US Stocks

• Global stocks are dropping this AM following comments by US President Trump during an interview with CNBC that he is willing to implement tariffs on USD$500bn in goods imported from China
• US stocks index futures are pointing to a negative open in NY with the Dow Jones minis -0.35%, S&P500 minis -0.13% and Nasdaq 100 minis +0.28%
• The VIX is backing up this morning, currently 13.32 after closing at 12.87 yesterday
• SPY July 20 OTM Calls & Puts and Gerdau ADR (GGB) July 20 & September 2018 OTM Calls & Puts are the most heavily traded options contracts in the US pre-market
• The yield on the US 10-year government bond is +1 basis points to 2.849%
• The USD$ Index (DXY) is little changed, down 0.06%, with the only notable mover the  GBP£ (+0.18% to 1.3040)
• Global oil prices are little changed following comments by Saudi Arabian officials that they will not flood the global market with crude oil
• Precious metals appear to be disconnected with the risk-off mood in global stocks with Gold only +0.07% to USD$1,223.91/Oz

International Stocks

• European stocks are declining on US President Trump's comments with auto stocks leading the drop in Euro Stoxx 600 -0.20%, FTSE 100 -0.23%, DAX -0.54%, and CAC 40 -0.48%
• VSTOXX, the European stocks equivalent of the VIX, is currently 13.6699 after reaching as low as 11.6436 earlier this week
• Asian stocks finished their trading sessions mixed with Nikkei 225 -0.29%, CSI 300 +1.88%, HSI +0.76% and Hang Seng China Enterprise +1.51%
• CNY is down 0.24% to 6.7915 against the USD$ following the decision by the People’s Bank of China (PBOC) to further weaken its daily fixing rate today
• Italian 10-year yields are up 6.5 basis points to 2.563% following news that Five Star Movement leader Luigi de Maio is clashing with Finance Minister Giovanni Tria
• Australia 10-year yields are -4.1 basis points to 2.631% following a better than expected result for June jobs data
• Canada 10-year yields are -3.9 basis points to 2.105% as investors expect the Bank of Canada to continue to pursue hawkish monetary policy

Cryptos

• Major cryptocurrencies were falling today except for Bitcoin +0.95% to $7,470.59. Notable decliners are Ethereum -3.35%, to $464.27, XRP -5.34%, to $0.6913, and Bitcoin Cash -3.92% to $797.71
• Cornell University researchers Philip Daian, Tyler Kell, Ian Miers and Ari Juels, find that there is the potential for Dark Autonomous Organizations (DAOs) to manipulate governance systems, issue false signals or engage in market manipulation on smart contract blockchains that use voting systems
• A Special report published in the Los Angeles Times on July 17, 2018 has left miners who increased investment in mining equipment during the run-up in cryptocurrencies at the end of CY2017 are now looking to repurpose their computer equipment.  The report suggests many of the larger miners are exploring opportunities to provide large-scale cloud computing services, etc.
• Japan’s Nippon Telegraph and Telephone (NTT), the fourth largest telecom company in the world, has filed a patent for using blockchain tech for contract agreement.  The patent claims to have a simple way to solve the problem that the evidence of a smart contract agreement held by the receiver is only the electronic signature of the sender.
• Mike Novogratz believes mass adoption of cryptocurrencies and Blockchain by Wall Street is still 5 to 6 years away.  The biggest hurdle, in his opinion, is cost of technical talent as well as doubt by “conventional investors”

*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

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Electro Scientific Industries, Inc. - 34.96% off its 52wkH on 11/27/2017, reports earnings on 08/01/2018

KLA-Tencor Corporation - 12.48% off its 52wkH on 03/13/2018, reports earnings on 07/30/2018

Lam Research Corporation - 24.12% off its 52wkH on 03/13/2018, reports earnings on 07/26/2018

MCBC Holdings, Inc. - 14.94% off its 52wkH on 05/18/2018, reports earnings on 09/07/2018

Micron Technology, Inc. - 13.05% off its 52wkH on 05/30/2018, reports earnings on 09/28/2018

MKS Instruments, Inc. - 20.72% off its 52wkH on 03/12/2018, reports earnings on 07/24/2018

Stocks Trending in the News

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Faurecia (ENXTPA:EO) shares are down 5.09% after a sell-off in European auto stocks was compounded by the company providing a FY2018 operating margin forecast that was slightly lower than expected (7.2% vs 7.3%)

General Electric (GE) beat expectations on strong demand from its health-care equipment and aviation divisions.  Adjusted profit for 2Q came in at $0.19 per share vs $0.18 expected. The company-maintained guidance for 2018 profit of $1.00-1.07 per share

Hermes International (ENXTPA:RMS) shares are trading 0.44% higher to €544.40 in today’s trading, after reporting 2Q2018 revenue that was higher than forecasted (€1.46 billion vs €1.44 billion) and a 1H2018 operating margins that will be “close to record level of 1H2017)

Honeywell International (HON) is up 0.98% to a ~$149 handle before the open, after the company posted 2Q2018 earnings results that beat the consensus ($2.12 vs $2.01)

Microsoft (MSFT) reported 2Q2018 revenue of US$30.09b, handily beating expectations of US$29.22b. Cloud sales presented a better scenario than expected, with both a sales beat for the quarter and projections of sales for 3Q2018.  Azure, Microsoft’s cloud offering, saw 89% sales growth in 2Q2018

Schlumberger (SLB) is down 0.84% to $66.36 before today’s trading, after the company announced better than expected 2Q2018 EPS ($0.43 vs $0.42) but revenue that was lower than anticipated (USD$8.3 billion vs USD$8.36 billion)

Stanley Black & Decker (SWK) reported 2Q2018 EPS that was higher than expected ($2.57 vs $2.02). Shares of Stanley Black & Decker are up 3.14% to $105.70 pre-market

State Street Corp (STT) released 2Q2018 EPS that was below the consensus ($1.88 vs $2.01). State Street Corp shares are down 2.95% to $90.00 before the open

SunTrust Banks Inc (STI) posted 2Q2018 EPS that was higher than projected ($1.49 vs $1.31). SunTrust Banks’ stock is 3.88% higher today to $71.70

Taiwan Semiconductor (TSEC:2330) cut its 2018 revenue and capital spending forecasts for 2018.  Sales will only grow high single digits while capital spending was cut by up to 20%.  

Cryptocurrencies Today

*Source: Stockdio

Stock Movers

Conviction Buy Winners and Losers

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Source: S&P Capital IQ

Conviction Short Winners and Losers

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Events Calendar

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