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Morning Brief

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Morning Quant Ride

Jul 19, 2018

US Stocks

 

 

  • Global stocks are declining this AM as mixed earnings results overshadows positive comments by US Federal Reserve Chairman Jerome Powell about the US economy during his 2-day testimony to the US Senate Banking Panel yesterday
  • European Union (EU) is preparing a list of American goods to hit with tariffs in the event a trip to Washington next week fails to stop the US government from implementing tariffs on car imports from EU countries
  • US stocks index futures are pointing to a negative open in NY with the Dow Jones minis -0.21%, S&P500 minis -0.24% and Nasdaq 100 minis -0.32%
  • The VIX is up to 12.45 this AM after closing at 12.10 yesterday
  • XLF September 2018 OTM Calls, HYG August 17 OTM Calls and SPY July 20 OTM Calls are the most heavily traded options contracts in the US pre-market
  • The yield on the US 10-year government bond is +2 basis points to 2.889%
  • The USD$ Index (DXY) is +0.46% with the AUD$ (-0.80% to 0.7339), EUR (-0.44% to 1.1587), GBP£ (-0.72% to 1.2975) and ZAR (-1.48% to 13.47) selling off against the Greenback this morning
  • Global oil prices are selling off with WTI -0.93% to USD$68.12/bbl and Brent -1.04% to USD$72.14/bbl following a surprise gain in US crude inventories
  • Precious metals appear to be disconnected with the risk-off mood in global stock with Gold -0.95% to USD$1,212.85/Oz and Silver -1.93% to USD$15.26/Oz

International Stocks

  • European stocks are little changed this AM with advances in oil stocks offset by declines in tech and media stocks: Euro Stoxx 600 -0.15%, FTSE 100 +0.05%, DAX -0.39%, and CAC 40 -0.50%
  • VSTOXX, the European stocks equivalent of the VIX, is currently sitting at 12.7975 after closing at 11.9617 yesterday, the lowest reading of the VSTOXX in over a month
  • Asian stocks finished their trading sessions negative after starting off positive : Nikkei 225 -0.13%, CSI 300 –0.09%, HSI -0.38% and Hang Seng China Enterprise -0.52%
  • CNY is down 0.88%  to 6.7783 against the USD$, the lowest level in a year, following the decision by the People’s Bank of China (PBOC) to weaken its daily fixing rate to 6.7.  The PBOC decision is being interpreted as a sign that the PBOC will not defend the Yuan and it is comfortable with a gradual depreciation of the currency
  • Global sovereign bonds are little changed this AM 10-year yields on Eurozone country government debt up 1 to 2 basis points across the board
  • Italian 10-year yields are down 2 basis points to 2.480% on expectations that 2Q GDP results will surprise to the upside

Cryptos

  • Major cryptocurrencies are falling today, with Bitcoin -0.41% to USD$7,385.28, Ethereum -3.96% to USD$479.19, XRP -5.07% to USD$0.4854, and Bitcoin Cash -4.51% to USD$829.05
  • The Big Four accounting firms, Deloitte, EY, KPMG and PwC, announced plans to test a blockchain platform in Taiwan.  The blockchain platform will seek verify company transactions with third parties.  
  • CrimsonLogic, an electronic Singapore-backed government service, is launching a blockchain platform focused on cross-border trade. 
  • In his testimony on the US economy during testimony to the House of Representatives Financial Services Committee, US Fed Chairman Powell stated he believes cryptocurrencies have no intrinsic value and are great for money laundering.

*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.

AbbVie Inc. - 25.00% off its 52wkH on 01/26/2018, reports earnings on 07/27/2018

Apple Inc. - 1.96% off its 52wkH on 06/07/2018, reports earnings on 07/31/2018

ARRIS International plc - 13.07% off its 52wkH on 08/03/2017, reports earnings on 08/01/2018

Exelon Corporation - 2.96% off its 52wkH on 07/09/2018, reports earnings on 08/03/2018

Kellogg Company - 4.54% off its 52wkH on 07/06/2018, reports earnings on 08/02/2018

Louisiana-Pacific Corporation - 12.06% off its 52wkH on 04/17/2018, reports earnings on 08/07/2018

Western Digital Corporation - 26.35% off its 52wkH on 03/16/2018, reports earnings on 07/26/2018

Cryptocurrencies Today

*Source: Stockdio

Stocks Trending in the News

Click name for Q-Factor rating and financial data.

