Biotechnology 0.86% 3.17% 0.32%

Source: S&P Capital IQ

Events Calendar

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Company Name Ticker Event Date Event Type Q-Factor Score
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
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
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
Bank of America Corporation BAC 7/16/2018 Earnings Release Date US Large-Cap: C
BlackRock, Inc. BLK 7/16/2018 Earnings Release Date US Large-Cap: A
Netflix, Inc. NFLX 7/16/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: B
The Progressive Corporation PGR 7/16/2018 Estimated Earnings Release Date US Large-Cap: A
J.B. Hunt Transport Services, Inc. JBHT 7/16/2018 Estimated Earnings Release Date US Large-Cap: B, US Industrials: A
Johnson & Johnson JNJ 7/16/2018 Estimated Earnings Release Date US Large-Cap: C
Altaba Inc. AABA 7/16/2018 Estimated Earnings Release Date US Large-Cap: A, US Information Technology: B
Prologis, Inc. PLD 7/16/2018 Estimated Earnings Release Date US Large-Cap: C