Alcoa Corp (AA) lowered its FY2018 earnings forecast to a range of $3 billion to $3.2 billion, down from a range of $3.5 billion to $3.7 billion, due to negative effects from Sino-American tariffs. Alcoa’s shares are relatively unchanged pre-market 

American Express Co (AXP) is 2.75% lower to $100.15, after the company missed 2Q2018 revenue estimates ($10.00 billion vs $10.07 billion forecasted)

AT&T’s (T) entertainment division head discussed with employees the need for their HBO network to adopt a more aggressive strategy with programing.  This strategy is closer to Netflix’s (NFLX) which acquires much more programing from the outside than does HBO

Amazon (AMZN) confirmed its AWS unit is not actively building a commercial network switch.  The news sent both Cisco (CSCO) and Juniper Networks (JNPR) higher as both would be direct competitors in this business

Blackstone Group (BX) reported 2Q2018 EPS that was higher than projected ($0.90 vs $0.74 estimated). Shares of Blackstone are up 1.41% to $36.23 pre-market

Colgate-Palmolive (CL) has advanced 1.14% to $65.55 before the open, following an upgrade at UBS to buy from a neutral rating

eBay (EBAY) shares are down 7.11% to $35.25 pre-market, after the company’s 2Q2018 net revenue ($2.6 billion vs $2.66 billion consensus) and 3Q2018 EPS guidance ($0.55 vs $0.56 projected) were both lower than expected

International Business Machines (IBM) 2Q2018 EPS came in higher than estimated ($3.08 vs $3.04 anticipated). IBM stock is 2.46% higher to $148.08 pre-market

Morgan Stanley (MS) shares are 0.22% lower to $50.45 pre-market, despite the company being upgraded to marker perform from an underperform rating at Bernstein

Proctor & Gamble (PG) has been downgraded to neutral from a buy rating at UBS. Shares of Proctor & Gamble have declined 1.42% to $78.59 before the open

Publicis Groupe SA (ENXTPA:PUB) announced that its organic revenue fell 2.1% in 2Q2018, due to a combination of volatility in its US health care business and data protection regulations in Europe. Publicis’ stock is down 7.31% to €54.04 today

SAP (DB:SAP) raised guidance for this year and 2020, citing accelerating cloud sales.  However, cloud bookings, a key indicator of future growth grew just 20%, below the segment’s 40% growth rate.  SAP shares are down 1.78% to €102.82

Tesla Inc (TSLA) is down 1.96% to $317.50, after the company was downgraded to underperform from a hold rating at Needham

Unilever NV (ENXTAM:UNA) shares are trading 2.00% higher to €48.665, after the company reported 1H operating profit that was higher than expected (€4.91 billion vs €4.85 billion projected)

United Rentals (URI) posted 2Q2018 EPS that was firmly above the consensus ($3.85 vs $3.44 expected), but shares are down 2.78% to $150.60 due to rising concerns about the company facing margin pressure

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
Five Below, Inc. FIVE Consumer Discretionary Specialty Stores 4.48% 5.39% 61.07%
Cigna Corporation CI Healthcare Managed Healthcare 4.12% 2.69% -12.48%
Norfolk Southern Corporation NSC Industrials Railroads 3.19% 0.28% 10.36%
First American Financial Corporation FAF Financials Property and Casualty Insurance 2.43% 3.11% -4.64%
Hilton Worldwide Holdings Inc. HLT Consumer Discretionary Hotels, Resorts and Cruise Lines 2.33% 2.46% 3.88%

 

Losers Ticker Sector Industry 1 Day Return 5 Day Return  YTD
McCormick & Company, Incorporated MKC Consumer Staples Packaged Foods and Meats -1.59% -1.36% 1.23%
PPL Corporation PPL Utilities Electric Utilities -1.48% -1.86% -1.96%
Waste Management, Inc. WM Industrials Environmental and Facilities Services -1.24% -2.03% 1.62%
Republic Services, Inc. RSG Industrials Environmental and Facilities Services -1.11% -2.18% 0.13%
The Western Union Company WU Information Technology Data Processing and Outsourced Services -1.18% -0.98% -0.84%

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
Airborne Wireless Network ABWN Telecommunication Services Alternative Carriers -20.00% -33.33% -83.33%
Applied Optoelectronics, Inc. AAOI Information Technology Communications Equipment -8.76% -9.44% -3.99%
Overstock.com, Inc. OSTK Consumer Discretionary Internet and Direct Marketing Retail -7.32% 2.70% 18.57%
Camping World Holdings, Inc. CWH Consumer Discretionary Automotive Retail -3.00% -6.64% -1.48%
Editas Medicine, Inc. EDIT Healthcare Biotechnology -2.96% -6.65% -1.26%

 

Losers Ticker Sector Industry 1 Day Return 5 Day Return  YTD
GreenSky, Inc. GSKY Information Technology Data Processing and Outsourced Services 5.44% 3.09% 0.00%
AnaptysBio, Inc. ANAB Healthcare Biotechnology 4.36% 6.40% -24.45%
Geron Corporation GERN Healthcare Biotechnology 4.36% -0.83% 99.44%
United States Steel Corporation X Materials Steel 3.74% 4.31% 7.33%
Alnylam Pharmaceuticals, Inc. ALNY Healthcare Biotechnology 3.03% -1.95% -17.06%

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 Travelers Companies, Inc. TRV 7/19/2018 Earnings Release Date US Large-Cap: C
Fifth Third Bancorp FITB 7/19/2018 Earnings Release Date US Large-Cap: C
Dover Corporation DOV 7/19/2018 Earnings Release Date US Large-Cap: C, US Industrials: C
Webster Financial Corporation WBS 7/19/2018 Earnings Release Date US Large-Cap: C
The Bank of New York Mellon Corporation BK 7/19/2018 Earnings Release Date US Large-Cap: C
Danaher Corporation DHR 7/19/2018 Earnings Release Date US Large-Cap: A
BB&T Corporation BBT 7/19/2018 Earnings Release Date US Large-Cap: A
Signature Bank SBNY 7/19/2018 Earnings Release Date US Large-Cap: C
East West Bancorp, Inc. EWBC 7/19/2018 Earnings Release Date US Large-Cap: C
KeyCorp KEY 7/19/2018 Earnings Release Date US Large-Cap: B
The Blackstone Group L.P. BX 7/19/2018 Earnings Release Date US Large-Cap: D
Snap-on Incorporated SNA 7/19/2018 Earnings Release Date US Large-Cap: B, US Industrials: B
RPM International Inc. RPM 7/19/2018 Earnings Release Date US Large-Cap: A
Domino's Pizza, Inc. DPZ 7/19/2018 Earnings Release Date US Large-Cap: C, US Consumer Discretionary: A
Pool Corporation POOL 7/19/2018 Earnings Release Date US Large-Cap: A, US Consumer Discretionary: B
Genuine Parts Company GPC 7/19/2018 Earnings Release Date US Large-Cap: B, US Consumer Discretionary: B
Nucor Corporation NUE 7/19/2018 Earnings Release Date US Large-Cap: C
PPG Industries, Inc. PPG 7/19/2018 Earnings Release Date US Large-Cap: C
People's United Financial, Inc. PBCT 7/19/2018 Earnings Release Date US Large-Cap: B
Capital One Financial Corporation COF 7/19/2018 Earnings Release Date US Large-Cap: C
Skechers U.S.A., Inc. SKX 7/19/2018 Earnings Release Date US Large-Cap: D, US Consumer Discretionary: F
Cintas Corporation CTAS 7/19/2018 Earnings Release Date US Large-Cap: A, US Industrials: B
Celanese Corporation CE 7/19/2018 Earnings Release Date US Large-Cap: B
Skyworks Solutions, Inc. SWKS 7/19/2018 Earnings Release Date US Large-Cap: C, US Information Technology: B
Associated Banc-Corp ASB 7/19/2018 Earnings Release Date US Large-Cap: C
E*TRADE Financial Corporation ETFC 7/19/2018 Earnings Release Date US Large-Cap: B
Western Alliance Bancorporation WAL 7/19/2018 Earnings Release Date US Large-Cap: B
SEI Investments Co. SEIC 7/19/2018 Earnings Release Date US Large-Cap: B
Microsoft Corporation MSFT 7/19/2018 Earnings Release Date US Large-Cap: A, US Information Technology: B
Equifax Inc. EFX 7/19/2018 Estimated Earnings Release Date US Large-Cap: C, US Industrials: C
NVR, Inc. NVR 7/19/2018 Estimated Earnings Release Date US Large-Cap: B, US Consumer Discretionary: C
TCF Financial Corporation TCF 7/27/2018 Earnings Release Date US Large-Cap: C
Marriott Vacations Worldwide Corporation VAC 7/19/2018 Estimated Earnings Release Date US Large-Cap: A, US Consumer Discretionary: B
LaSalle Hotel Properties LHO 7/19/2018 Estimated Earnings Release Date US Large-Cap: F
State Street Corporation STT 7/20/2018 Earnings Release Date US Large-Cap: C
Baker Hughes, a GE company BHGE 7/20/2018 Earnings Release Date US Large-Cap: D
Schlumberger Limited SLB 7/20/2018 Earnings Release Date US Large-Cap: C
Citizens Financial Group, Inc. CFG 7/20/2018 Earnings Release Date US Large-Cap: B
General Electric Company GE 7/20/2018 Earnings Release Date US Large-Cap: D, US Industrials: C
SunTrust Banks, Inc. STI 7/20/2018 Earnings Release Date US Large-Cap: B
Stanley Black & Decker, Inc. SWK 7/20/2018 Earnings Release Date US Large-Cap: C, US Industrials: C
ManpowerGroup Inc. MAN 7/20/2018 Earnings Release Date US Large-Cap: B, US Industrials: A
V.F. Corporation VFC 7/20/2018 Earnings Release Date US Large-Cap: D, US Consumer Discretionary: C
Kansas City Southern KSU 7/20/2018 Earnings Release Date US Large-Cap: B, US Industrials: C
IBERIABANK Corporation IBKC 7/20/2018 Earnings Release Date US Large-Cap: C
Honeywell International Inc. HON 7/20/2018 Earnings Release Date US Large-Cap: B, US Industrials: C
Cleveland-Cliffs Inc. CLF 7/20/2018 Earnings Release Date US Large-Cap: D
Gentex Corporation GNTX 7/20/2018 Earnings Release Date US Large-Cap: B, US Consumer Discretionary: A
Regions Financial Corporation RF 7/20/2018 Earnings Release Date US Large-Cap: B

Source: S&P Capital IQ